New York Ne ork & Ne New Jersey UpdateJu July y 2018 Ne - - PowerPoint PPT Presentation

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New Jersey Update—Ju July y 2018

Hosted by: William O’Hearn, Communications/Outreach Manager, NJ and NY Elizabeth Barminski, Working Group Coordinator

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Introduction

• Rapid response, multimedia outreach
• Based on July 19 (NJ) hearing and July 23 (NY) Technical Conference
• Agenda: NJ and NY, each followed by Q&A
• Deadlines: 7/30 for NY Bight comments to BOEM
• 8/10 5:00 pm NYSERDA comments on Request for Information
• Coming Up: 8/20 ‘Time for Turbines’ event in Atlantic City

Logistics

• Attendees will be on “mute” during presentation
• Please submit questions via the Chat function, and we will respond to

them during the Q&A break after each state section

• If you have any difficulties, please email Lizzie at

Elizabeth@offshorewindus.org

• The recording and slides from this webinar will be available on the

member-only section of our website next week

Network’s Approach

• Regional and international perspective
• Lessons learned from Europe and other US states
• Focus on building the supply chain for all East Coast states
• MA, RI and CT are working together; NY and NJ must also
• Every state wants the ports, infrastructure, mfg. and jobs—plenty to

go around

Some Shared Themes

• New York and New Jersey both plan RFPs by end of 2018
• Both states encouraging competition—and cooperation
• Both states operating in the NY Bight Region of the OCS
• NJ BPU and NYSERDA looking for feedback on the solicitation and

selection process

• Both using a form of ORECs as funding mechanism

New Jersey Issues—Consensus

• Open, Orderly, Multi-Year, Predictable Process
• Phased in over time to take advantage of falling costs
• Speed is essential; federal tax incentives expire at end of 2019
• Competitive bidding brings down costs
• Long-term contracts offer stability

Size of Bids

• Orsted: Multiple bids, or one full 1100MW bid to save on costs
• Deepwater Wind:

q No minimum bid size of 400 MW. q Developers should be required to submit a standard bid size of 400 MW and be allowed to submit larger and smaller bids, as was the case in MA. q Smaller bids, don’t give entire RFP to a single bidder

• Equinor (Statoil): Multiple bids

Funding Mechanisms

• 1. Fixed OREC—Locked price over life of contract
• 2. Index OREC—Adjusts from month to month
• NJ BPU discussed funding model on Wednesday
• New York requires two separate bids per bidder, one for Fixed OREC

and one for Index OREC

Other Considerations

• Supply Chain flexibility across state lines—don’t be too restrictive re.

local companies

• Navigation—allow for more setbacks along shipping lanes
• Environmental—marine mammals, fish, birds
• Commercial fishing—did not testify, but continue outreach
• Workforce development & training—no testimony on this, but critical

for hitting deadlines and controlling costs (and safety)

New Jersey Next Steps

• Offshore Strategic Planning Team—Named shortly
• NJ OREC model—Proposed rule published in NJ Register in few weeks;

formal rule by end of year

• RFP by end of year
• Energy Master Plan—June, 2019

Ne New Jersey Q& Q&A

New York Overview

• Further along in their offshore wind process
• Completed Energy Master Plan
• Offshore Wind Policy Paper
• 800MW Solicitation
• Request for Information (RFI)

New York RFI

• NYSERDA will issue its first Request for Proposals in the fourth quarter
• f 2018
• NYSERDA will consult and coordinate with NYPA and LIPA
• A second solicitation may be issued in 2019
• NYSERDA will procure Offshore Wind Renewable Energy Credits

(ORECs) from awarded facilities

• Order places an obligation for Load Serving Entities (LSEs) to support

these new offshore wind resources through the purchase of ORECs from NYSERDA

New York RFI Submission

• NYSERDA seeks input into the development of its 2018 RFP
• NYSERDA issued an RFI on July 20, 2018. The RFI is available at

http://www.nyserda.ny.gov/osw-rfi

• With this RFI, NYSERDA seeks to gather stakeholder input in a number of

important areas regarding the RFP, including schedule, quantity, price, non- price evaluation criteria, and evaluation metrics.

• Comments are due in response to this RFI on August 10, 2018 by 5:00 p.m.

Eastern Time.

• Submit responses to offshorewind@nyserda.ny.gov with the subject “RFI

OSW-2018 Comments”.

RFI Content

• Responses should be concise and focused on areas where the respondent

has particular interest or expertise.

• RFI is in a “questions” format. Respondents are not required to answer all

questions and should focus on questions relevant to their field of expertise.

• Responses should be less than 30 pages, in Microsoft Word or searchable

PDF form, and without technical attachments.

• Respondents should provide only information that can be made public by

NYSERDA.

• All responses to the RFI will be published on NYSERDA’s website as

submitted and should therefore not contain any confidential or proprietary information.

NYSERDA Scoring Criteria

• 70% Bid Price--Same weighting as Renewable Energy Standard Tier 1

and also uses a Net Present Value calculation

• 20% Economic Benefits--Must include a local content requirement,

but has discretion in designing

• 10% Project Viability--Increase weight from Renewable Energy

Standard Tier 1 solicitations to account for expiring federal tax credits

New York Hybrid Procurement Approach

• Each proposal is required to include two bids, one for a fixed OREC price

(Fixed OREC) and one for an adjustable OREC price (Index OREC)

• NYSERDA has authority to award a contract for either contract structure,

but if an Index OREC is selected, the contract will specify conditions that may trigger a reversion to the Fixed OREC

• The two bids will be weighted and the 70% price component of the bid will

be scored based on this combined weighted value

• NYSERDA may employ the use of a benchmark price above which a

contract will not be awarded

• NYSERDA has discretion in specifying the contract term, which will be

between 20 and 25 years

Minimum and Multiple Bids

The RFI Asks:

• Should the 2018 RFP prescribe a minimum capacity or a minimum annual

OREC quantity per bid, and if so, what should the minimum be? Should the 2018 RFP prescribe a maximum capacity or annual OREC quantity per bid, and if so, what should the maximum be?

• Should the 2018 RFP allow bidders to submit multiple bids with differing

capacity or OREC quantities? Should this be a continuous range, or should specific discrete target quantities be prescribed by NYSERDA?

• What should the RFP include to promote economic development or tax

benefits?

Bid Price Evaluation (Index ORECs)

The RFI Asks:

• What weighting factors should be selected and why?
• What price evaluation lessons can be learned from procurements in other

jurisdictions?

• How should the maximum acceptable bid price be determined?
• The Index OREC bid prices will have to be adjusted by values for energy and

capacity in order to be compared directly to the Fixed OREC bids. How should this adjustment be performed?

• What other provisions should be included in the RFP to allow for more

competitive pricing?

New York Next Steps

• Technical Conference webinar recording and slides will be available
• NYSERDA technical working groups will continue to research many of

these issues

• RFP by end of year

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Q&A