New York is on the hunt for cleaner energy.
But these solutions do not appear overnight.
In efforts to develop energy facilities like offshore wind development that provide cleaner power, the State has a lot of hurdles to overcome.
Teams must undergo research, survey the ocean, study the weather, get permits approved, and find funding.
How is New York going to find the money to pay for such projects? The answer may lie in the predevelopment stage.
Wind development work is no easy feat
Offshore wind projects are no simple feat. These developments require an enormous amount of research and planning before construction can even be considered.
While the general consensus is that offshore wind projects mean better and cleaner power, the road to actually implementing them is arduous.
The cost of all the early work often falls to the developers, meaning the company puts in a lot of money before any kind of profit is seen.
These costs can therefore be risky, and construction delays can increase them even further. In an effort to lower risk and cost, the state has an interesting plan in place.
The New York State Energy Research and Deployment Authority, NYSERDA, has decided to open a funding scheme to advance projects in a more timely manner.
They have considered the link between these wind developments and consumers’ household bills. If they advance projects sooner, it could lower the cost for ratepayers, ie: those who pay electricity bills. If they help these projects advance more quickly, then benefits would be seen earlier on.
So it is in the public’s best interest as well that these projects are not delayed.
But how would the funding scheme work?
How the funding for these wind projects works
To accelerate these projects, NYSERDA started the Offshore Wind Project Predevelopment Program Opportunity Notice at the beginning of October. This is a call for funding requests for each specific wind project.
A Program Opportunity Notice (PON) is the standard name for a funding announcement that tells us what money is available, who can apply, what it can be spent on, and how to apply. The document acts as a rulebook for grant programs, with this one specifically focusing on the predevelopment of offshore wind projects.
What will this money do?
The funding has three goals, all relating to getting a wind farm ready before the state decides whether to buy its power.
It helps projects move further along by supporting early research, keeps a project on track, and helps a project compete for buyers.
Ultimately, if a project is well prepared, it is better positioned to win a state contract, whereby the state buys its electricity for a set number of years, and is better positioned to combat obstacles like this in the future.
A project on track is a project set to succeed
These wind farm developments have to win over loans in order to start their construction.
This brings them closer to production, where they can sell electricity and make a profit. If these projects are kept on track by this funding, it will stop early delays from blocking construction, and therefore keep the project in motion.
Companies can apply up until December 31, 2029, on a rolling basis, and NYSERDA has said it intends to give up to $10 million per project.
This money will pay for the early work only, but it is crucial to keep these developments on track to construction.
Whether this plan works will depend on how many companies apply and how much money the state commits to. These offshore wind projects still face major hurdles, but each project that gets closer to construction is a step closer to clean power.
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