By Nora Prevoznak - Associated Renewable, Inc.
Published: October 19th, 2012
Two weeks ago, the Long Island Power Authority (LIPA) board of trustees decided to extend National Grid contracts for more than a dozen fossil fuel plants. This action was just two weeks after the release of new poll data selectively for New York, which determined an overwhelming percentage individual’s favor the development of clean energy sources. For clean energy professionals, we’re used to these mixed signals and a moderately slow, interrupted pace for project development. But we’re getting anxious to know, what is the future for large scale renewable energy projects in New York?
Specifically, what is going on with offshore wind development. On the table is the proposed Long Island offshore wind project – a public-private partnership between Con Edison, the Long Island Power Authority (LIPA) and the New York Power Authority (NYPA). It will be located approximately 13 to 15 miles south of Nassau County, directionally aligned southwest of the Rockaway Peninsula. The proposal includes 350 megawatts (MW) of generation, with the ability to expand to 700 MW, giving it the potential to be the largest offshore wind project in the country. A joint feasibility study conducted by Con Edison and LIPA concluded that an interconnection of up to 700 MW of wind power would be feasible with upgrades to their respective transmission systems. The total economic impact to the Study Area during Project development and throughout the Project’s operational life is estimated to be between $1 billion and $3 billion in sales, 8,700 to 17,000 job-years created and $610 million to $1 billion in wages.
Using offshore wind power would help New York meet its goal to generate 45 percent of its electricity from renewable energy sources. Areas like Long Island are attractive to developers because they are large markets with substantial onshore loads, existing power networks and relatively low interconnection costs. The New York Public Service Commission estimates that every megawatt-hour of displaced fossil power in the state is equivalent to 900 pounds of carbon dioxide (CO2). There are significant benefits to excite environmentally-conscious individuals.
However, the fact that LIPA trustees met on October 3rd and decided to extend National Grid contracts for more than a dozen fossil fuel plants is frustrating. In response to their vote, New York Senior Representative for the Sierra Club Lisa Dix made the following statement: “It is not only disappointing, but reckless [that LIPA is not] fully exploring, in an open and transparent way, the long-term impacts on its customers’ bills and the full benefits of clean energy." The contract, valued at over $241 million a year, includes the option to upgrade the three largest plants while saving about $2 million annually.
The poll released by the Public Policy Partners in late September 2012, shows than an overwhelming percentage of New York voters favor clean energy. Nearly 9 out of 10, support expanding the use of renewable energy like wind and solar power (87% statewide and 90% on Long Island) and the majority support the state’s utilities investing in new clean energy rather than building new fossil fuel plants to meet future energy needs (76% statewide and 78% on Long Island). The poll also showed that the majority of voters statewide and in Long Island would support an offshore wind farm off the coast of Long Island (82% statewide and 85% on Long Island).
Besides the proposed collaborated project between LIPA, NYPA and Con Edison, there is also a 2010 offshore wind proposal from Deepwater Wind for the Long Island area. Their Deepwater Wind Energy Center (DWEC) would build 900 MW 30 miles east of Montauk, New York and 15 miles southwest of Martha's Vineyard in Massachusetts. It would connect to LIPA's electric grid via an innovative 98 mile submarine transmission line. The company is well capitalized with funding from D.E. Shaw, a global investment and technology development firm. They expect that DWEC will produce enough electricity to power approximately 350,000 homes and displace over 1.7 million tons of carbon dioxide emissions annually.
Meanwhile, Deepwater Wind also announced on October 3rd that it has submitted its final state and federal permit applications for the Block Island Wind Farm, Rhode Island. The public will have the opportunity to provide comment to the reviewing agencies in the coming weeks. Deepwater Wind expects this final stage of the permitting process to be resolved by early 2013. This 30 MW, $250 million project is on track, along with the Cape Wind project in Nantucket Sound, Massachusetts who has secured permits and a power purchase agreement. There are strong project proposals and investment for large scale renewable energy sources but their movement forward has been sluggish.
Back in 2007, LIPA put the brakes on a proposal to build a wind farm off of the Jones beach coastline. Opponents of the Jones Beach project had two main concerns. Some said the $811 million price tag was restrictive, while others argued a wind farm would ruin the coastline aesthetically. This is an important case to keep in perspective as we evaluate the reality of the Long Island offshore wind project. More positively though, Michael Deering, LIPA’s vice president of environmental affairs, said he believes the new collaborative proposal is much stronger than the previous LIPA Jones Beach proposal.
The offshore wind project will benefit Long Island residents by providing a clean source of energy that can help stabilize electricity prices for ratepayers and protect against fossil fuel price volatility. Offshore wind energy is also stronger and more consistent than onshore wind, whose power tends to diminish during the hottest part of a summer day, which is precisely the time that Long Island and New York City customers use the most electricity.
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