New York Procurement Delay Frustrates Wind Energy Developers
Mark Del Franco, Tuesday 25 September 2012 - 12:43:19
The New York State Energy and Research Development Authority (NYSERDA) - the agency that administers the state's renewable portfolio standard (RPS) for the Public Service Commission - says its renewable energy call for power has taken longer than anticipated.
"We are continuing to explore approaches to minimize risks to New York," says NYSERDA spokesperson Alan Wechsler. "The possible expiration of the federal production tax credit - a major revenue source for wind developers - and other market development trends led to a more complicated procurement situation, and approval and issuance are taking longer than we originally projected."
New York has a 30% by 2015 RPS mandate, and the program used to procure renewable energy is administered differently than in other states. In New York, NYSERDA acts as the central procurement agent and competitively offers 10-year contracts to purchase renewable energy credits from eligible projects.
A delay in procurement is precisely what both renewable energy developers and New York officials wanted to avoid.
Some say the lag between the last call for power, which was issued in December 2011, has hindered development. The $132 million solicitation - NYSERDA’s seventh call for power - resulted in contracts for seven new or upgraded facilities. Under those contracts, companies must build more than 88 MW of renewable energy capacity.
According to Carol E. Murphy - executive director of the Alliance for Clean Energy New York, a regional partner of the American Wind Energy Association - a recurring solicitation schedule would help make New York an attractive place for wind energy developers to site their projects.
"Regularly scheduled, twice-a-year RFPs from NYSERDA are vital to maintaining confidence in the New York market and allowing companies to plan their project development pipeline," Murphy says.
“Postponements - especially for undisclosed reasons and with no firm release date - create uncertainty that could result in project cancellations,” she adds. “We are hoping that the previously announced August RFP moves forward as soon as possible."
NYSERDA would not disclose how much renewable energy it would solicit in its next call for power; however, it is expected to be smaller than the amount allocated in previous solicitations.
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