New York state will look to the world leader in offshore wind deployment for advice on how to connect sea-based projects to mainland grids.
European nations have together installed nearly 16,000 megawatts of offshore wind capacity. The United States has thus far managed just one 30-megawatt project, the Block Island Wind Farm, off Rhode Island.
Earlier this month, Governor Andrew Cuomo’s office announced that the New York Power Authority (NYPA) would lead a study of successful offshore wind transmission models, particularly in Europe, to determine the most cost-effective way to build interconnections for the 2,400 megawatts of capacity to be installed off the coast of New York by 2030.
“This came out of work both NYSERDA [New York State Energy Research and Development Authority] and NYPA had been doing to try to investigate how New York state can bring down the cost of offshore wind and reach the governor’s offshore wind target, 2,400 megawatts,” Robert F. Lurie, executive vice president and CFO, NYPA, told Greentech Media in an interview.
“In order to do that much offshore wind,” he added, “we at NYPA felt that one of the unexplored areas for cost reduction was the transmission part of the equation.”
According to New York’s offshore wind master plan, transmission could account for 30 percent of the total project costs of an offshore wind farm.
In July, New York’s Public Service Commission confirmed the timeline for the first phase of the state’s offshore wind deployment. In the fourth quarter of this year, NYSERDA will issue a solicitation for 800 megawatts of offshore wind, in coordination with NYPA and the Long Island Power Authority. Winning bids are scheduled to be announced in the second quarter of 2019.
According to Lurie, developers for that first 800 megawatts of offshore wind capacity will likely be responsible for building the transmission to connect the projects to onshore grids. But, based on the findings of the new transmission study, different models could be employed for future projects.
“In the longer term, as we build out a much higher volume of projects, we need to investigate other options for how to bring the costs down for transmission,” he said.
The study aims to answer a series of questions. Who should own transmission? A public entity? One or more private entities? Or a consortium of entities? Who should finance transmission?
And how should projects be connected to mainland grids? Should planners opt for radial interconnections? That is, a single cable connecting an individual project to the onshore grid. Or a networked solution in which a few major connections act as hubs to connect distant offshore projects to online transmission?
Advice from Europe
Soon after New York announced the launch of its transmission models study, Wilfried Breuer published an op-ed at NJ Spotlight, a New Jersey politics and policy website, advising policymakers to follow Europe’s example and keep offshore wind project generation and transmission separate. Governor Phil Murphy signed an executive order in January directing New Jersey regulators to put the state on a path to deploy 3,500 megawatts of offshore wind by 2030.
Breuer is managing director of TenneT Offshore and a member of the executive board of its parent company TenneT Holding B.V. TenneT is a transmission system operator (TSO) that has connected 5,300 megawatts of offshore wind in Germany and the Netherlands to mainland grids.
“Building an offshore grid separately from the wind farms and offering access to the power grid on a nondiscriminatory basis is the key to creating a level playing field for competition between offshore generators,” he wrote.
He went on, “As can be seen in the declining prices offered by those generators in Germany and the Netherlands, providing access to an offshore grid stimulates innovation and cost reductions in the offshore wind industry.”
State support for transmission connections have enabled winning bids, both this year and last, for offshore wind projects in Germany and the Netherlands with no direct government incentives. The projects, with delivery dates in the mid-2020s, will sell their electricity on the wholesale power market.
Breuer said it was “shortsighted” for developers to seek to build and own the transmission to shore. “Bundling transmission with wind generation is ultimately more costly because it limits competition. It reserves large amounts of the grid to first movers that can develop a wind farm and provide the connection to shore.”
The result? According to Breuer, an “accidental, unregulated monopoly” that “doesn’t provide a level playing field for those developers that aren’t in the transmission business.”
In an email to GTM, Stephanie Bätjer, communications manager for the Renewables Grid Initiative (RGI), explained that in Germany “the general rule is that the project developer pays for anything connecting to and including the at-sea substation. The connection from the substation to the mainland and any mainland converter stations are the grid operators’ (financial) responsibility.” RGI is a collaboration of European environmental NGOs and TSOs based in Berlin.
New York’s transmission model study due soon
NYPA’s Lurie said the New York transmission study partners will solicit feedback from all the major European players — project developers, TSOs, regulators — in the coming weeks. The group met for the first time on August 23 to narrow the scope of the study.
The goal is to support the ongoing process by the New York Public Service Commission to evaluate technical options for offshore wind. NYSERDA is conducting a technical conference on the topic this fall.
“We want to finish this study quickly, so it can be presented into that conference and inform those discussions,” said Lurie.
Future research, he said, will determine if there are economies of scale to be gained by coordinating with neighboring states on transmission connections.
Source: Greentech Media
Date: Aug 31, 2018