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Politics

Green energy builders have asked for billions more in subsidies. New York said no.


Governor Kathy Hochul has pledged to significantly reduce New York’s dependence on fossil fuels. State law requires that by 2030, renewable resources – such as sun and wind – account for 70% of the share of electricity consumed in the state.

State law also requires that by 2035, offshore wind farms be capable of generating up to nine gigawatts of energy at any given time — up from zero today. That would be enough electricity to power more than six million homes.

Nearly half of this offshore wind power would come from four wind farms – known as Sunrise Wind, Beacon Wind and Empire Wind I and II – proposed for construction in the Atlantic Ocean near Long Island, in the framework of contracts with the State. But developers of these wind farms have recently complained that rapidly rising costs and disruptions to supply chains have made the terms of these contracts unworkable.

They and the developers of 86 onshore renewable energy projects have asked utility regulators to bail them out with increased subsidies. The total 90 projects were already expected to cost state taxpayers about $10 billion. The New York Department of Public Service estimated that granting these requests would cost taxpayers an additional $12 billion.

These demands created a dilemma for state officials. Influential labor leaders have pushed for subsidies to preserve the jobs the projects could create. But advocates for low-income utility customers argued that too many of them already can’t pay their growing monthly bills.

“The problem is we have some really good goals in place, but at the end of the day, who is going to pay for all of this? said Bill Ferris, AARP New York legislative representative, who opposed the requests. “If everyone benefits, it’s not just taxpayers who have to foot the bill. »

The contracts for each of the projects resulted from competitive calls for tenders. Rory Christian, chairman of the Public Service Commission, the state’s utility regulator, said granting aid to successful bidders would set an untenable precedent. “Making an exception today almost guarantees that we will be asked to do this again in the future,” he said.

Mr. Christian added that state taxpayers, who would have borne the cost, could not serve as an “unlimited piggy bank” for businesses. “We have a deal,” he told the developers, calling on them to respect the terms they agreed to.

His fellow commissioners unanimously agreed, rejecting the petitions.

Governor Hochul approved the decision, saying it was necessary “to maintain affordability” in an uncertain global economy and ensure New Yorkers “get the best deal.”

Denied additional subsidies, project developers will have to choose between absorbing higher-than-expected costs or breaking their contracts with the state.

If they back out of their agreements, the state Energy Research and Development Authority could put the project’s contracts back up for bid in a hurry to try to stay on track toward energy goals. clean energy. But given the increase in costs since the contracts were initially awarded, the new deals would likely come with significantly higher prices.

Fred Zalcman, director of the New York Offshore Wind Alliance, said the commission’s decision “puts these projects in grave danger and deals a potentially fatal blow to the progress these projects have made in localizing clean energy production, reinvigorating New York ports, train and deploy New York’s skilled union workers, and revitalize environmental justice communities.

Molly Morris, president of Equinor Renewables Americas, developer of the Beacon and Empire wind farms, said developers would evaluate the impact of the denial on the projects. David Hardy, general manager of the Americas region at Orsted, Sunrise Wind’s Danish developer, said the project would be “extremely difficult without this adjustment”. He said the company’s board and partners would consider next steps.


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