Thu. Sep 19th, 2024
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In New York, Equinor and Orsted petitioned the state for bigger payments for their projects in June. The subsidies will ultimately be paid by ratepayers through their electricity bills once the projects begin producing energy.

Orsted, building in New York with an assist from Eversource, requested an inflation adjustment and other concessions for its project there. Equinor — the Norwegian energy giant — is also seeking a higher price for its three New York projects, which BP is a partner on.

Equinor’s three projects represent more than a third of New York’s 2035 target for 9 gigawatts of offshore wind. If completed by 2030, they’ll provide about 12 percent of the energy needed to achieve New York’s goal of having 70 percent of the state’s electricity come from renewables by that year.

Developers have a lot on the line as they seek to lock in higher payments from states.

Equinor’s Morris said that each of these projects are an investment of $4 billion to $5 billion, and while not all that capital is committed, there is a significant amount that’s already been contracted out to suppliers.

“For the closer projects a lot of that money has been put out already,” Morris said. “The risk is sitting very much with the developers at this point.”

Energy companies that have been awarded contracts by states have significant leverage as they plead for more funding.

But states also recognize they have leverage. Even as some projects stall, there’s still plenty of ocean and appetite for clean energy.

Doreen Harris, the president and CEO of the New York State Energy Research and Development Authority, said the state still has time to pivot to other projects if needed and that some project attrition has been accounted for.

“We have sufficient lease areas available to our state, and we have time to procure alternatives if they would be needed,” Harris said.

The state closed updated bids for its third offshore wind solicitation last month, and that’s linked to millions in funding for supply chain investments. But Harris said the contracted projects are linked to goals beyond New York’s, like Biden’s.

“They represent, I’d say, a critical part of the industry building that we are obviously leading here in the state,” Harris said. “Collectively we as states recognize that we are the major reason that specifically this administration could achieve their goals for 2030.”

NYSERDA is expected to weigh in on the request by companies for higher payments by the comment deadline of Aug. 28.

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