State Wind Energy Project Opportunities

US Offshore Wind (OSW) Year in Review July 20th: Confirming that contract pricing difficulties aren’t limited to the US, Vattenfall announced that it had paused the development of its 1.4 GW Norfolk Boreas project given escalation in costs. Vattenfall subsequently sold the project to RWE, which indicated that it’s moving forward with the project as well as Norfolk Vanguard East and West, which are economic at higher announced UK contracts for difference (CfD) prices. The higher UK CfD pricing indicates that policymakers are recognizing the need for higher pricing. August 29th: BOEM’s Gulf of Mexico auction awards one lease to RWE for the Lake Charles lease with a $4.3 million cash bid. An uncertain path to market and political animosity towards OSW in Texas resulted in no bids on the two Texas leases. These factors along with changes in the perceived risk of OSW caused many to sit on the sidelines. October 4th: The three Southern New England states (MA, CT and RI) entered into a MOU regarding collaborating on their forthcoming OSW procurements. With a total target of 6.8 GW, the RFPs offer opportunities for bidders to develop larger, more cost-effective projects and the states to diversify their procurement risks. October 7th: Governor Newsom signed a bill that authorizes the California DWR to serve as a central procurement entity to meet the state’s clean energy and reliability goals. Eligible resources include OSW. The PUC can authorize DWR to act as a central procurement agency if state energy planning demonstrates a need for the resources. This is a concrete example of political will being used to address gaps in the path to market. October 12th: The New York PSC denied the petition to authorize NYSERDA to amend its contracts for ORECs, wherein 4 OSW projects requested higher contract prices. Later that day Governor Hochul announced a 10-Point Action plan to support large-scale renewables in New York, recognizing the impact of the PSC’s decision. The Action Plan calls for accelerated procurements for OSW. October 24th: New York provisionally awards contracts to 3 OSW projects offering 4 GW at an average nominal strike price of $145/MWh, a new price benchmark about 30% higher than earlier NYSERDA OSW contracts.  October 31st:  Orsted cancels Ocean Wind 1 and 2 and takes a $5 billion earnings impairment citing a delay in its Jones Act installation vessel and the resulting knock-on effects to existing contracts that would need to be repriced. Orsted also announces final investment decision for the 704 MW Revolution Wind project.   November 29th: New Jersey Governor Murphy directs the BPU to accelerate its next OSW solicitation with the launch in early 2024, suggesting the state's commitment to offshore wind hasn’t waivered. November 30th: NYSERDA launches its 4th OSW solicitation providing an opportunity for expedited submission of proposals and allowing 4 OSW projects that weren’t allowed to reprice their contracts to rebid.    

For a state that is the third-largest oil producer in the U.S., North Dakota is showing us how to excel in renewable energy. I recently visited North Dakota (my 50th state!) and was blown away by the scale of wind energy development. The picture below is from a NextEra project (Brady Wind) that produces 300 MW annually - enough to remove 49 cars from the road annually. No matter where I went in North Dakota, from Fargo or Dickinson, I saw wind turbines for miles and noticed a strong presence of wind farm technicians. It's no surprise: North Dakota's wind industry is the 17th largest in the country, producing 4,302 MW in 2023. The state and the private sector have invested $8 billion in wind energy, increasing the state's generation capacity by 2.5 times over the past decade. Wind now powers over a third of all in-state electricity, supports 2,200 jobs, and contributes $20.7 million annually in taxes - 40% of which supports local school districts. Amid the global energy transition, North Dakota offers a valuable model of how to align federal, state, and local policies to encourage investment in wind energy. Here's how they've done it: 1.) Voluntary Renewable Portfolio Standards (RPS): Set a target of 10% of electricity from renewables by 2015, driving investment and development. 2.) Tax Exemptions: Offered property and sales tax exemptions for wind energy equipment, making development more affordable. 3.) Transmission Authority: Created a state Transmission Authority to work with stakeholders and utility companies, facilitating infrastructure development. 4.) Bipartisan Leadership: Enjoyed strong support from both parties in the state legislature and governor's office for policy development and implementation. Despite some challenges, North Dakota's success in wind energy provides a blueprint for effective government-business-community collaboration in renewable energy development. What other examples of successful energy development collaborations have you seen? American Clean Power Association (ACP), North Dakota Department of Commerce, NextEra Energy, Inc. #windenergy #northdakota #collaboration #renewableenergy

2 GW CT RFP ISSUED - ALLOWING FOR 6,800 MW OF COORDINATED OSW PROCUREMENTS IN NEW ENGLAND Yesterday, #Connecticut issued two RFPs for clean energy resources, including an RFP for 2,000 MWs of #offshorewind. This step completes the solicitation pieces to enable the October 3, 2023 MOU for coordinated #OSW procurement issued by CT Department of Energy and Environmental Protection, Massachusetts Department of Energy Resources, and the Rhode Island Office of Energy Resources. (MOU HERE: https://lnkd.in/eWhiQxsU) The CT RFP is soliciting up-to 2 GW of #OSW along with onshore resources that can include "solar, onshore wind, energy storage paired and co-located with a zero carbon resource, zero carbon fuel cells, geothermal, energy efficiency, and run-of-river hydropower." (CT RFP INFO HERE: https://lnkd.in/eGbUb3zJ). Combined with the Rhode Island RFP for 1.2 GW of OSW issued earlier this month (Oct. 2023) and the Massachusetts solicitation from this summer seeking up-to 3,600 MWs, the combined tri-state effort allows for procurement of up to 6,800 MW of offshore resources. Notably, the CT RFP allows for bids to have adjustable price elements to avoid the issues recently seen with project-killing global economic shifts. "A new provision in the offshore wind RFP allows bidders to submit pricing at a fixed rate or at a rate that is indexed to the price of listed macroeconomic factors and commodities and that would be fixed at a date certain in the future. This indexed pricing option adjusts for changes, such as inflation, that may occur after the bid due date but before the project reaches financial close (i.e., when project costs for the developer are more locked in) to adjust the final price up or down by no more than 15%." Why this matters? While there have been some head winds for offshore wind globally and in the US, recent shifts by procuring states mean that the demand is remarkably strong: CA issued centralized procurement authority for its 25 GW target, NY recently issued the largest single state, single procurement for over 4 GW of OSW and is moving to quickly backfill projects that hit difficult economics AND add new US turbine supply chain capabilities. This combined with more aggressive lease schedules form Bureau of Ocean Energy Management and #transmission plans from U.S. Department of Energy (DOE) & the DOE Grid Deployment Office in concert with state plans for coordinated transmission in New England, new transmission in New Jersey via a 2nd SAA and now new corridor bids (see yesterday's post), NYISO's PPTN, and Pacific Northwest National Laboratory's recent findings about transmission for N. CA and S. OR, show strong federal and state action and investment. #klgates https://lnkd.in/eRT89piB