Offshore Wind Developments

Independent transmission set to take off in the US

The year 2020 may be a turning point for the US offshore wind transmission sector. Recent developments indicate that the sector is set to take off. As states such as New Jersey, New York and Massachusetts chalk out plans to meet their ambitious clean energy goals of achieving carbon neutrality by 2050, the offshore wind segment is set to play a significant role. The associated offshore transmission systems have to be planned holistically to ensure they do not become an impediment to offshore wind development. So far, power transmission and generation have both been the responsibility of the offshore wind developer in the US. This may change in the upcoming solicitations, at least in a few states.

For instance, New Jersey, through its recent legislation, has allowed its state agency to conduct competitive solicitations for open access offshore wind transmission facilities. The Massachusetts Department of Energy Resources (DOER), in association with the Massachusetts Clean Energy Centre (MassCEC), has sought stakeholder feedback for a possible separate contingent solicitation for independent offshore transmission. Meanwhile, New York is gearing up for its second offshore wind solicitation in 2020 as it prepares to meet its ambitious goal of achieving 9 GW of offshore wind capacity by 2035. This is the most ambitious target set by a US state. The other two states of New Jersey and Massachusetts aim to achieve 7,500 MW and 3,200 MW by 2035 respectively. Look at the recent offshore wind power developments in these states…

New Jersey: On January 22, 2020, the governor of New Jersey signed Bill S-3985/A-5663 to amend the Electric Discount and Energy Competition Act, add the definition of an open access offshore wind transmission facility and revise the law concerning qualified offshore wind projects.

The amendment requires developers seeking approval as a “qualified offshore wind project” by the New Jersey Board of Public Utilities (NJBPU), to include in its project description details on the installation of transmission and inter connection facilities. Significantly, the legislation allows the NJBPU to conduct one or more competitive solicitations for open access offshore wind transmission facilities designed to expedite the collection or delivery of offshore wind energy from qualified projects to the onshore transmission system.

The amendment also expands the definition of an offshore wind renewable energy certificate (OREC) to include the environmental attributes equivalent to 1 MW of electric transmission transfer capability from a qualified offshore wind project.

The NJBPU plans to hold one or more competitive solicitations for offshore wind transmission, which will be conducted separately from the other offshore wind solicitations. In June 2019, the NJBPU selected Denmark’s Ørsted for its 1,100 MW offshore wind solicitation. The project is expected to be commissioned in 2024. Subsequently, in November 2019, New Jersey passed an Executive Order No. 92 to set a higher offshore wind capacity target of 3,500 MW by 2030 and 7,500 MW by 2035, to help meet the state’s goals of 50 per cent renewable energy by 2030 and a 100 per cent clean energy economy by 2050. To reach its 3.5 GW by 2030 goal, the NJBPU plans to launch offshore wind solicitations of 1,200 MW each in 2020 and 2022.

Massachusetts: On January 15, 2020, the Massachusetts DOER and MassCEC invited stakeholder comments for a possible separate solicitation for independent offshore wind transmission up to February 18, 2020. They also plan to host a technical conference in Boston in March 2020. This is based on the Offshore Wind Study published by DOER in May 2019. The study recommends that the state electric distribution companies proceed with an additional 1,600 MW offshore wind generation solicitations from 2022 to 2024. It also suggests that a separate solicitation for an independent transmission system (against a single package with offshore wind generation) may take place in 2020, prior to the offshore wind solicitation in 2022. This will enable future generation projects to tie into such a main offshore transmission system. The authority to split the procurements has been given under the 2018 Clean Energy Law, which also doubled the target to achieve 3.2 GW of offshore wind capacity by 2035.

The state has awarded two projects across two solicitations – the 800 MW Vineyard wind project (contract approved in April 2019) and the 804 MW Mayflower wind project (approved in October 2019). While the former project will be commissioned by 2022, the latter will be completed in 2025.

New York: On January 29, 2020, the New York State Energy Research and Development Authority (NYSERDA) filed a petition with the New York Public Service Commission to initiate regulatory proceedings for authorising the state’s second offshore wind solicitation. This is in line with the detailed plans laid down in Governor Andrew Cuomo’s 2020 State of the State Address, “Making Progress Happen”, which affirmed that NYSERDA will issue the second solicitation for at least 1 GW of offshore wind capacity in 2020. It also mentioned that NYSERDA (along with the Department of Transportation and the Empire State Development Corporation) would initiate, during the year, a competitive process to award $200 million in public funding for offshore wind-related port infrastructure improvements.

The inaugural offshore wind solicitation, issued in November 2018, witnessed record competition with four proposers and 18 bids. The two projects that were awarded – the 816 MW Empire and 880 MW Sunrise wind projects – are expected to be commissioned by 2024.

Various developers and transmission companies have been pitching for an open access offshore wind transmission system to maximise public benefit. Some point out that New York presents the best case for a bulk offshore collector transmission system. Reportedly, NYSERDA is currently analysing issues related to transmission options and additional environmental impact criteria for the upcoming second offshore wind solicitation.

In fact, the New York Power Authority, NYSERDA, and other state energy partners undertook a study of European offshore wind transmission models and released a related report, “Offshore Wind – A European Perspective”, in August 2019. The study evaluated the transmission and grid connection strategies followed in various countries including the UK, Germany, the Netherlands and Denmark, which could guide the evolution of the US offshore wind industry.

Over time, the case for independent offshore transmission in the US has  become stronger. It is only a matter of time before the first such solicitation is released after the states work out the bid modalities.

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