Based on the totality of this analysis, this concludes that Great Lakes Wind currently does not offer a unique, critical, or cost-effective contribution toward the achievement of New York State’s Climate Act goals beyond what existing, more cost-competitive programs are currently expected to deliver. This conclusion is based on a fulsome analysis of the resource development costs, ratepayer impacts, expected State benefits, transmission and interconnection limitations, infrastructure and supply chain constraints, visual impacts, and potential environmental impacts of Great Lakes Wind, as discussed below and throughout the Feasibility Study.
The Feasibility Study analyzed the physical characteristics of Lake Erie and Lake Ontario to determine that they would require a combination of fixed offshore wind foundations in Lake Erie and floating offshore wind foundations in Lake Ontario. The Feasibility Study further notes that the potential theoretical buildout of the New York areas of each lake could result in a generation capacity of up to 1,600 megawatts (MW) in Lake Erie and up to 15,000 MW in Lake Ontario. But this theoretical and technical potential faces numerous practical considerations that would need to be addressed before such projects can be successfully commercialized and benefit the State. These practical considerations include higher relative costs compared to alternative renewable energy generation, risks associated with new technologies (e.g., floating wind platforms and ice loading), lack of an existing supply chain, lack of adequate port facilities and specialized vessels, limited Points of Interconnection (POIs) and associated transmission headroom, and challenges related to visual impacts, wildlife impacts, and uncertainties with regards to environmental risks as well as conflicts with other lake uses including commercial and recreational fishing, shipping, and navigation.
The Feasibility Study estimates costs associated with Great Lakes Wind that at first appear comparable to costs under the Offshore Wind Standard. However, when comparing the costs and benefits of Great Lakes Wind to other renewable energy options in the State’s portfolio, the appropriate comparison is to land-based renewables and not offshore wind projects.
Great Lakes Wind does not provide the same electric and reliability benefits that offshore wind offers New York State. The PSC adopted the Offshore Wind Standard “… because of its proximity and direct access to load centers, offshore wind would provide substantial reliability and diversity benefits to the electric system […] It may also produce significant public health benefits by displacing fossil-fired generation in the downstate area.”4 Great Lakes Wind projects would not have the same proximity and direct access to load centers (Zones J and K) or displace downstate fossil-fired generation. Therefore, at the interconnection points of Great Lakes Wind projects in Central and Western New York, the more appropriate cost comparison is with more cost-effective technologies typically sited in that region such as land-based wind and solar.
This white paper finds that Great Lakes Wind projects would be significantly more costly for ratepayers to support than projects currently advanced under Tier 1 of the Clean Energy Standard (CES), such as land-based wind and solar. For example, the 2021 Tier 1 solicitation resulted in Index REC Strike Prices between $42 and $63/MWh, which is 55 to 230 percent cheaper than the $98 to $138/MWh range estimated for Great Lakes Wind projects. Moreover, that cost differential could increase further as the Feasibility Study cost estimates of Great Lakes Wind do not fully account for additional costs associated with interconnection, infrastructure, and labor, which would require site-specific evaluations and more detailed modeling.
The potential grid Points of Interconnection (POIs) identified for Great Lakes Wind in the Feasibility Study are in areas with limited hosting capacity, with competition from other less expensive land-based renewable generation projects which are also advancing in this region. As a result, Great Lakes Wind projects would incur high interconnection costs to advance and would displace lower-cost alternatives.
From an infrastructure perspective, ports around the Great Lakes would need, in some cases, significant upgrades to support the development of these projects, and in-lakes vessels or purpose-built vessels would need to be used for construction and operation. The required ports, vessel infrastructure, and supply chain investments needed to execute Great Lakes Wind were not quantified in the Feasibility Study and would add to the overall cost of Great Lakes Wind.
Substantial public and regulatory concerns have also challenged wind energy projects in and around the Great Lakes, primarily due to anticipated viewshed impacts and implications of the projects on wildlife. Through the public feedback events and webinars, the public expressed a wide range of interest, both in support of and expressing concerns about Great Lakes Wind. Viewshed, environmental, and public health issues are the primary concerns, and job creation and economic development opportunities are the primary arguments supporting Great Lakes Wind. The Feasibility Study demonstrates that the visual impacts of Great Lakes Wind, at least in Lake Erie, would be considerable given the need for a relatively limited distance from shore necessary to support a project at scale in that lake. For example, in Lake Erie, limiting the viewshed impact by siting turbines beyond 12 miles from shore would reduce the potential hosting capacity from 1,600 MW to less than 200 MW and further diminish the economic viability of these projects.
With regards to the impact of Great Lakes Wind on wildlife species and the environment, this issue is exacerbated by the lack of data relating to the temporal and spatial distributions of wildlife both at specific locations and across the Great Lakes as a whole, including data on aerial fauna, fish habitats, benthic communities, and human uses. Further, sediment contamination is widespread but not well mapped to support least impact site identification. And the extent and duration to which Great Lakes Wind development could resuspend or redistribute these contaminants are uncertain. Each of these issues imparts development risks and uncertainties to potential projects. These issues are not necessarily insurmountable, but additional research, data collection, and analysis are warranted to identify areas of lowest risk and support project development certainty.
While the Feasibility Study identifies job and other economic benefits that could arise from Great Lakes Wind development, without the strategic case for Great Lakes Wind as a critical contributor to the Climate Act goals, these benefits alone do not justify the high level of ratepayer cost given the renewable energy alternatives that have already demonstrated their ability to contribute in more beneficial ways. NYSERDA has not identified unique characteristics of Great Lakes Wind that reflect a component otherwise missing in the State’s efforts to achieve the Climate Act goals. The response rate to Tier 1 solicitations indicates an adequate development pipeline in the geographies where Great Lakes Wind could interconnect to and already maximize the contribution from those areas to at least the 70 percent renewables by 2030 target. Without unique characteristics that would set Great Lakes Wind apart from more cost-effective contributors towards the Climate Act goals, the high additional cost is challenging to justify, at least with a view to the 2030 target.
After completing the Feasibility Study and considering these various dimensions collectively, NYSERDA recommends that now is not the right time to prioritize Great Lakes Wind projects in Lake Erie or Lake Ontario.
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