Dozens of contracts for New York renewable energy projects totaling more than 8 GW of capacity have been canceled as developers scramble to exit unprofitable deals and rebid at higher cost to ratepayers.

The trade association representing renewable energy developers in New York, ACE NY, said Jan. 4 that 73 land-based projects with a combined 6,784 MW nameplate capacity had canceled or rejected contracts with the state in recent weeks.

A day later, the New York State Energy Research and Development Authority (NYSERDA) placed the total slightly higher: 79 projects.

Mass cancellations had been expected. The question was how many projects would pull out of New York’s pipeline and how many would attempt to bid back in at higher cost.

In June, developers of 86 land-based and four offshore projects totaling more than 12 GW told the state they could not begin construction without increased compensation because their costs had skyrocketed as they worked through the yearslong permitting and review processes.

The state Public Service Commission in October rejected their petition. (See NY Rejects Inflation Adjustment for Renewable Projects.)

Since then, NYSERDA — which had endorsed the projects’ request for more money — has been scrambling to perform damage control.

It has launched expedited onshore and offshore renewable solicitations and is allowing developers with existing contracts to rebid those projects into the new solicitations. (See New York Issues Expedited Renewable Energy Solicitations.) But they must cancel their existing contracts before rebidding.

A NYSERDA spokesperson said Jan. 5 that cancellation of contracts does not mean cancellation of projects: “While the developers of these projects may have terminated their contracts with NYSERDA, most continue to develop the projects and are expected to seek new agreements in current and future NYSERDA solicitations. NYSERDA remains optimistic that many projects with recently canceled awards and terminated contracts will bid into the open solicitation, ensuring New York consumers are getting the best deal and the state can continue apace towards reaching its nation-leading Climate Act goals.” Bid proposals are due Jan. 31, with awards expected in April.

Along with the onshore projects, plans for New York offshore wind farms totaling 4,230 MW are in danger.

The offshore wind sector has been particularly hard-hit by inflation and interest rate hikes, with contract or project cancellations in Connecticut, Massachusetts and New Jersey in 2023.

On Jan. 3, developers announced cancellation of the single largest renewable project under state contract — the 1,260 MW Empire Wind 2. They hinted but did not confirm they would seek to rebid the proposed wind farm into the expedited offshore solicitation now underway. (See Empire Wind 2 Cancels OSW Agreement with New York.)

Empire Wind and the 73 onshore projects cited by ACE NY total 8,044 MW. They are a critical portion of the portfolio the state is counting on to meet its legally mandated goal of 70% renewable energy by 2030.

For comparison’s sake, New York’s late-2023 contract announcement — which leaders called the largest-ever investment in renewable energy by a state — totaled 6,400 MW. (See NY Announces Renewable Energy Projects Totaling 6.4 GW.) And those were provisional contracts subject to negotiation, not final awards.

Specific details for the 252 large-scale renewable projects reported by NYSERDA from 2004 to Dec. 21, 2023, are listed on the state’s open-data portal: Fifty-six projects with a combined 4,250 MW capacity are listed as “canceled”; 51 rated at 4,376 MW are “canceled, subject to providing replacement contract security”; 65 rated at 1,817 MW are “completed”; 44 rated at 1,034 MW are “operational”; and 36 rated at 6,868 MW are “under development.”

The database does not reflect the most recent changes, however: Empire Wind 2 and its 1,260 MW still are listed as “under development.”

The developments tie in neatly with the timetable by which many policy and spending decisions are made in New York state.

Gov. Kathy Hochul (D) has begun to preview her priorities for the coming legislative season and will deliver more details Jan. 9 in her State of the State address. She and legislative leaders will bake these priorities into their budget proposals, and advocates and lobbyists of all stripes will fight for and against each one as a final budget is negotiated.

The Alliance for Clean Energy New York will be out front on energy issues. On Jan. 4, the trade and advocacy association presented its priorities for the legislative session as it reported the 73 contract cancellations.

“The clear priority for 2024 is for New York to award new contracts for wind and solar projects to replace those that were just canceled due to inflation,” ACE NY Executive Director Anne Reynolds said in a news release. “This market reset is critical for a re-start of renewable energy progress; to avoid the permanent cancellation of 73 projects; and to make progress towards our climate goals.”

The major legislative priority, she added, will be passage of the Omnibus Renewable Energy Progress Act.