Three NY offshore wind projects unravel after GE scraps turbine plans

A month ago, officials in New York celebrated the completion of South Fork Wind, the first utility-scale offshore wind farm to operate in the state — and nationwide. The milestone marked what they hoped would be a fresh start after a year of setbacks and disappointments for the industry, not just in New York but across the Eastern Seaboard.

But the emerging offshore wind sector hasn’t escaped the tumult just yet.

Late last week, New York declined to award final contracts to three major projects, citing an ​“inability to come to terms” with developers after their wind-turbine supplier, GE Vernova, changed its manufacturing plans. The proposed offshore wind farms represented 4,000 megawatts (4 gigawatts) of total clean-energy capacity and a large portion of the state’s ambitions to install 9 GW of offshore wind by 2035.

The New York State Energy Research and Development Authority (NYSERDA) said it will look to open another competitive bidding round to fill the hole created by the latest cancellation. The state successfully salvaged two previously endangered projects earlier this year through a fast-tracked auction process — the 924 MW Sunrise Wind project and the 816 MW Empire Wind 1 project — albeit at much higher power prices.

“Amidst the evolving challenges faced by the offshore wind industry, NYSERDA is continuing to take proactive measures to respond to and address these issues head-on,” the state authority said in a news release. ​“These next steps will be announced in the near future.”

The development is the latest cause for whiplash in an industry that seems to be constantly making and reversing progress all at once.

Offshore wind is considered crucial to the nation’s efforts to replace fossil-fuel power plants and meet rising electricity demand from big data centers and electrified buildings and vehicles. That’s especially true for densely populated areas and coastal cities with large power needs and little available land for sprawling energy projects.

New York’s offshore wind aspirations are among the most ambitious in the country — and key to complying with the state’s climate law, which mandates a carbon-free grid by 2040. With the 132 MW South Fork Wind now online near Long Island, the state is less than 2 percent of the way toward meeting its target.

Which way’s the wind blowing? 

One of NYSERDA’s main roles in driving offshore wind development is to procure ​“credits” from projects representing every megawatt-hour of clean electricity that will be delivered to the grid. Developers can’t finance their large, multibillion-dollar wind farms without first securing contracts from state agencies or utilities promising to buy the power once the turbines start spinning.

To that end, in October 2023, NYSERDA provisionally awarded contracts to the three new offshore wind farms: the 1.4 GW Attentive Energy One development, the 1.3 GW Community Offshore Wind farm, and the 1.3 GW Excelsior Wind project. In the same announcement, NYSERDA provisionally awarded $300 million in state grant funding to GE Vernova and LM Wind Power to manufacture offshore wind turbine components near Albany, New York.

Around that time last year, other offshore wind projects in later stages of development — in New York and along the East Coast — were facing cancellations or serious delays due to broader financial and logistical hurdles. So when NYSERDA’s leaders discussed the provisional awards, they struck a note of reassurance for the embattled industry.

“You can count on us to not only handle the challenges facing the existing industry, but also to keep the industry moving forward,” Doreen Harris, president and CEO of NYSERDA, said in mid-November.

Ultimately, the three new projects faced challenges of their own.

The project developers had all planned to use GE Vernova’s new 18 MW offshore wind turbine — one of the most powerful turbine sizes ever made. The larger the turbine, the fewer a company needs to install. In their bids to NYSERDA, the developers based the potential project costs and environmental impacts on deploying this specific turbine.

But GE Vernova, a spinoff of General Electric, later scrapped its plans for an 18 MW turbine, instead deciding to pivot to a 15.5–16.5 MW platform. Last week, NYSERDA said because that revision ​“caused material changes to projects,” the authority would conclude the process kicked off in October without making any final awards — to wind projects or to manufacturers. The $300 million in grant funding will be made available through a future competitive bidding process.

“NYSERDA’s decision is warranted given GE Vernova’s failure to follow through on their commitment to deliver an 18MW machine,” a spokesperson for Vineyard Offshore, the developer of Excelsior Wind, said in an emailed statement. ​“While this latest development is unfortunate, Vineyard Offshore looks forward to working with the [Governor Kathy] Hochul Administration and NYSERDA to advance the next solicitation process in NY.”

Community Offshore Wind similarly expressed disappointment with GE and vowed to stay the course. ​“Our commitment to offshore wind in the region is unchanged,” a representative said by email.

For its part, Boston-based GE Vernova said it ​“is committed to working with all public and private stakeholders to support the next chapter of offshore wind in New York and beyond.” The manufacturer’s existing Haliade ​“workhorse” wind turbine platform is ​“based on a proven technology that will benefit generations to come,” a spokesperson said on Monday.

Recent remarks from an executive at Vestas Wind Systems shed additional light on the challenge of sizing up turbines.

“We’ve sort of got stuck in a technology arms race, or at least the [turbine] generator-size arms race, where every other year we will push out new products,” Morten Dyrholm, a group senior vice president for the Danish turbine manufacturer, said during an April 16 panel at the BNEF Summit in New York. (Vestas’ largest offshore wind turbine is 15 MW.)

“It’s really time to industrialize and standardize our supply chains and our products” for offshore turbines, just as the company has done for land-based wind turbines, Dyrholm said. ​“In the U.S. alone,” he added, ​“we have 1,200 suppliers for onshore [turbine] factories. If we were to go out tomorrow and change their entire setup, that adds costs and adds time and complexity. And that’s not what we need right now.”

Harris, the CEO of NYSERDA, spoke on the same panel, just days before her agency publicly announced the latest project cancellations. She said that her agency remains ​“clear-eyed” about the challenges facing the broader industry, including lengthy construction delays and rising project costs that are ultimately borne by the state’s electricity customers.

“This industry is one [whose] story is still being written,” Harris said.

Note: This article was updated to include comments from a GE Vernova spokesperson. 

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