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Later this year, New York is set to begin soliciting proposals for the development of at least 800 MW of offshore wind capacity, in keeping with the ‘master plan’ it has developed to establish 2,400 MW of offshore wind energy by 2030. The New York State Energy Research and Development Authority’s (NYSERDA) report is a “comprehensive” guide that includes analysis of the environmental, maritime, economic, and social issues of such development, along with costs and barriers. The analysis of procurement options includes utility-owned generation, which represents “an alternative form of hedged procurement that would benefit from the low costs of capital that would be available through rate-basing utility investments,” the paper noted. Offshore wind developers would develop, design, build and potentially operate offshore wind facilities, whose ownership would transfer to a utility upon completion. The paper also identified bundled power purchase agreement methods as providing a hedge against commodity electricity price risk, which could thus unlock “significant reductions” in project cost of finance.
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