United States

United States

US agency seeks feedback on LI-NYC site

NYPA consortium to negotiate lease if no competing interest

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The prospects of an offshore wind farm being developed about 20km south of Long Beach have been boosted by a notice issued by the US Bureau of Ocean Energy Management (BOEM) last week.

BOEM has issued a formal request to determine if there is competitive interest in the 329km2 site in the waters off New York state. The federal agency is also seeking public comment on the proposal for the LI-NYC offshore wind project, including its potential environmental impact. Public comments are due by 6 March.

In September 2011, BOEM had received an unsolicited request for a commercial wind lease for the LI-NYC offshore wind farm from state-owned utility New York Power Authority (NYPA). NYPA, along with the public Long Island Power Authority (LIPA) and a private utility, Con Edison, proposed a 350MW project at the site, which could be expanded to 700MW.

Jennifer Simon Lento, an expert on offshore wind at law firm Nixon Peabody, said that she had not heard of other parties interested in the site. "That does not mean to say there aren’t any — we’ll know within 60 days," she said.

If there is no competing interest, BOEM would negotiate lease terms with the LI-NYC offshore wind project consortium, said a BOEM official on condition of anonymity. If approved, the LI-NYC project would not start construction before 2017, said Chris Olert, a spokesman with Con Edison.

The fact that BOEM is gauging interest is a "hopeful" sign for the project, commented Amy Grace, lead US wind analyst at Bloomberg New Energy Finance. But she said that the question of whether there is a a financial incentive for the project developer or owner, such as the Investment Tax Credit (ITC), is ultimately more important.

President Barack Obama supports the reinstatement of the ITC in 2013. It was included in bills passed by Congress early this month. The ITC, which gives wind developers a tax break worth 30% of a project’s capital expenditure, is only available for projects that start construction in 2013. The credit is taken once the project is commissioned.

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