PrintShare


Publications

New York Seeks Federal Approval for Off-Shore Wind Leasing Sites

Client Advisory

October 11, 2017

New York State has taken another important step forward on promoting off-shore wind energy development. On September 29, 2017, New York State filed a request with the Department of Interior’s Bureau of Ocean Energy Management (BOEM) for BOEM to offer two areas in the Atlantic Ocean south of Long Island and east of New Jersey for off-shore wind development. The recommended “East Area for Consideration” is located between the Ambrose-to-Nantucket Safety Fairway to the north and the Hudson Shelf Valley to the south, measures about 389,280 acres, and is 26.5 statute miles from land at its closest point. The recommended “West Area for Consideration” is located between the Hudson Shelf Valley to the northeast and the Barnegat-to-Ambrose Traffic Lane to the west, measures about 672,522 acres, and is 21.1 statute miles from land at its closest point.

New York State conducted studies on marine wildlife, benthic environment, birds and bats, fisheries, archaeology and cultural resources, visual impacts, onshore permitting constraints and other impact categories and determined the East and West Areas to have the fewest conflicts with ocean users, natural resources, infrastructure, and wildlife. New York concluded that these two locations also should be cost-effective for developers to construct the off-shore wind turbines and necessary electric transmission lines that could interconnect into New York City or western Long Island. New York is requesting that BOEM (i) delineate four new “Wind Energy Areas” within the East and West Areas for Consideration that could each be capable of siting 800 megawatts of off-shore wind and (ii) proceed to leasing these areas to off-shore wind developers through an auction process.

The time period to lease, complete environmental reviews, receive permits and construct the off-shore wind turbines and transmission lines is likely to be approximately ten years. Pursuant to the Energy Policy Act of 2005 and its offshore renewable energy regulation adopted in 2009, BOEM will now conduct the necessary studies, including conducting an environmental review under the National Environmental Policy Act (NEPA), to identify the Wind Energy Areas that will be available to off-shore wind developers. BOEM’s leasing process involves a stakeholder comment period, a proposed sale notice, submission of bidder qualifications, a final sale notice, and a lease auction that would ultimately result in execution of the lease with the awarded developer. It is important to note that the lease does not grant the lessee the right to construct the off-shore wind facilities; rather, the lease at this stage allows the lessee to study and design its offshore wind project for review and approval by BOEM.

After securing the lease through the BOEM auction process, the lessee must develop a site assessment plan for approval by BOEM. Approval of the site assessment plan then allows the lessee to construct and install equipment to perform the necessary site assessment functions (such as installing a meteorological tower to measure wind speeds). After completing the site assessment, the lessee needs to develop its construction and operations plan. Supplemental environmental review under NEPA may also be required for the specific development plan. Only after the construction and operations plan is approved by BOEM can the lessee begin construction of the off-shore wind farm. In addition, before construction commences, a number of other reviews must also be completed as part of the licensing processing, including compliance with the Endangered Species Act, Coastal Zone Management Act, Clean Water Act, Rivers and Harbors Act, and National Historic Preservation Act as well as New York’s program for siting of electric transmission lines under Article 7 of the Public Service Law.

While development of off-shore wind will involve a rigorous and lengthy review process for interested developers, there certainly appears to be a market for off-shore wind. For instance, bidding in the BOEM auction for an area approximately 79,000 acres off of New York (located to the northwest of New York’s recommended West and East Areas and thus closer to land) lasted 33 rounds and was won by Statoil Wind US LLC for approximately $42.5 million. The leasing process for Statoil Wind lasted over three years, beginning with publication of a Request for Interest in the Federal Register in January 2013; followed by (i) a call for additional nominations published in May 2014, (ii) a proposed sale notice for commercial leasing for wind power published in June 2016, and (iii) a final sale notice published in October 2016; followed by a lease sale auction held on December 15-16, 2016; and ending with the execution of the lease by Statoil in March 2017. Because New York has commenced many of the studies necessary for the BOEM leasing process to begin, New York anticipates in its BOEM filing that the leasing process for the East and West Areas will be faster – taking about one to two years to complete.

New York’s goal is for private developers to build up to 2,400 megawatts of off-shore wind by 2030 in furtherance of achieving the State’s Clean Energy Standard in which 50 percent of New York’s energy would come from renewable sources by 2030. It is clear that New York has expended considerable resources and time in conducting the preliminary studies and involving a large number of stakeholders towards achieving its off-shore wind goals. However, past experience has shown that the development of utility-scale off-shore wind has been very protracted and difficult to accomplish. Hopefully, the learning experience from Deepwater Wind with its five turbine off-shore project located in the Atlantic Ocean near Block Island and other offshore projects in the U.S. will allow additional off-shore projects to proceed more quickly and efficiently.

New York’s filing with BOEM is available on the NYSERDA website at https://www.nyserda.ny.gov/All-Programs/Programs/Offshore-Wind/New-York-Offshore-Wind-Master-Plan/Area-for-Consideration

More information on the BOEM process is available at https://www.boem.gov/Offshore-Wind-Energy/

Questions regarding this advisory should be addressed to the authors Christine A. Fazio (212-238-8754, fazio@clm.com), Christopher Rizzo (212-238-8677, rizzo@clm.com) or Judith Wallace (212-238-8743, wallace@clm.com).



Carter Ledyard & Milburn LLP uses Client Advisories to inform clients and other interested parties of noteworthy issues, decisions and legislation which may affect them or their businesses. A Client Advisory does not constitute legal advice or an opinion. This document was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. © 2017 Carter Ledyard & Milburn LLP.
© Copyright 2017

Related practice area:


© Copyright 2017 Carter Ledyard & Milburn LLP