New York’s Offshore Wind Experiment – 6/23/16

New York State is stepping up efforts to reduce the cost of offshore wind farms by developing a 127-square-mile site in the Atlantic Ocean and guaranteeing a buyer for electricity generated.

As of the first quarter of 2015, the U.S. had less than a 1 MW of offshore wind capacity compared to 5000 MW for the United Kingdom. The vast difference in capacity has a straightforward answer: the U.S. has a lot more substitute sources of clean energy. Difficulty acquiring cheap, viable land made offshore wind power popular in the U.K., but most states in the U.S. are not so densely packed that they cannot use land-based turbines or solar panels. As a result, offshore wind proponents are focusing on the crowded Eastern seaboard where conditions are most favorable.

New York State’s Energy Research and Development Authority is bidding on the site because New York officials are aiming to have the state draw 50% of its power from renewable sources by 2030.

“This is a resource that has to be, and will be, developed,” John B. Rhodes, president and chief executive of the New York State authority, said in an interview Friday. “It is our job to do it as surefootedly and cost efficiently as possible.”

If New York officials are able to line up a buyer in advance, developers would be would not have the risk of utilities refusing their output. And if the project succeeds it would set a good precedent for future projects driving down the costs of everything from financing to legal risks.

The U.S. Bureau of Ocean Energy Management plans to auction off the site by the end of the year. The area is large enough to accommodate 900 MW worth of turbines and is located 11 miles off the coast of Long Island.

The first wind farm in U.S. waters, a 30 MW project off the coast of Rhode Island, is scheduled to come online by the end of the year.

Projected_LCOE_in_the_U.S._by_2020_(as_of_2015)

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