Nation-leading offshore wind solicitation seeks up to 2,500 megawatts of renewable energy and a complementary multiport infrastructure investment, totaling more than $400 million in public & private dollars for port infrastructure in New York since last year; sends a ‘buy-clean’ demand signal for advanced materials
Gov. Andrew Cuomo on Tuesday announced the largest combined clean energy solicitations ever issued in the U.S., seeking up to 4,000 megawatts of renewable capacity to combat climate change. New York's second offshore wind solicitation seeks up to 2,500 megawatts of projects, the largest in the nation's history, in addition to last year's solicitation, which resulted in nearly 1,700 megawatts awarded.
The solicitation includes a multiport strategy and requirement for offshore wind generators to partner with any of the 11 prequalified New York ports to stage, construct, manufacture key components, or coordinate operations and maintenance activities. This solicitation has the potential to bring New York halfway toward its goal of 9,000 megawatts of offshore wind by 2035 and meet Cuomo's nation-leading climate and environment goals under the Climate Leadership and Community Protection Act.
Funding for port investments will include $400 million in both public and private funding.
"During one of the most challenging years New York has ever faced, we remain laser-focused on implementing our nation-leading climate plan and growing our clean energy economy, not only to bring significant economic benefits and jobs to the state, but to quickly attack climate change at its source by reducing our emissions," Cuomo said. "With these record-breaking solicitations for renewable energy and new port infrastructure, New York continues to lead the way with the most ambitious ‘Green New Deal’ in the nation, creating a future fueled by clean, renewable energy sources."
In addition to the offshore wind solicitation, the governor also announced the issuance by NYSERDA and NYPA of the nation's largest coordinated solicitations for land based large-scale renewable energy projects by a U.S. state, under the “Clean Energy Standard.” Together, the combined solicitations from NYSERDA and NYPA seek to procure over 1,500 megawatts of clean, renewable energy – enough to power nearly 500,000 homes. Applicable land-based projects selected will be fast-tracked to construction under groundbreaking legislation passed in the budget to vastly accelerate renewable energy siting to ensure the projects are developed responsibly and quickly so the state meets its CLCPA mandate.
Amid the ongoing COVID-19 pandemic, the solicitations, combined with a competitive multiport funding opportunity, are expected to spur approximately $7 billion in direct investments and to create approximately 4,500 good-paying short and long-term jobs at applicable prevailing wages, helping to jumpstart and drive economic growth as part of reopening and reimagining New York's economy. The solicitations prioritize hiring in environmental justice areas and benefits to disadvantaged communities in line with the state's new climate law. The solicitations also send a clear “buy-clean” demand signal to the market to spur the use of advanced materials, like carbon-negative cement, and other strategies to reduce the carbon footprint of future large-scale renewable projects. This announcement, coupled with critical siting reforms in the enacted budget, demonstrates a comprehensive acceleration of action toward achieving New York's mandate to secure 70% of the state's electricity from renewable energy by 2030.
In aggregate, the offshore wind, port infrastructure, and land-based renewable trifecta of solicitations seek to procure approximately 12 million megawatt-hours, enough to power over 1.5 million homes annually. Together, taking into account the value of avoided carbon emissions, these solicitations are expected to deliver a combined $3 billion in net benefits over the 20- to 25-year life of the projects.
A press release said, “The clean energy industry has proven to be a strong economic driver, outpacing growth in the national workforce by nearly twice the rate pre-COVID, and will have a pivotal role in creating short- and long-term economic activity to help local economies rebound from the pandemic after reopening. The combined offshore wind and port solicitation marks an important next step in New York's offshore wind program to build on the state's first two offshore wind projects – Empire Wind and Sunrise Wind – which represent the single largest renewable energy procurement in U.S. history, at nearly 1,700 megawatts, and will create enough energy to power over 1 million homes. Notably, the solicitation will accept bids that combine offshore wind generation projects with investments in New York ports to holistically support the state's burgeoning offshore wind industry through an innovative public/private partnership.”
The state's issuance of coordinated, land-based renewable energy solicitations as part of a series of procurements under the state's “Clean Energy Standard” is expected to result in the development of dozens of new large-scale renewable projects over the next decade. New York has awarded 67 large-scale renewable energy projects since 2018 – the most significant state commitment to renewables in the nation. These previously announced land-based renewable awards combined with New York's record-breaking commitment to offshore wind announced last year, will be capable of generating over 11% of the state's expected electricity demand in 2030.
NYSERDA Acting President and CEO Doreen M. Harris said, "While Gov. Cuomo and the state work diligently to safely reopen New York's economy, clean energy represents an optimal tool to jumpstart these activities. Our second offshore wind solicitation, combined with this historic investment in the state's port infrastructure, will ensure that New York continues to be a leader in our nation-leading pursuit of offshore wind. New York's ports will serve a critically important role in supporting the long-term development of offshore wind projects not only in New York but along the entire East Coast while supporting new jobs and investment in the state during the state's recovery from COVID-19. Today's milestone also builds on the nation-leading pipeline of large-scale renewable projects awarded over the past three years and will stimulate much-needed economic development for upstate New York communities, prioritizing environmental justice concerns, and moving us closer to achieving Gov. Cuomo's nation-leading climate and clean energy goals."
NYPA President and CEO Gil C. Quiniones said, "New York is leading the transformation to a clean energy economy by accelerating the development of more large-scale solar and wind projects in every corner of the state. These investments put us at the forefront of the transformation to clean energy and, like New York always does, we are leading the charge. To achieve our national-leading goal of 100% carbon-free electricity by 2040 and to make lasting impacts against the ravages of climate change, we must act now. NYPA's solicitation calls for utility-scale renewable projects that will produce an annual output of up to 2 million MWh or more. As these major solar and wind projects – some with an option for storage – come online, we will reduce emissions, harness our abundance of natural resources, and boost economic development in all regions of our state setting the example for others."
New York State Department of Environmental Conservation Commissioner Basil Seggos said, "New York is setting the bar for state-led action on climate. To achieve the state's nation-leading goals of reducing greenhouse gas emissions and responsibly ramping up clean energy sources, New York must tap into our state's wind energy potential. Today's announcement is further proof that, through Gov. Cuomo's leadership on climate and our ongoing clean energy initiatives, New York is leading the nation's efforts to act on climate while protecting our communities and our irreplaceable natural resources."
Offshore Wind and Port Infrastructure
In seeking at least 1,000 megawatts of offshore wind, coordinated with a $200 million opportunity to support local and private investment in port infrastructure, NYSERDA will accept offshore wind bids between 400 megawatts and up to 2,500 megawatts. In addition to delivering a significant amount of clean, renewable energy to New Yorkers, this combined solicitation requests proposals for investment in port infrastructure, aimed to further incentivize private investment, and maximize economic benefits and job creation for New Yorkers while driving future cost reductions for this technology and establishing New York as the hub of the offshore wind supply chain. Notable provisions in this comprehensive solicitation include:
√ Provisions requiring payment of the prevailing wage, a standard set by the New York State Department of Labor, and good-faith negotiations toward the use of project labor agreements for workers associated with the construction of any awarded facility, and continuing to prioritize opportunities for New York state minority- and woman-owned business enterprises and service-disabled veteran-owned businesses to support these projects;
√ Incentivizing associated jobs, project spending, and infrastructure investments in New York by requiring awardees to provide an economic benefits plan for evaluation, backed by independent audit and verification of the realization of these claims;
√ Prioritizing low-income census tracts and environmental justice areas to contribute to delivering the overall job creation and benefits to disadvantaged communities, consistent with the state's Climate Leadership and Community Protection Act;
√ Sending a clear buy-clean demand signal to the market to encourage the consideration of the project's carbon footprint in design, sourcing and construction and spur use of advanced materials; and
√ Actively addressing the interests of ocean users such as commercial and recreational fishing and environmental stakeholders as reflected in mitigation plans that are informed by New York's Offshore Wind Technical Working Groups as established by New York's Offshore Wind Master Plan.
To support New York's position as the hub for the offshore wind industry, NYSERDA, with the assistance of NY Green Bank, Empire State Development and the New York State Department of Transportation, will all support this combined solicitation for investing in and upgrading the state's port infrastructure. The $400 million in private and public funding is comprised of:
√ $100 million in Empire State Development grant funding;
√ $100 million in low-interest financing; and
√ $200 million in private-sector matching funds, for a 1:1 public/private match.
The RFP prioritizes funding for projects that will be operational quickly to help restart New York's economy and that will drive additional private investments in the industry and directly support offshore wind projects. The state launched the first phase of this process in October 2019, when it issued a request for qualifications that pre-qualified 11 proposers to participate in this competitive process, with the resulting proposals representing an unprecedented suite of projects, a strong indicator of market interest and opportunity.
The 11 prequalified sites are located from Long Island to the Capital Region. These sites, now eligible to partner with offshore wind developers for up to $200 million in public funding for direct use in advancing an offshore wind project and the long-term industry, have the potential to support various supply chain end uses such as staging, installation, manufacturing and operations and maintenance.
Empire State Development Acting Commissioner, President and CEO-Designate Eric Gertler said, "Investing in green initiatives is a smart strategy as we focus on reenergizing the New York state economy and building back better than before. Offshore wind technology ensures the Empire State is well-positioned for the future by diversifying our energy supply, promoting a cleaner natural environment and supporting long-term job creation and economic development."
New York State Department of Transportation Commissioner Marie Therese Dominguez said, "Under Gov. Cuomo's leadership New York continues to make unprecedented investments to ensure our vital transportation infrastructure supports the state's nation-leading renewable clean energy and climate goals. This record-level investment for port development in support of offshore wind power generation will accelerate the creation of well-paying green jobs and enhance the economic competitiveness of New York."
Under this competitive solicitation, New York is offering funding support for specific types of capital infrastructure assets such as strengthened sub-surfaces or new shoreline protection structures, optimized to suit the development of port infrastructure for the offshore wind industry. The solicitation will seek a 1:1 match in private funding to build on the state's commitment.
Funding will be offered in two categories:
√ Grant funding: Up to $100 million in grants will be issued on a reimbursement basis as critical project milestones are met.
√ Debt financing: Up to $100 million of senior-secured debt financing will be issued as critical project milestones are met.
Bids for this combined offshore wind and ports solicitation are due Oct. 20, and awards and contracts are expected to be executed Q4 of 2020, respectively.
NYSERDA Large-Scale Renewables Solicitation
NYSERDA's solicitation calls for the development of tier 1 eligible renewable energy projects that will generate 1.6 million megawatt hours or more annually. Eligible projects include any project that can be certified as a tier 1 renewable technology and entered operation after Jan. 1, 2015, and that enters commercial operation by Nov. 30, 2022, with the option for extensions to Nov. 30, 2025. The land-based projects selected will be the fastest to construction under groundbreaking legislation aimed at vastly accelerating renewable energy siting that was passed in this year's budget. NYSERDA expects to notify the awarded developers in early 2021.
For the first time, NYSERDA will allow proposers to utilize the innovative Index REC contract structure to provide clean energy developers with more flexibility to adapt to their financing and operational needs, while ensuring New Yorkers benefit both from reduced project development costs and more predictable energy bills.
As with offshore wind, the solicitation sends a clear buy-clean demand signal to the market to encourage the consideration of the project's carbon footprint in design, sourcing and construction, and prioritizes economic benefits directed to low-income census tracks and potential environmental justice areas to contribute to delivering the overall job creation and benefits to disadvantaged communities, consistent with the state's Climate Leadership and Community Protection Act.
The press release noted, “Community engagement and on-the-ground support is crucial for the successful development of renewable energy projects, and the solicitations released today include important standards and requirements for effective community outreach and planning.”
Notable provisions in these solicitations include but are not limited to:
√ Requiring workers associated with the construction of any awarded facility be paid the applicable prevailing wage, ensuring that the projects will result in quality, good-paying jobs for New Yorkers;
√ Preserving and protecting New York's valuable agricultural and environmental resources by requiring Proposers to submit robust permitting plans to address site-specific impacts and ensure that all state priorities are accounted for as part of the project planning and development process;
√ Encouraging near-term economic recovery activities in communities hosting projects by incentivizing developers to propose economic benefits that can begin immediately;
√ Ensuring communities that will host successfully awarded projects are fully involved in the development process, and that proposers demonstrate a commitment to frequent and active community engagement; and
√ Continuing to encourage proposals that cost-effectively pair renewable energy with advanced energy storage technologies to help meet Cuomo's commitment to deploy 3,000 megawatts of energy storage by 2030, up from 1,500 megawatts by 2025.
In addition to adhering to the Department of Agriculture and Markets' guidelines for solar energy projects and all applicable regulations as part of the state's new siting process, awarded projects that impact certain classes of prime agricultural soils may be responsible for making an agricultural mitigation payment to a designated fund, ensuring that New York can pursue its priority objectives to accelerate clean energy while protecting the state's valuable natural resources and working lands.
New York State Agriculture Commissioner Richard Ball said, "New York's farmers are the original environmentalists – they are dedicated to protecting our land and water and defending these natural resources across our state and the country. I am excited that the renewable energy solicitations announced today will include consideration of agricultural mitigation payments, helping New York state continue to lead the way in our clean energy economy, while also ensuring the preservation of prime soils and farmland so our farmers can continue their critical work of putting nutritious food on the table for our communities."
New York State Department of Labor Commissioner Roberta Reardon said, "Gov. Cuomo's progressive renewable energy policies and commitment to innovation have made the clean energy sector an engine for job and economic growth. Labor has played a vital role to ensure the jobs created through green infrastructure will pay a prevailing wage and create quality careers for their members and all New Yorkers."
NYPA Large-Scale Renewables Solicitation
NYPA's solicitation calls for the development of utility-scale renewable projects that will produce an annual output of up to 2 million MWh or more. Eligible technologies include solar photovoltaic and wind and may include an option to pair with energy storage.
Projects are required to interconnect into New York and have a generation capacity that falls within the category of 20-25 MW or 100 MW or greater. The 2 million MWh goal can be served by one or multiple projects. The contracts offered will be for a bundled product that will include energy, capacity and RECs. The selected projects are expected to come online between 2021 and 2024, and winning bidders will be announced by year-end 2020.
Each authority will evaluate the provisions by specific criteria outlined in the authority's respective RFP.
The announcement offers a predictable pace of solicitations for renewable energy developers and will support continued development and investment in clean energy projects across the state. NYPA and NYSERDA will coordinate regarding the timing of and award selections for their respective solicitations.
Proposers to the two large-scale solicitations will, for the first time, be able to seek permits from the new Office of Renewable Energy Siting as part of their efforts to bring projects to operation. Under the new law, all large-scale, renewable energy projects larger than 25 megawatts will be required to seek an approved permit through the Siting Office for new construction or expansion. New projects sized between 20 and 25 megawatts will also be able to opt in. Projects already in the initial phases of the current Article 10 siting process through the state's siting board may remain in Article 10 or opt-in to the new siting process.
Build-Ready Site Nomination RFI
NYSERDA on Tuesday also issued a request for information to engage with local communities across New York to consider potential sites for large-scale renewable energy project development, marking an important next step in advancing "Build-Ready" projects in implementing the Clean Energy Resources Development and Incentive Program under the state's new siting law.
Under this RFI, NYSERDA is proactively seeking nominations from elected officials, local community members, private companies, environmental justice communities, or other interested parties for potential sites for consideration as build-ready projects. NYSERDA will prioritize sites that are located on dormant electric-generating sites, former industrial sites, existing or abandoned commercial sites, brownfields and landfills, are 65 acres or larger, and have flat or gently sloped terrain. Proposed sites will be evaluated based on environmental site conditions, the ability to interconnect to the electrical grid, and whether the site is physically suited to host a large-scale renewable energy project. Nominations will be accepted by NYSERDA on a rolling basis from July 21 until July 20, 2021, and can be submitted here.
Nominated sites will be assessed and analyzed by NYSERDA for development potential. For selected sites, NYSERDA will advance the projects through permitting and design, ultimately auctioning off the de-risked build-ready sites bundled with renewable energy credit agreements to commercial developers to construct and operate a renewable energy project at the site.
Under the program, commercial developers that are awarded build-ready site bundles will be required to adhere to prevailing wage provisions consistent with the large-scale land-based solicitations. Additionally, NYSERDA will also prioritize community engagement and benefits, such as workforce development programs or utility bill discounts, to focus on the needs of environmental justice and disadvantaged communities.
An informational webinar will be hosted by NYSERDA from 3-4 p.m. Tuesday, Aug. 4, to discuss the build-ready program and this RFI. Interested stakeholders can sign for the webinar here.
Tuesday’s announcement builds upon the Accelerated Renewable Energy Growth and Community Benefit Act, passed as part of the final enacted state budget, which will significantly help to speed up the pace of renewable energy development across the state and accelerate the planning and buildout of bulk and local transmission and distribution infrastructure. This law creates a first-in-the-nation Office of Renewable Energy Siting to improve and streamline the process for environmentally responsible and cost-effective siting of offshore wind and large-scale renewable energy projects while delivering significant benefits to local communities. It also includes critical provisions that will help to pave the way for delivering clean electricity to New Yorkers upstate and downstate by prioritizing necessary upgrades to the power grid.
For each of the three solicitations launched this week, all proposers, as a part of the state's “New York Forward,” and pursuant to executive orders, will be required to follow during the “COVID-19 Public Health Emergency the Interim Guidance for Construction Activities” put out by the Department of Health, and also adhere to the information included in the FAQ on “New York Forward” and business reopening maintained by ESD.
New York State Sen. Todd Kaminsky, chairman of the environmental conservation committee, said, "Offshore wind is vital to growing a clean-energy economy, combating climate change and lifting our state out of the devastating economic impacts of COVID-19. Today's announcement is an exciting and necessary step toward reducing our state's dependence on fossil fuels and advancing the green energy goals set forth in my Climate Leadership and Community Protection Act. As we emerge from the economic downturn caused by the pandemic, I am thankful to Gov. Cuomo and Doreen Harris for ensuring that the rejuvenation of New York's economy begins with advancing renewable energy."
New York State's Nation-Leading Climate Plan
The press release noted, “Cuomo's nation-leading climate plan is the most aggressive climate and clean energy initiative in the nation, calling for an orderly and just transition to clean energy that creates jobs and continues fostering a green economy as ‘New York State Builds Back Better’ as it recovers from the COVID pandemic. Enshrined into law through the Climate Leadership and Community Protection Act, New York is on a path to reach its mandated goals of economywide carbon neutrality and achieving a zero-carbon emissions electricity sector by 2040, faster than any other state. It builds on New York's unprecedented ramp-up of clean energy including a $3.9 billion investment in 67 large-scale renewable projects across the state, the creation of more than 150,000 jobs in New York's clean energy sector, a commitment to develop over 1,800 megawatts of offshore wind by 2024, and 1,800% growth in the distributed solar sector since 2011.”
New York's Climate Action Council is working on a scoping plan to build on this progress and reduce greenhouse gas emissions by 85% from 1990 levels by 2050 while ensuring that at least 40% of the benefits of clean energy investments benefit disadvantaged communities, and advancing progress toward the state's 2025 energy efficiency target of reducing on-site energy consumption by 185 TBtus.