BY: SAMANTHA MALDONADO, MARIE J. FRENCH
ALBANY — New York and New Jersey may have their offshore wind goals nailed down, but how to bring the power to land remains very much in the air.
Transporting electricity produced by wind turbines off the coasts of New York and New Jersey to shore requires a decision: should states guide a planned grid offshore or let each project developer go it alone?
So far the two states have opted to let offshore wind developers plot their own path for transmission lines to connect to their grids. That may ultimately result in higher costs, missed opportunities and an inability to advance future offshore developments.
Both states are examining the issue of transmitting offshore wind to shore and plugging it into some of the oldest electric infrastructure in the country.
“If we’re going to have a complete revolution of where we get our power from, it only makes sense that you’re going to plan out how to get that power to shore,” said Janice Fuller, president of New Jersey OceanGrid, a division of transmission developer Anbaric. “It can’t be left to this one-at-a-time, we’ll figure it out as we go [process]. … We only have one opportunity to do this right.”
With each new award to an offshore wind developer who picks the least-cost and best-located point to hook into the grid, the number of places to interconnect decreases and potential upgrade costs increase. That may raise the bids submitted by wind developers to states seeking thousands of megawatts to support their climate goals.
A major barrier to policymakers moving ahead with detailed plans for an offshore grid is the lack of clarity on where new wind projects might be sited. The federal government is slow-walking new leases off the area’s coastline, making any planning nebulous.
“It is harder to make material progress on transmission issues on the wet side when you don’t know where the lease areas will be located,” said Doreen Harris, interim president and CEO of the New York State Energy Research and Development Authority.
As it stands, there may not be enough capacity in the leased areas to meet the two state’s goals: a combined 16.5 gigawatts by 2035.
Setting up an offshore grid to collect electricity generated from multiple wind projects and making proactive onshore upgrades to the grid could ensure lower overall costs for electricity customers, and prevent major additional work on land. Fewer cables could minimize impacts on traditional maritime interests, including shipping and fishing.
“From Anbaric’s perspective, there’s risk mitigation through planning transmission. If you’re making decisions about transmission ahead of time or in parallel with your construction of generation, you can help to de-risk some of this,” Fuller said.
She added that a backbone grid would likely work effectively because it would mean fewer transmission lines and less destruction to the community.
Anbaric released detailed results of its own study that finds significant cost benefits for shared offshore transmission for New York and is working on a similar analysis for New Jersey. Anbaric has also submitted a proposal for a New York-New Jersey offshore grid to the Bureau of Ocean Energy Management.
But an offshore grid would bring its own challenges.
Experiences in Europe, where transmission developers missed deadlines and left offshore electricity essentially stranded, highlight those concerns. Questions of who pays — especially if something goes wrong — make planned transmission a hefty policy lift.
Then throw in disparate states with their own priorities — interests in securing competitive bids and electricity injected directly into their grids — and the complication of multi-state grid operators and federal regulators. It’s a potentially years-long planning effort that’s in extremely early stages.
The Federal Energy Regulatory Commission will host a technical conference in October to consider how independent offshore transmission could be integrated into both independent system operators and regional transmission operators.
“The struggle that I have seen for offshore transmission development is that everyone starts off with the grand concept instead of the increment,” said Doug Copeland, development manager of Atlantic Shores Offshore Wind. “It’s really hard to say we’re going to go from no offshore wind transmission to a $10 billion system that connects multiple ISOs.”
The Atlantic Wind Connection, an offshore transmission line proposed in the mid-2000s for the east coast that could support 6,000 megawatts of power, “was really visionary but it kind of was out in front of where the states were with offshore plans, and now states’ offshore wind plans have kind of caught up,” said Brandon Burke, policy and outreach director at the Business Network for Offshore Wind.
New York’s ongoing offshore wind study is examining both onshore and offshore portions of supporting the state’s 9 gigawatt by 2035 offshore wind goal. Initial results are expected in the fall.
Harris said the study also is expected to influence decisions in New York’s open solicitation for up to 2,500 megawatts of offshore wind. The results of the study will help identify near-term projects that best fit in with future plans.
Anbaric’s New York study identified some of the key limitations of the existing grid and geography, including the limited number of cables that can run under the Verrazzano-Narrows Bridge to prime interconnection points in the city. If that space is utilized by individual projects carrying fewer megawatts, much more electricity will have to plug in on Long Island — driving the need for more upgrades on that grid at a higher cost, Anbaric’s analysis says.
Kirsty Townsend, head of special projects and decision support at Ørsted, which has secured contracts with New York — in partnership with Eversource — and New Jersey, said New York’s older grid and limited number of interconnection points makes the need for planning more urgent there.
“Maybe even as near as the solicitation following this one, some form of significant investment in onshore transmission is needed to support their goals and potentially some form of shared offshore system might be the most cost effective way for New York ratepayers,” she said.
That will depend on which projects are successful in ongoing solicitations in the two states and Massachusetts, where they connect and what other lease areas are available, Townsend said
Interconnection issues and the lack of federal lease areas are a particular concern for developers that have not yet secured leases — shutting them out of state solicitations.
Bill White, president & CEO of EnBW North America, said that the growing size of offshore wind projects are starting to approach the technical limits of transmission, which may change the analysis for policymakers and developers. EnBW has not won a federal lease yet.
“Developers are leading the interconnection of the first mover projects, but given the limited near-shore transmission capacity, we will need a public-private collaboration in order to solve the transmission challenge and meet these vital offshore wind energy mandates,” White said. “Whether this involves a coordinated onshore or offshore grid remains to be seen, and while the challenge is complex, it can’t be harder than landing a man on the moon, which this country did more than 50 years ago.”
While federal inaction makes wet-side planning difficult, Harris said the onshore planning is more straightforward and the focus is on identifying the best interconnection points to accommodate 9 gigawatts of new energy at the lowest costs.
Gov. Andrew Cuomo’s administration already appears to be laying the groundwork to share the costs of upgrading Long Island’s grid to support offshore wind projects plugging in there and more power flowing to New York City. The Long Island Power Authority filed a petition on July 30 asking the Public Service Commission to declare a new connection between its grid and Con Edison’s grid in New York City a “public policy transmission need” to support the offshore wind goal.
This would trigger a process by the New York Independent System Operator to solicit projects to increase the transfer of power between Long Island’s antiquated and isolated system and New York City’s. LIPA says costs should be distributed to ratepayers across the state.
New Jersey, too, is grappling with how its grid can accommodate the 7.5 gigawatts of offshore wind planned for 2035, plus another potential 3.5 gigawatts that may be necessary to achieve state clean energy goals by 2050.
With a limited number of optimal points onshore, the state has acknowledged that developing transmission on a project-by-project basis will only go so far. A draft wind strategic plan directs New Jersey to work with PJM and local utilities on an offshore wind transmission study.
The plan also requires the state to consider different transmission options: a single radial interconnection point and a backbone to accommodate the state’s current goals, as well as an interregional backbone to accommodate up to 15 gigawatts of offshore power.
Like the first solicitation, a draft for the state’s second wind solicitation for between 1,200 and 2,400 megawatts calls for a “bundled” proposal with both generation and transmission assets, but specifies that bidders must address how their transmission plans may be able to work with any future interconnection and transmission solutions.
To determine those solutions, the New Jersey Board of Public Utilities hosted a meeting on transmission planning for offshore wind late last year, and this summer completed an information gathering session on the matter, as well. A consultant hired by the BPU is helping to figure out next steps.
The Garden State wants to be the hub of the burgeoning east coast offshore wind industry when it comes to the supply chain, and most key players are in agreement, too, that regional planning will be necessary for transmission.
Conceivably, New Jersey could fare well in collaborating with Delaware, Virginia and Maryland — states within the PJM region that also boast robust offshore wind plans. (PJM, however, has not had a stakeholder process to examine transmission issues for about a year.)
“At some point I think the whole mid-Atlantic will be getting closer and closer together in trying to look at this as a regional approach, and I think that’s good,” said BPU President Joseph Fiordaliso, who has also expressed interest in cooperating with New York on transmission.
Geographically, New York and New Jersey planning transmission together would also make sense.
“For the first time, we’re expanding the grid in a major way in an area where we haven’t had a grid,” said Rob Freudenberg, vice president of the energy and environment program at the Regional Plan Association. “Putting it offshore and getting it onshore changes the way we approach the grid. In that sense, it’s a bit of a paradigm shift because you can bring a cable from a New York wind project into New Jersey.”
But the states and their leaders will need to tackle political problems such as cost allocation and coordination between two grid operators — not to mention the questions of how to pay for an offshore grid, seek a developer and divide up risks. That’s why solidifying the technical aspects of transmission planning first — as studies at the state level focus on — is so important.
“If you have a solution each state is pushing forward on transmission or there’s a technical match-up, you could then outline to the decision makers what the ramifications would be of that and then they are able to bring forward the solution that becomes more political,” Copeland said.
“If there were a conclusion that there is a grid we would want to advance from a planned perspective,” Harris said, “we would then need to determine the best policy to achieve it.”
But the ultimate challenge for planning transmission comes back to the issue of leasing.
Future leasing areas will be “an important data point on what sort of solutions might be best and what sort of coordination between New York, and New Jersey might be advantageous,” said Gabe Tabak, the American Wind Energy Association’s counsel for federal regulatory affairs.
With the lease areas restricted, it’s difficult for each state to plan ahead or envision the size and design of any transmission system — and that’s before taking into account potential future lease areas that may become available.
Moving forward with such a plan, said Townsend, of Ørsted, would be a “real leap of faith,” but a necessary one.
“It would be a really tough decision for any state to take that first leap of faith, and if you don’t take the leap — if you take too small a step — then you don’t realize the benefits of the shared system and then you’re taking on all that cost risk but for no potential upside,” Townsend said, adding that states should be working on shared standards for offshore transmission and addressing supply chain needs for a potential shared grid.
But Harris said timing makes state collaboration on transmission a challenge. New York’s current study, for example, is a technical one and limited in scope to the state’s 9-gigawatt goal.
“It is not a broader regional planning activity that many would say should and could be considered as part of the goals that we are all advancing,” she said, noting the state has the advantage of a single-state transmission system. “We in New York don’t want to wait for planning activities that could ultimately slow down our progress toward achievement of our goals.”
Of course, some argue that regional planning is essential in order to see through those objectives.
“Optimally, states would collaborate to utilize shared transmission to achieve their goals because of the size of their goals and the location of the interconnection points on shore relative to the position of lease areas offshore,” Burke said.
***Anbaric received permission from Politico to post this story***