Dive Brief:
- Offshore wind development will be necessary for New York to achieve its 50% renewable energy goal by 2030, according to the state’s Energy and Finance Chair Richard Kauffman, recently appointed by Gov. Andrew Cuomo to help reform the state's energy system.
- Though offshore wind has struggled to compete with other energy sources on cost, Kauffman told Bloomberg the ability to tap high-capacity-factor wind energy near the coast of New York could help the resource compete with other central station renewables, many of which would require large transmission projects to deliver energy to the state.
- The Interior Department’s Bureau of Ocean Energy Management (BOEM) last month officially designated a 127 square mile tract off the New York coast as a wind energy development area.
Dive Insight:
Price has long been an obstacle to U.S. offshore wind development, but Bloomberg notes that could change in coming years.
A recently released University of Delaware study found that offshore wind costs could fall as much as 54% by 2030. If Massachusetts committed to developing 2,000 MW of wind by that time, the researchers wrote, offshore wind could reach a price point of $0.108/kWh.
Deepwater Wind's 30 MW, five-turbine Block Island Wind Farm off Rhode Island's coast will be the first operating U.S. offshore wind project. Its 20-year power purchase agreement (PPA) calls for all output to go to National Grid, one of New England’s biggest electricity suppliers, at $0.244/kWh.
Cape Wind, the proposed $2.5 billion, 468 MW wind project planned for Nantucket Sound, had a PPA with National Grid for 50% of the project’s output and a PPA with Eversource Energy for 27.5% of its electricity. Both were set at $0.187/kWh for the project’s first year output, with annual escalators. Both were found by state regulators to be beneficial for Massachusetts ratepayers.
