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Electricity bills won’t be coming to the rescue.
Offshore wind developers aren’t going to get more money from New Yorkers to complete their projects.
On Thursday, New York’s Public Service Commission, which regulates utilities, rejected a request by an alliance of developers of offshore wind and other large-scale renewables projects to have their contracts adjusted for higher costs.
The difference, which the commission’s staff estimated to be $12 billion, would have translated to ratepayers paying an extra $4.67 a month on their electricity bills, according to an analysis by the New York State Energy Research and Development Authority (NYSERDA).
The projects, 91 in all, make up 13.5 gigawatts of planned capacity, almost a quarter of what the state projects it will need by 2030. They include four offshore wind farms that would make up over four gigawatts of capacity, plus a mix of onshore wind, solar, and transmission projects. In the run-up to Thursday’s meeting, an alliance of labor, business, and environmental groups pushed the commission to accept altering the contracts in order for the projects to stay on track.
The entire offshore wind industry has been dealing with rapidly rising costs and has been in a game of chicken with governments across the world over who should shoulder them.
What happens next, especially for the four offshore wind projects in New York state, is, well, up in the air. It’s possible that the developers could cancel the projects and the state could put them out for another round of bidding. There could be some kind of deus ex machina funding coming from taxpayers, a coalition of states in the region, or the federal government.
In New Jersey, the state legislature and governor agreed to send federal subsidies to offshore wind developers in order to keep costs down. But in Massachusetts, developers agreed to pay cancellation penalties instead of going through with projects that they thought were uneconomic.
On Thursday, New York’s commissioners placed blame for any cancellation or delay of the offshore wind projects on the developers for not being able to deliver profitable projects within the terms of their original contracts.
“Many are left with the impression that the fate of the clean energy transition rests entirely on this action today,” the commission’s Chairman Rory Christian said. “These projects ... collectively represent a portion of our collective effort to bring various mandates ... to bear and achieve the clean energy future demanded by the public.”
Existing New York state law mandates that 70 percent of the state’s electricity come from renewables by 2030. For downstate New York — the Hudson River Valley, New York City, and Long Island — this law means a fast energy transition, as the region is largely dependent on fossil fuels, namely natural gas, for electricity. It also makes up the bulk of the state’s population and electricity use. Since the shutdown of the Indian Point nuclear power plant in 2021, the region's energy future has long been assumed to be offshore wind.
The developers “could still re-bid and, if successful at a future solicitation,” a filing by NYSERDA said, “however, this could result in significant delays and thus impact the state’s progress towards achieving the Climate Act goal of serving 70% of the State’s electric load with renewable energy by 2030.”
“These projects are not everything,” Christian responded. “They are one part of our portfolio.”
“Some large-scale projects facing massive milestone payments need greater certainty than afforded by today’s decision, and unfortunately will likely cancel projects and withdraw from the New York market. Other projects will have the ability to re-bid, and we do expect that many will re-bid,” said Anne Reynolds, executive director of the Alliance for Clean Energy New York, an industry group that petitioned for the contract adjustments.
“We also expect that collectively, hundreds of millions of dollars that were invested as contract deposits will be lost; the bid prices will be higher based on the same inflation pressures we described in our petition; the 2024 construction season will be missed; and various grid interconnection deadlines will be missed.”
The commissioners, both Republican and Democrat, were little moved by developers’ pleas that the projects would be delayed or even canceled.
“The developers have a contract,” said Commissioner Tracey Edwards. “The audacity that you would think this commission would grant an additional $12 billion ... [it]is just not doable. Walking away is your choice and we certainly hope you do not do that.”
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Did a battery plant disaster in California spark a PR crisis on the East Coast?
Battery fire fears are fomenting a storage backlash in New York City – and it risks turning into fresh PR hell for the industry.
Aggrieved neighbors, anti-BESS activists, and Republican politicians are galvanizing more opposition to battery storage in pockets of the five boroughs where development is actually happening, capturing rapt attention from other residents as well as members of the media. In Staten Island, a petition against a NineDot Energy battery project has received more than 1,300 signatures in a little over two months. Two weeks ago, advocates – backed by representatives of local politicians including Rep. Nicole Mallitokis – swarmed a public meeting on the project, getting a local community board to vote unanimously against the project.
According to Heatmap Pro’s proprietary modeling of local opinion around battery storage, there are likely twice as many strong opponents than strong supporters in the area:
Heatmap Pro
Yesterday, leaders in the Queens community of Hempstead enacted a year-long ban on BESS for at least a year after GOP Rep. Anthony D’Esposito, other local politicians, and a slew of aggrieved residents testified in favor of a moratorium. The day before, officials in the Long Island town of Southampton said at a public meeting they were ready to extend their battery storage ban until they enshrined a more restrictive development code – even as many energy companies testified against doing so, including NineDot and solar plus storage developer Key Capture Energy. Yonkers also recently extended its own battery moratorium.
This flurry of activity follows the Moss Landing battery plant fire in California, a rather exceptional event caused by tech that was extremely old and a battery chemistry that is no longer popular in the sector. But opponents of battery storage don’t care – they’re telling their friends to stop the community from becoming the next Moss Landing. The longer this goes on without a fulsome, strident response from the industry, the more communities may rally against them. Making matters even worse, as I explained in The Fight earlier this year, we’re seeing battery fire concerns impact solar projects too.
“This is a huge problem for solar. If [fires] start regularly happening, communities are going to say hey, you can’t put that there,” Derek Chase, CEO of battery fire smoke detection tech company OnSight Technologies, told me at Intersolar this week. “It’s going to be really detrimental.”
I’ve long worried New York City in particular may be a powder keg for the battery storage sector given its omnipresence as a popular media environment. If it happens in New York, the rest of the world learns about it.
I feel like the power of the New York media environment is not lost on Staten Island borough president Vito Fossella, a de facto leader of the anti-BESS movement in the boroughs. Last fall I interviewed Fossella, whose rhetorical strategy often leans on painting Staten Island as an overburdened community. (At least 13 battery storage projects have been in the works in Staten Island according to recent reporting. Fossella claims that is far more than any amount proposed elsewhere in the city.) He often points to battery blazes that happen elsewhere in the country, as well as fears about lithium-ion scooters that have caught fire. His goal is to enact very large setback distance requirements for battery storage, at a minimum.
“You can still put them throughout the city but you can’t put them next to people’s homes – what happens if one of these goes on fire next to a gas station,” he told me at the time, chalking the wider city government’s reluctance to capitulate on batteries to a “political problem.”
Well, I’m going to hold my breath for the real political problem in waiting – the inevitable backlash that happens when Mallitokis, D’Esposito, and others take this fight to Congress and the national stage. I bet that’s probably why American Clean Power just sent me a notice for a press briefing on battery safety next week …
And more of the week’s top conflicts around renewable energy.
1. Queen Anne’s County, Maryland – They really don’t want you to sign a solar lease out in the rural parts of this otherwise very pro-renewables state.
2. Logan County, Ohio – Staff for the Ohio Power Siting Board have recommended it reject Open Road Renewables’ Grange Solar agrivoltaics project.
3. Bandera County, Texas – On a slightly brighter note for solar, it appears that Pine Gate Renewables’ Rio Lago solar project might just be safe from county restrictions.
Here’s what else we’re watching…
In Illinois, Armoracia Solar is struggling to get necessary permits from Madison County.
In Kentucky, the mayor of Lexington is getting into a public spat with East Kentucky Power Cooperative over solar.
In Michigan, Livingston County is now backing the legal challenge to Michigan’s state permitting primacy law.
On the week’s top news around renewable energy policy.
1. IRA funding freeze update – Money is starting to get out the door, finally: the EPA unfroze most of its climate grant funding it had paused after Trump entered office.
2. Scalpel vs. sledgehammer – House Speaker Mike Johnson signaled Republicans in Congress may take a broader approach to repealing the Inflation Reduction Act than previously expected in tax talks.
3. Endangerment in danger – The EPA is reportedly urging the White House to back reversing its 2009 “endangerment” finding on air pollutants and climate change, a linchpin in the agency’s overall CO2 and climate regulatory scheme.