The New York Power Authority board of trustees on Tuesday voted to end the competitive solicitation process for the proposed Great Lakes Offshore Wind Project (GLOW), without awarding a contract for project development.
The estimated annual cost of GLOW and the current economic conditions were the reasons for the trustees' action. Evaluating the proposed project's economics, they determined that it would not be fiscally prudent for NYPA to commit to the initiative. Development of a 150-megawatt GLOW project would have resulted in an estimated annual subsidy of between $60 million and $100 million, resulting in a significant cost premium to NYPA.
"While deciding not to proceed with GLOW, the Power Authority will continue its commitment to developing and implementing wind and other clean alternative energy sources to produce emissions-free power for the benefit of New Yorkers today and for future generations," said Gil C. Quiniones, NYPA acting president and CEO. "The Power Authority's participation in the evaluation of the LI-NYC Offshore Wind Project and in the regional efforts of such organizations as the Great Lakes Commission and the Great Lakes Wind Collaborative shows NYPA's dedication to affordable and environmentally sound development of future offshore wind projects in New York state waters."
NYPA received five responses to the GLOW RFP from Apex Offshore Wind LLC; Great Winds LLC; NRG Bluewater Wind Great Lakes LLC; Pattern Renewables Development Company LLC; and RES Americas Developments Inc. A thorough multi-disciplinary review of the proposals was conducted, which evaluated a wide range of criteria, including expected costs, potential economic development benefits, community response and environmental impacts. While the evaluation indicated the project was technically feasible, the generating output of the proposed 120-MW to 500-MW project would have cost two to four times more than land-based wind, NYPA said.
NYPA, with its collaborative partner, Con Edison of New York and the Long Island Power Authority, is pursuing the evaluation of the LI-NYC Offshore Wind Project in the Atlantic Ocean off the southern coast of Long Island. Recently, the LI-NYC Offshore Wind Collaborative - comprised of the three utilities - took another step to advance this project by submitting a lease application to the federal government for undersea land identified as a possible location for this project. While the economics of the project continue to be studied, the difference between GLOW and the LI-NYC project are primarily the participation of multiple utilities involved in the evaluation and that the LI-NYC project is located adjacent to a dense population area in a high-priced energy market, NYPA said.
New York, under the direction of Gov. Andrew Cuomo, is also making continued strides to bring about the development of clean alternative energy sources through a renewable portfolio standard, to increase the proportion of renewable generation in the state to 30 percent of projected electricity consumption by 2015, NYPA said. Under the RPS to date, the New York State Energy Research and Development Authority has committed $872 million in support of the development of approximately 1,870 MW of new, large-scale, grid-connected renewable capacity. An additional $1.85 billion in funding will be awarded through 2015 for additional projects.
The NYPA trustees emphasized their continuing commitment to clean energy sources through the financing of energy-efficiency projects for public facilities across the state to reduce energy use and greenhouse gases for a cleaner environment. In 2010, NYPA financed more than $175 million in such projects, and plans to invest another billion dollars over the next few years in support of the state's 30 percent RPS goal and energy efficiency efforts.
Since the inception of its energy-services programs in the late 1980s, NYPA has financed approximately $1.44 billion in more than 1,800 energy-efficiency projects at almost 4,000 public facilities, saving state taxpayers more than $133 million annually in municipal energy costs, NYPA said. The improvements have also reduced carbon emissions by more than 817,000 tons each year.