New York issues solicitation for RECs from existing in-state resources

by Peter Maloney
APPA News
January 26, 2021

New York State on Friday launched a renewable energy procurement program aimed at retaining existing in-state renewable energy resources.

The Competitive Tier 2 program, administered by the New York State Energy Research and Development Authority (NYSERDA), aims to ensure the state’s existing baseline renewable energy generation is retained through three annual solicitations.

In the solicitation, issued Friday, NYSERDA is seeking proposals from existing privately owned hydropower and land-based wind generators in New York State that entered commercial operation prior to Jan. 1, 2015.

Owners of renewable energy facilities participating in the solicitation must bid a fixed renewable energy credit (REC) price in RECs per megawatt hour (MWh) and bid quantity in annual MWh.

There is no minimum bid quantity. There are no penalties for under delivery of Tier 2 RECs, but under delivery cannot be made up in subsequent years. And RECs cannot be carried over from year to year.

Facilities selected via the solicitation will receive a three-year contract from NYSERDA and will retain ownership and all rights to RECs generated that exceed the state’s annual REC cap.

In the solicitation, NYSERDA will use a maximum acceptable bid price to target an unquantified majority of the available Tier 2 supply in each RFP. In order to preserve the competitiveness of the solicitation, NYSERDA is keeping both the maximum acceptable bid price and the target volume of RECs confidential.

The Competitive Tier 2 program is funded through Tier 2 renewable energy credits (REC) load serving entities in New York State are required to purchase from NYSERDA each year.

In October, a New York State Public Service Commission order directed NYSERDA to create the competitive Tier 2 program as part of an expansion of the state’s Clean Energy Standard refocusing New York’s existing regulatory and procurement structure on achieving the goals laid out in the Climate Leadership and Community Protection Act (CLCPA).

New York recently expanded its Clean Energy Standard, advancing Democratic Gov. Andrew Cuomo’s goal of obtaining 70 percent of the state’s electricity from renewable sources by 2030 as mandated in the Climate Leadership and (CLCPA).

The program is designed to work in parallel with NYSERDA’s other solicitations for new large-scale land-based and offshore wind projects.

In July, New York announced a solicitation seeking up to 2,500 megawatts (MW) of offshore wind energy. The solicitation also includes a requirement for offshore wind generators to partner with any of 11 prequalified New York ports to stage, construct, manufacture key infrastructure components to support offshore wind power development. Funding for the port investments includes $400 million in public and private funding.

Cuomo’s office said the solicitation has the potential to bring New York State halfway to its goal of having 9,000 MW of offshore wind in operation by 2035, as called for in the Climate Leadership and Community Protection Act.

At the same time, Cuomo also announced solicitations, coordinated by NYSERDA and the New York Power Authority (NYPA), for 1,500 MW of energy from large land-based renewable energy projects.

Regarding the recently released solicitation, NYSERDA said it would evaluate the Competitive Tier 2 proposals based on the lowest price received. Proposals are due on Feb. 24, 2021 by 3:00 p.m. NYSERDA expects to announce the winner of the solicitation in the second quarter.

Interested proposers can apply online. A webinar scheduled for Jan. 26, will provide interested parties with more information.