Rising inflation as well as material and labor costs since the project contract was signed in 2021 spurred an appeal by the project's  developers for added state financial support for the transmission line, which was denied. The public-private partnership formed between the developers, NYSERDA and the New York Power Authority to deliver the project was also cancelled.  

The details of the contract's financial arrangements were not disclosed, but the two developers, who are involved in other state energy projects, "remain committed to New York’s energy transition,” says Amy Varghese, a spokeswoman. “As we continue to advance our portfolio of renewable energy projects across the state, we will evaluate solutions for addressing the largest transmission bottlenecks facing New York’s electric grid.”

More than two-thirds of New York onshore renewable power contracts and more than 6 GW of offshore wind were cancelled last year, with state officials previously acknowledging that a 2030 target of 70% clean energy generation, set in its 2019 climate law, will likely have to extend to 2033.

New York Independent System Operator (NYISO) references in its 2024 Reliability Needs Assessment the “growing risks to electric system reliability statewide in 2033.” The projection notes several factors in the state "contributing to projected increases in peak demand over the study horizon, including electrification of transportation and building sectors and large energy-intensive commercial projects that include data centers and chip fabrication.”

State sources and market observers have pointed to new pressures on traditional power sources, including new ozone control mandates that will require upgraded pollution controls for gas-fired peaking plants. NYISO forecasts 1.6 GW of peaking capacity will go offline next year, with smaller gas-fired power plants owned by the New York Power Authority also set to retire. Since the enactment of the state's 2019 Climate Act, New York has retired about 5.2 GW of fossil fuel-fired generation but has installed only 2.25 GW of new renewables as replacement.

“NYSERDA remains committed to engaging with our partners in catalyzing work that advances our Climate Act goals,” says Deanna Cohen, a spokeswoman. 

The remaining major transmission project, the Champlain Hudson Power Express high voltage direct-current line to transmit 1.2 GW of Quebec province hydropower to New York City remains set to finish in 2026, but its power could face a 25% price hike if the next administration levies a threatened tariff on Canadian imports, according to a report in sector publication Recharge.

Wind Projects Still Blowing

Meanwhile in offshore wind development, the U.S. Interior Dept. has fast-tracked a sweeping environmental review of six project leases in the New York Bight wind energy area south of Manhattan, which has more than 7 GW of capacity, aiming to streamline permitting.

But the Attentive Energy project set to be developed there, led by TotalEnergies, has now withdrawn its bid in the state's current fifth round offshore wind procurement and bidders Copenhagen Infrastructure Partners and Orsted have submitted early-stage projects that do not have all federal reviews, with concern they would be slow-walked in the Trump administration. Results of that bid round are set to be announced in early 2025.

Projects in other states also gained key approvals, including one set to generate 2 GW being developed by U.S. Wind Inc. to supply Maryland that would be built nine miles offshore of the state border with Delaware. It includes the muti-phase construction and operation of some 114 wind turbines, up to four offshore substation platforms, a meteorological tower and up to four offshore export cable routes. 

Earlier this year, the 1.5-GW Atlantic Shores offshore wind project set for southern New Jersey gained federal approval to start construction of what would be a 2.6 GW, two-part project owned by Shell New Energies and EDF Renewables.  

“We are paying close attention to the market's reaction and remain steadfast in our support for responsible and prosperous development of offshore wind,” says Paulina O’Connor, executive director of the New Jersey Offshore Wind Alliance.

Interior also announced this month that despite the 2023 cancellation of an offshore wind energy site auction in the Gulf of Mexico due to lack of bidder response, recent “competitive interest” by two developers in a new area off Galveston, Texas, could propel a new auction “as soon as 2026”—if not cancelled or delayed by the incoming administration. 

Market observers point to better prospects for projects set for development approval by Louisiana in shallower state waters, and those that are on slower tracks to be built beyond the four years of the next administration.

Federal approvals for 15 GW of U.S. offshore wind capacity should be enough to sustain development momentum and port investment, claims a a new S&P Global Commodity Insights report. “There's a lot of flux and uncertainty around what's happening or what's going to happen over the next four years, but the previous administration has been very good at creating a robust project pipeline,” said John Murray, senior research analyst.  "That should be “sufficient for the next four years, whatever may come.” 

S&P projects 12 GW in place by 2030 based on already federal permitted capacity that has already been federally permitted and is "state contracted or is likely to be so.”

Port Expansions Ahead

With a lack of U.S. port space available for offshore wind projects either starting or soon to start construction, Murray says coastal marine infrastructure projects will continue to be in demand, particular in the northeast. 

Two ports now under construction are Equinor’s South Brooklyn, N.Y., Marine Commerce Terminal and Salem Offshore Wind Terminal on Massachusetts' North Shore, which Crowley is constructing “in anticipation of a surge in project development following the collapse of previously contracted capacity in 2023,” the S&P report says. Both are set for completion within three years. 

“Beyond 2030, it is projected that the momentum for U.S. offshore wind development will continue, leading to an increased demand for U.S. port space,” S&P notes in a new report.

Confidence in state renewable targets going forward is important, Murray says. Multiple northeast states “remain legally bound or committed through policy to offshore wind and decarbonization of their power grids despite the Trump administration likely letting up on federal targets enacted by Biden,” he says.  

Virginia, with its nation-leading 2.6-GW offshore wind project CVOW on track to open as projected in late 2026, is one of the most confident. 

A giant jacket foundation that will support the first of three transformer substations on that Dominion Energy 176-turbine project—each a 60-meter-tall, 2,445-ton structure—was shipped in recent weeks from a Denmark fabrication area to the Portsmouth, Va., project port installation site. 

“CVOW ... continues to proceed on-time and on-budget, consistent with our previously communicated timing and cost expectations," said Robert M. Blue, Dominion Energy chair, president, and CEO, in a late October announcement finalizing its sale of a 50% project stake to infrastructure investment firm Stonepeak.