The cancellation of a major renewable energy transmission project in New York and threatened measures by the incoming Trump administration to restrict future growth and investment in the sector are unsettling the market, but recent developments in the federal project approvals and new economic data point to continued demand. for renewable energy and related infrastructure projects.
Developers Invenergy and energyRE along with the New York State Energy Research and Development Authority mutually agreed earlier this month to cancel the $11 billion Clean Path New York transmission project and 175 miles The line would have transported nearly 4 GW of wind, solar and hydropower to New York City, providing a non-fossil fuel alternative for the metro area’s growing energy demand in the transportation and transportation sectors. construction, including the growing data center market.
Rising inflation, as well as material and labor costs since the project’s contract was signed in 2021, prompted an appeal by project developers for additional state financial support for the transmission line, which was denied. The public-private partnership formed between the developers, NYSERDA and the New York Power Authority to deliver the project was also canceled.
Details of the financial arrangements for the contract were not disclosed, but the two developers, who are involved in other state energy projects, “remain committed to New York’s energy transition,” says Amy Varghese, a spokeswoman. “As we continue to advance our portfolio of renewable energy projects across the state, we will evaluate solutions to address the largest transmission bottlenecks facing New York’s power grid.”
More than two-thirds of New York’s onshore renewable energy contracts and more than 6 GW of offshore wind power were canceled last year, and state officials previously acknowledged that the 2030 goal of generating d ‘70% clean energy, established in its 2019 climate law, will probably be. should be extended until 2033.
The New York Independent System Operator (NYISO) refers in its 2024 reliability needs assessment to “increasing risks to the reliability of the statewide electric system by 2033.” The projection points to several state factors “that contribute to projected increases in peak demand over the study horizon, including electrification of the transportation and construction sectors and large, energy-intensive commercial projects that include shopping centers. data and chip manufacturing”.
State sources and market watchers have pointed to new pressures on traditional energy sources, including new ozone control mandates that will require improved pollution controls for gas-fired plants. NYISO predicts that 1.6 GW of peak capacity will be taken offline next year, with smaller gas-fired power plants owned by the New York Power Authority also retiring. Since enactment of the state’s Climate Act of 2019, New York has retired about 5.2 GW of fossil fuel generation, but installed only 2.25 GW of new renewable energy to replace it.
“NYSERDA remains committed to collaborating with our partners to catalyze work that advances our Climate Act goals,” says Deanna Cohen, a spokeswoman.
The remaining major transmission project, the Champlain Hudson Power Express high-voltage direct current line to transmit 1.2 GW of hydroelectric power from the province of Quebec to New York City, remains on track for completion in 2026 , but its powerhouse could face a 25% price hike if the next administration imposes a threatened tariff on Canadian imports, according to a report from industry publication Recharge.
Wind projects are still blowing
Meanwhile, in offshore wind development, the US Department of the Interior has expedited a comprehensive environmental review of six project leases in the New York Bight Wind Energy Area south of Manhattan, which has more than 7 GW of capacity, with the aim of rationalizing permits.
But the Attentive Energy project to be developed there, led by TotalEnergies, has now withdrawn its bid in the state’s current fifth offshore wind procurement round and bidders Copenhagen Infrastructure Partners and Orsted have submitted early-stage projects that do not they have all the federal reviews. with concern they would be slowly walked into the Trump administration. The results of this bidding round will be announced in early 2025.
Projects in other states also won key approvals, including a 2GW generating set developed by US Wind Inc. to supply Maryland to be built nine miles offshore from the state border with Delaware. It includes the multi-phase construction and operation of around 114 wind turbines, up to four offshore substation platforms, a weather tower and up to four offshore export cable routes.
Earlier this year, the 1.5 GW Atlantic Shores offshore wind project slated for southern New Jersey won federal approval to begin construction on what would be a two-part project of 2.6 GW owned by Shell New Energies and EDF Renewables.
“We are paying close attention to market reaction and remain steadfast in our support for the responsible and prosperous development of offshore wind,” says Paulina O’Connor, executive director of the New Jersey Offshore Wind Alliance.
Interior also announced this month that, despite the cancellation in 2023 of an auction of offshore wind sites in the Gulf of Mexico due to a lack of response from the bidder, recent “competing interest” from two developers in a new area of Galveston, Texas, could push for a new auction “as soon as 2026,” if not canceled or delayed by the incoming administration.
Market watchers point to a better outlook for projects slated for Louisiana development approval in shallower state waters, and those on slower tracks that will be built beyond the next administration’s four years.
Federal approvals for 15 GW of US offshore wind capacity should be enough to sustain the momentum of port development and investment, says a new report from S&P Global Commodity Insights. “There’s a lot of flux and uncertainty about what’s happening or what’s going to happen over the next four years, but the previous administration has been very good at building a strong portfolio of projects,” said John Murray, senior research analyst. “That should be ‘enough for the next four years, come what may.’
S&P projects 12 GW by 2030 based on federally permitted capacity that has already been federally permitted and is “state-contracted or likely to be.”
Port expansions ahead
With a lack of U.S. port space available for offshore wind projects starting or soon to begin construction, Murray says coastal marine infrastructure projects will continue to be in demand, particularly in the Northeast.
Two ports now under construction are the Equinor Marine Trade Terminal in New York, the Salem Marine Trade Terminal and the Salem Offshore Wind Terminal on Massachusetts’ North Shore, which Crowley is building “in anticipation of increased in project development following the collapse of previously contracted capacity in 2023.” says the S&P report. Both are expected to be completed within three years.
“Beyond 2030, the momentum for offshore wind development in the United States is expected to continue, leading to increased demand for North American port space,” S&P notes in a new report.
Murray says confidence in state renewable targets for the future is important. Several states in the Northeast “remain legally bound or committed through offshore wind policy and decarbonizing their power grids despite the Trump administration likely abandoning the federal goals enacted by Biden,” he says.
Virginia, with its nationally-leading 2.6 GW CVOW offshore wind project on track to open as projected in late 2026, is one of the most confident.
A giant jacket foundation that will support the first of three transformer substations for this 176-turbine Dominion Energy project, each a 60-meter-tall, 2,445-ton structure, was shipped in recent weeks from ‘a Danish manufacturing area in Portsmouth, Virginia. ., port installation site of the project.
“CVOW … continues to proceed on time and on budget, consistent with our previously communicated cost and timeline expectations,” said Robert M. Blue, chairman, president and chief executive officer of Dominion Energy, in an announcement of end of October that ended its sale. of a 50% stake in the project to infrastructure investment firm Stonepeak.
