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Wind and New York – and preparing for NYSERDA’s next RFP

In 2017, NYSERDA’s Renewable Energy Standard Request for Proposals yielded 26 agreements to develop 1,383 MW of clean energy capacity in New York State. With 2018 procurement actively underway, and the PTC deadline looming, the time is nigh for acquiring or progressing new wind and solar projects in New York State. However, REC-only contracts, Article 10 and long timelines for interconnections can seem daunting. Particularly in New York, what are the unique approaches developers need to be successful? How does New York differ from other nearby markets? How can developers best prepare their projects for the next NYSERDA RFP?

Strong permitting team.

Article 10 defines the siting and construction of new electric facilities with a capacity larger than 25 MW. In New York, developing a strong permitting strategy early and comprehensively is key to ensuring a project navigates the prescriptive Article 10 permitting requirements. Specifically, developers should consider the following

    1. There are statutory minimum review times for certain steps that have to be met, even if regulators complete reviews faster. Developers should plan for lengthy timelines and expect permitting to be on the critical path
    2. Quantity of permits required by Article 10 is substantial (thousands of pages in some cases) and often require authoring by a legal team.
  1. Relevant studies completed for other, recent, nearby projects (e.g. bird/bat studies) often are not accepted to ascertain biological or other environmental risk and determine the depth and breadth of the project-specific environmental and archaeological studies, as it often is allowed in other states. Developers should plan for project-specific studies.
    1. Article 10 requires specific technical details (including turbine layouts and models) be included in permit submittals. Modifying projects relative to already-submitted applications, even in small or inconsequential ways, can trigger a full re-submittal of permits and causing project delays. Developers should consider a permit submission strategy, such as submitting multiple applications in tandem, or siting turbines with conservative setback margins such that micrositing does not derail the permitting process.

Plan for long class year studies. New York’s Independent System Operator (NYISO) requires projects be held responsible for the net impact of the interconnection of its project on the reliability of the transmission system. Projects larger than 20 MW are included in a group of generation and merchant transmission projects assessed annually by NYISO staff, in collaboration with the associated developer, for annual “Class Year” Deliverability Study. This study determines the system deliverability upgrades required for the projects to interconnect with New York’s transmission study. In DNV GL’s experience, Class Year studies often extend beyond the stated single year into two to three years to complete. Developers can benefit from preparing for Class Year studies as comprehensively and early as possible, to allow parallel ongoing permitting and development.

Strong land lease negotiation and community outreach team. DNV GL calculated the average size in New York to be 3.5 acres per parcel (2.2 million parcels), compared with an average of 6.2 acres in Indiana (3.6 million parcels) as a proxy for other states in the Midwest and Texas. Therefore, developers should plan for potentially having higher numbers of landowners with whom they must interact to lease land, increasing both timelines and making it more difficult to take advantage of economies of scale.

Developers should note that turbine setback requirements are often based on property line (as opposed to the residence), which given the small parcel size in NY, can make turbine siting more challenging when attempting to maintain acoustic and safety requirements, as well as some level of conservatism to prevent re-starting the permit application if changes to the turbine layout are ultimately required.

With regards to public outreach, developers should be prepared for working through local as well as state ordinances and potential opposition. Given the increased timelines in permitting as well as class year studies, developers should consider and plan for the possibility of turnover in local elected officials.

Developers may find strategies combining multiple angles to be successful. For example, maintaining projects below 25 MW to reduce Article 10 permitting requirements, and pursuing multiple permitted layouts in combination with an early entrance into the class year study process can help reduce a New York’s project development timeline and therefore development cost by multiple months. DNV GL will follow this post next quarter with a summary of findings from a recent market evaluation, detailing developer perspectives on how the New York development scene differs from other parts of the United States.

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