Offshore Wind Costs

My biggest concern with Reforming the Energy Vision (REV) is cost and the consequent lack of specific numbers that can be used to compare with alternatives. Consider for example the ambitious plans for New York State to develop offshore wind.

Governor Cuomo’s 2018 State of the State message describes the plan but does not mention cost:

In the 2017 State of the State, Governor Cuomo took the bold step of establishing a target of up to 2.4 gigawatts of offshore wind by 2030, the largest commitment to offshore wind power in U.S. history. To position New York as the leading offshore wind market in the United States and to drive competition, reduce costs and create new well-paying jobs, this year Governor Cuomo is calling for a procurement of at least 800 megawatts of offshore wind power between two solicitations to be issued in 2018 and 2019, resulting in enough clean, renewable energy to power 400,000 New York households. These solicitations will be the first in a set schedule to reach the 2030 target, will create competition among developers to build some of the largest offshore wind projects in the United States, and will ensure that the resulting jobs and economic development benefits accrue across the state.

In addition, Governor Cuomo is directing NYSERDA to invest $15 million in clean energy workforce development and infrastructure advancement to train workers for jobs in this good-paying industry, including offshore wind construction, installation, operation, maintenance, design and associated infrastructure. To attract private investment in port infrastructure and supply chain activities, Governor Cuomo is further directing NYSERDA to work with Empire State Development and other state agencies to determine the most promising public and private offshore wind port infrastructure investments. These new actions will jumpstart project development, drive job growth and industry investments, and secure New York’s status as the undisputed home for the emerging offshore wind industry in the U.S.

The New York State Energy Research and Development Authority (NYSERDA) Frequently Asked Questions about New York State offshore wind document does include the question “What will offshore wind cost?” The response:

New York State is committed to advancing offshore wind in a way that maximizes competitive bidding and ensures the lowest cost, while stimulating economic development and fostering local job creation. With achievement of the 2,400 MW goal contributing to similar scale economies in the U.S. Northeast, NYSERDA projects that by 2030, the cost to obtain offshore wind will be lower than the cost to procure land-based renewables in the State. Offshore wind, therefore, has the potential to lower the cost of meeting the State’s mandate that 50 percent of its electricity come from renewable resources by 2030. To initially develop the offshore wind market in New York, a near-term incremental program cost is estimated to be less than a 0.3 percent bill impact (or less than $0.30 per month) for the typical residential customer for the more cost-effective procurement options.

I am disappointed that there isn’t a response that translates into anything that can be compared to other renewable energy costs. If we parse the last sentence we can try to develop a number. I assume that “To initially develop the offshore wind market in New York” refers to the call for a “procurement of at least 800 megawatts of offshore wind power between two solicitations to be issued in 2018 and 2019”. The dollar amount is cryptically described as “less than a 0.3 percent bill impact (or less than $0.30 per month) for the typical residential customer”.  The NYSERDA Patterns and Trends document lists the total number of residential customers, 5,582,292 in 2015 and Electricity Local states that the average monthly residential electricity bill in New York is $106 so we can estimate that near-term incremental program cost to residential consumers is less than $21,305,842. However, that is not a number that can be used to compare other forms of energy because total costs would be amortized over the lifetime of the project (25 years), this does not include commercial and industrial customers, and it is not clear if this is the all in cost including transmission or just the cost of the offshore turbines.

There is another more complicated cost factor. In the project cost projections task summary in the New York Offshore Wind Master Plan the explanation of that task notes that “The objective of this task is to produce data on the expected costs and levelized cost of energy (LCOE).” Paul Joskow addressed the use of LCOE and “demonstrates that this metric is inappropriate for comparing intermittent generating technologies like wind and solar with dispatchable generating technologies like nuclear, gas combined cycle, and coal.” Read the paper for the full rationale but it basically boils down to the fact that wind is intermittent and cannot be relied upon whenever power is needed. Importantly the analysis also concludes that wind generating technologies are over-valued relative to solar generating technologies.

The bottom line on costs for this program is that there are not any that are available.

Most remarkable to me is this statement: ”With achievement of the 2,400 MW goal contributing to similar scale economies in the U.S. Northeast, NYSERDA projects that by 2030, the cost to obtain offshore wind will be lower than the cost to procure land-based renewables in the State.” The Science of Doom blog evaluated the costs of offshore wind and concluded that “As a rule of thumb consider offshore capex wind costs to be “about double” onshore wind costs, and offshore maintenance costs to be somewhat unknown, but definitely higher than onshore costs”. I can see nothing in that analysis nor am I aware of any other analysis that claims something much different. If I were a betting man I would bet the ranch that the cost to obtain offshore wind will never be less that the cost of land-based renewables.

REV Program: Renewable Heat New York

According the Renewable Heat NY website this program provides incentives toward the installed costs of high-efficiency, low-emission wood heating systems for homeowners and businesses without access to natural gas. The program was announced by Governor Cuomo in his 2014 State of the State address as “a long-term commitment to help the high-efficiency and low-emission biomass heating industry reach scale.”


It appears that this program is primarily funded by auction proceeds from the Regional Greenhouse Gas Initiative. The recent update to the RGGI Operating Plan describes the expected benefits: “reduced GHG emissions relative to oil heat alternatives, increased energy bill savings, and the creation or retention of jobs in New York. The description goes on to state:

The program will reduce New Yorkers’ energy bills while providing significant environmental benefits. Included among these benefits are GHG reductions that stem from the replacement of fossil-fuel heating devices, and public health benefits related to the replacement and recycling of outdoor and indoor wood boilers with advanced technology cord wood boilers and pellet boilers. Renewable Heat NY will also create and retain jobs in New York State’s biomass industry by supporting New York State manufacturers of high-efficiency, low-emission wood heat technologies, and by providing needed training in hydronic biomass heating to qualify contractors and installers for the program.


The update also summarizes the financial commitments and the expected benefits of the program. The total incentive costs are $7.2 million. The net energy benefits are 4,755 mmBtu per year and 95,907 mmBtu over the lifetime of the program. The net greenhouse gas emission reductions are expected to be 413 tons of CO2e annually and 8,263 tons of CO2e over the lifetime of the program. The cost benefit ratio of the emission reductions is 19,301 $ per ton of CO2e.


Clearly this is not an effective GHG emission reduction program. If the REV 80 by 50 goal was dependent upon this program it would fail but it also shows that proponents of the program necessarily have to implement as many programs as possible.