New York Gov. Kathy Hochul awarded power contracts Tuesday to renewable power projects capable of supplying 12 percent of the state’s electricity needs, calling it “the largest investment in clean energy in U.S. history.”
The announcement had emerged as a test of the Democratic governor’s climate commitment. Hochul had faced questions in recent weeks after she vetoed a bill expediting permits for an offshore wind project’s transmission line and state utility regulators rejected a petition from renewable developers to amend existing power contracts to account for inflation.
But in a speech to labor leaders, state lawmakers and environmentalists, Hochul said the state was doubling down on renewables to power its climate ambitions.
“Our green energy future is now the green energy present. We’re not waiting any longer,” Hochul said at a union’s training center in New York City. “This is an historic investment to demonstrate our full commitment to renewables and this particular energy.”
The awards come at a critical time for renewable developers that are struggling with rising construction and financing costs from the fallout of the Covid-19 pandemic and Russia’s invasion of Ukraine.
Three offshore wind projects with a combined 4 gigawatts of capacity won contracts with New York. They are Attentive Energy One, a 1.4-GW project planned by TotalEnergies, Rise Light and Power, and Corio Generation; Community Wind One, a 1.3-GW project planned by RWE Offshore Renewables and National Grid Ventures; and Excelsior Wind, a 1.3-GW project planned by Copenhagen Infrastructure Partners.
The state also awarded contracts Tuesday to 14 solar projects, one new wind project, a small-scale hydroelectric project and upgrades for six existing onshore wind farms. All told, the onshore and offshore renewable projects will supply the state with 6.4 GW of renewable power, enough to power 2.6 million homes.
“The Biden-Harris Administration applauds New York’s landmark announcement that will provide clean, reliable energy to American families, create good-paying jobs in clean energy, and tackle the climate crisis,” John Podesta, a climate adviser to President Joe Biden, said in a statement. “Thanks to Governor Hochul’s leadership, New York is showing that clean energy — including offshore wind — has a bright future here in America.”
Whether the new projects will be enough to meet New York’s clean energy targets depends in large parton whether renewable developers with preexisting power deals cancel projects currently in development. That is an open question in the wake of the New York Public Service Commission’s decision to reject renewable developers’ request to amend existing power contracts to account for inflation.
Those contracts cover enough renewable power to meet almost a quarter of the state’s electricity needs. Many are watching developers Ørsted A/S, Equinor ASA and BP PLC to see if they terminate existing power contracts for four offshore wind projects planned off Long Island. Those projects would generate 4.2 GW of power, roughly equal to what the projects awarded contracts Tuesday would provide.
New York law requires that renewables account for 70 percent of electricity supply in 2030, up from 27 percent today. Analysts say meeting that target is critical for New York’s wider climate goals, which seek to cut greenhouse gas emissions 40 percent of 1990 levels by the end of the decade.
“I’m not afraid of those numbers,” Hochul said. “People say, ‘Oh, are you gonna make it?’ Don’t worry. I have the team. We have the commitment. We have the workers, we have the opportunities, and we have the will. That’s what we have to have, a will to just charge right through these obstacles.”
State officials estimate the contracts awarded to offshore wind projects Tuesday have an average lifetime cost of $96.72 per megawatt-hour. That is about 20 percent more than contracts awarded in 2021, POLITICO reported. The contracts awarded on Tuesday included an inflation-adjusted risk option. State officials could not immediately be reached for comment on how that would work. But in a release, the state estimated the three offshore wind projects awarded Tuesday would add an average of $2.93 to consumers’ monthly electric bill.
“This cohort of large-scale renewable energy projects reflect New York’s longstanding and ongoing priority to responsibly advance the most cost-competitive and economically viable clean energy projects in a manner that is timely and maximizes benefits for all New Yorkers,” New York State Energy Research and Development Authority CEO Doreen Harris said in a statement.
Hochul also said the state would invest $300 million in factories supplying the offshore wind industry, in a bid to create jobs and break a supply chain bottleneck that has hampered offshore wind development.
A GE Vernova nacelle manufacturing and assembly factory will receive funding, as will a blade factory developed by LM Wind Power Blades USA. The exact award to each facility was not specified.
“Increased financial backing for local manufacturing is huge,” said Samantha Woodworth, an analyst who tracks the industry at Wood Mackenzie. “I hope that other states, especially ones looking to develop offshore wind, will take note of the magnitude necessary.”