The US' Garden State is chancing having fewer developers in its upcoming solicitation after rubber-stamping a plan that might leave it with 'left over' bidders from the Empire State's round, writes Victoria Maguire Toft
Competition can lead to curious situations. Case in point: New York and New Jersey, the two brightest stars in the US offshore wind firmament with targets of 9GW by 2035 and 11GW by 2040, respectively. The pair largely share a view on the importance of offshore wind to their state energy transitions, each working towards their build-out objectives with regular auctions where power purchase agreements (PPAs) are awarded, via NYSERDA in New York or the Board of Public Utilities in New Jersey, chiefly based on the lowest bid placed. Both are also currently in the throes of their respective third solicitation, with New York planning to contract as much as 4.6GW, while New Jersey is looking for 1.2-4 GW. And this is where it gets interesting.
New Jersey launched its latest round after New York. Realizing that this jeopardized turn-out at their auction, Garden State authorities for the first time took the decision to explicitly permit projects to compete in their solicitation even if the same project was also being bid into New York's.
For New Jersey, it’s a gamble. With several bids in its solicitation potentially contingent on the result of the auction in New York, some bids may have been pulled out of the New Jersey auction. Now that New York has opted to postpone its solicitation, New Jersey may also be partially hostage to its neighbor state’s timeline.
For the developers in the topsy-turvy US Atlantic wind market, however, it means the chance to hedge bets across two major plays in the gusty New York Bight, boosting their odds of securing a route to market.
Three projects – Attentive Energy 1, Community Offshore Wind and Leading Light Wind, which all have leases won in the record-setting $4.3bn New York Bight lease sale in 2022 – are already known to be in the running for both New York's and New Jersey's solicitations and would be eager to secure a route to market as soon as possible. While all three leases are big enough to host two projects – one for each state – it remains unknown how the bids are configured and whether bidders going for New York first will have limited the options for bids in the New Jersey auction.
With contributions from Signe Sørensen
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