Dive Brief:

The New York State Energy Research and Development Authority (NYSERDA) filed a petition Jan. 28 with state regulators to initiate a regulatory proceeding for the authorization of a second largescale wind solicitation for at least 1 GW of offshore wind.

NYSERDA plans to issue the solicitation in the middle of this year for as much as 2.5 GW of offshore wind, which, combined with earlier solicitations from three separate projects would lead to more than 4.3 GW of procured offshore wind by the end of 2020. Democratic Gov. Andrew Cuomo set a procurement goal for 9 GW of the resource by 2035.

New York finalized its first largescale offshore wind solicitation in 2019, signing contracts with Empire Wind and Sunrise Wind for an approximate total of 1.7 GW. According to an October NYSERDA analysis, prices for the solicitation were about 40% lower than 2018 projections, "signaling that offshore wind is an increasingly competitively priced renewable energy resource."

Dive Insight:

The state, which has the most ambitious offshore wind goal in the U.S., is expecting more leases in federal waters from the Bureau of Ocean Energy Management (BOEM), as NYSERDA indicated in its petition.

However, the existing federal leases will suffice, even for the more ambitious solicitation goals, according to industry experts.

"There is no question that the existing wind lease areas offshore New York, New Jersey, and Massachusetts have the capacity to serve an additional 2,500 megawatts to New York State if NYSERDA decides to go big on its Phase 2 offshore wind solicitation," Brandon Burke, policy and outreach director at the Business Network for Offshore Wind, wrote via email.

While no competitively bid projects exist of that scale, Virginia has a utility-owned project underway planned for 2.6 GW.

"Looking to 2035, though, additional offshore leases will be needed for New York and New Jersey to achieve their offshore wind targets, which now total 16,500 megawatts," Burke said.

New York regulators "would have additional motivation to authorize a larger procurement if there are lease areas that can fill it," Mila Buckner, associate at Hodgson Russ, told Utility Dive.

If NYSERDA issues a solicitation between 1 GW and 2.5 GW of offshore wind, an additional generic environmental impact study (EIS) will be required for 0.3 GW to as much as 1.8 GW, according to the New York State Department of Public Service. Combined with the existing offshore wind contracted, the state would exceed the 2.4 GW of development allowed by 2030, per an EIS issued in 2018, requiring further study.

"The program design is solid in terms of the order that was issued by the Public Service Commission authorizing the first tranche of procurement," Noah Shaw, partner at Hodgson Russ and co-chair of the renewable energy practice, told Utility Dive.

It's "essentially the same [solicitation] design, but with ... a few modifications to make the next solicitation more efficient," Shaw, NYSERDA's former general counsel who led the Phase I offshore wind solicitation in 2018, said.

According to him, state regulators should file a notice that will set off a 60-day comment period on the proceeding.

Outside of the petition, the PSC also requires more clarity on transmission upgrades — the Phase I order said a study of a transmission system to support offshore wind would be critical in the Phase II procurement efforts.

Separately, the Long Island Power Authority and Consolidated Edison are working on an ongoing study of transmission capacity, which the Hodgson Russ firm estimates will be finalized during the Phase II proceeding.

The Phase II solicitation is not dependant on the utilities' transmission capacity study, according to a NYSERDA spokesperson.

"The proceeding doesn't need to be expedited in order to make sure that the solicitation can take place in 2020," probably in the fall, according to Shaw.

The state has the 13th largest economy in the world and is vying to become "the epicenter" of offshore wind in the U.S., NYSERDA president and CEO Alicia Barton said in October.

New York is "just a much bigger player and a much bigger market than any of the other states that are in play ... that's what's going to pull a lot of the largest developers to locate their centers of operation here in New York," Shaw said.

NYSERDA plans to start a competitive process in 2020 to award $200 million in public investments into offshore wind port infrastructure. The investment, made jointly with the state's Department of Transportation and Empire State Development, seeks to upgrade existing port infrastructure to prepare domestic manufacturing and construction capabilities for the heavy parts of the offshore structures.