NYPA pulls plug on Great Lakes offshore wind project

Tue Sep 27, 2011 4:41pm EDT

(Reuters) - The state-owned New York Power Authority (NYPA) said on Tuesday it had ended the proposed Great Lakes Offshore Wind Project due to high costs and the weak economy.

Development of a 150-megawatt Great Lakes project would have resulted in an estimated annual subsidy of between $60 million and $100 million, NYPA said in a statement.

"It would not be fiscally prudent for the Power Authority to commit to the initiative," the statement said.

NYPA said it was still participating in other efforts by regional groups along the Great Lakes and in the Long Island-New York City Offshore Wind Project.

On Long Island, NYPA is working with New York power company Consolidated Edison and state-owned Long Island Power Authority (LIPA) to develop a 350 to 700 MW project.

One megawatt powers about 1,000 New York homes.

Earlier this month, NYPA, LIPA and Con Edison sought a lease from federal regulators for the undersea land needed to build the Long Island offshore wind farm.

The primary difference between the Great Lakes and Long Island projects was the participation of multiple utilities in the Long Island project, NYPA said.

NYPA also noted the location of the Long Island project near the heavily populated New York metropolitan area, which has some of the highest power prices in the United States.

NYPA said it had received responses to its requests for proposals on the Great Lakes project from Apex Offshore Wind LLC, Great Winds LLC, NRG Energy's Bluewater Wind Great Lakes LLC, Pattern Renewables Development Co LLC and RES Americas Developments Inc.

It said the Great Lakes wind farm was technically feasible but the generating output of the proposed 120 to 500 MW project would have cost two to four times more than land-based wind.

New York has a renewable portfolio standard requiring that 30 percent of energy come from renewable sources by 2015.

To meet that goal, NYPA said the state has committed $872 million in support of the development of about 1,870 MW of new renewable capacity and plans to award another $1.85 billion through 2015 to help fund additional projects.

(Reporting by Scott DiSavino in New York; Editing by Dale Hudson)