Big build out continues -- New York's success story

New York is moving steadily towards its 2013 target of 25% clean energy state-wide thanks to the innovative structure of its renewables law. As well as revenue from sales of electricity, wind power generators gain additional income by bidding for contracts to sell their renewable energy credits (RECs) to the state. A building spree is on as projects supported under the program come to fruition and companies look towards an upcoming third round of bidding for REC contracts.

"We expect that we're going to have over a thousand megawatts of wind in service by the end of this year," says Carol Murphy of the Alliance for Clean Energy New York (ACENY). The state has about 470 MW of wind to date. Successful bidders are paid an average $15/MWh for RECs under the program's second round. A total of 21 contracts, worth close to $300 million, will be paid out over a ten year period.

The REC program is administered by the New York State Energy Research and Development Authority (NYSERDA) and the New York State Public Service Commission to help the state meet its requirement for a further 3700 MW of renewables. "By the end of next year we should have supported about twelve-hundred megawatts of new renewable capacity through the program and most of it is wind," says NYSERDA's Kevin Hale.

"We get monthly progress reports and haven't heard of any project that's held up and not going to make it online by the end of the time required by the contract." While the contracts call for second-round projects to be complete by January, Hale says developers are allowed to extend their online date through November 2008.

The state's wind-friendly climate and high power prices are even leading to widespread development beyond the REC program. Airtricity, which is being bought by German utility E.ON (page 27), is building a 35 MW project in New York, but it declined to take part in the RPS bid process since it received a favourable power contract.

The third request for proposals to supply RECs to the state will mirror the program's second round, giving 70% weight to bid prices and 30% to projected local economic benefits. Hale expects the new solicitation process to be complete in about six months and the projects to be online by January 1, 2009, with the same November extension option. He declines to speculate on how much wind power will result, saying it depends on the bid prices that are received.

Extremely supportive

The big beneficiary of the program's second round, Noble Environmental Power, is bringing five wind farms totalling 511 MW online before the end of next year, including 280.5 MW this year from its Clinton, Ellenburg and Bliss projects. "It's a good state with a lot of potential for projects to be developed. The communities are extremely supportive and recognizing that we're bringing clean energy and more jobs to their towns. They love the stuff," says Noble's Anna Giovinetto.

Three more projects supported under the program are in Steuben County and involve UPC Wind, a long established project developer based in Newton, Massachusetts. A 40 MW and 90 MW wind plant will be built by UPC under the name Canandaigua Power Partners. A third, Prattsburgh, at 75 MW, is a shared project between UPC and Global Winds Harvest of Schenectady, New York. As for the third round, Giovinetto expects Noble to enter the bidding. "It's certainly good news for all the developers in the market," she says. "We don't have a lot of the details yet, but we have more projects in the New York pipeline and we're certainly interested."

At a minimum, ACENY's Murphy expects New York to reach its goal of 25% renewable energy by 2013. The state had a head start: when the law was implemented in late 2004, nearly 20% of the state's electricity was clean, due mainly to large-scale hydroelectric facilities. "Right now we have adequate transmission and we're actually in discussions about increasing the [requirement] to 30%," she says. "And wind is the big dog when it comes to providing the renewable megawatts for trying to meet these targets."