On Tuesday, October 8, 2024, the New York Power Authority (“NYPA”) released its draft 2025 Renewables Strategic Plan (the “Draft Plan”) and invited public comment.
The 2023-24 New York State budget granted NYPA expanded authority to plan and develop renewable energy projects to achieve state decarbonization goals and ensure adequate and reliable power supply in the State. Per the budget enactment, NYPA may issue debt to fund project development and sell the power, energy, ancillary services and RECs produced by the projects it develops. The budget further required that NYPA develop a Renewables Strategic Plan, which will be first issued in 2025 and thereafter updated every two years.
The Draft Plan released this week outlines an initial portfolio of 40 projects in various stages of development across the State, totaling more than 3.5 GW of capacity and comprising solar photovoltaic, onshore wind, and battery energy storage systems (“BESSs”). While the names and developers of the projects described in the Draft Plan are not disclosed, per an analysis released by POLITICO Pro on October 11, roughly 2 GW of the portfolio comprises projects that had previously held contracts with NYSERDA, contracts that were canceled when developers deemed them uneconomic. Additionally, several of the projects identified in the Draft Plan are part of the portfolio affiliated with the Clean Path transmission project, a collaboration between NYPA and private developers that currently holds a Tier 4 contract with NYSERDA to deliver power to New York City but has faced substantial obstacles to development.
Developing with NYPA
In the Draft Plan, NYPA explains that despite having substantial financial advantages in project development due to its high credit ratings and tax-exempt status, NYPA’s status as a creature of statute has other, more complex implications for how it can and cannot develop projects. NYPA’s enabling statute requires NYPA to maintain majority ownership of facilities, meaning that each project in its portfolio is being developed pursuant to a co-development or build-and-transfer ownership scheme in partnership with a private developer.
NYPA has already pre-qualified many developers and investors to co-develop projects more quickly in the future, and it states in the Draft Plan that it is “continuing to engage” with qualified developers to pursue new opportunities on an ongoing basis.
Per the Draft Plan, partnership with NYPA may be most attractive to developers who:
- have capabilities complementary to NYPA’s, especially in development and delivery;
- are flexible about ownership models;
- have limited presence and relationship with stakeholders in New York State;
- want to recycle capital quickly;
- have limited access to affordable capital;
- see potential in long-term partnerships beyond solar photovoltaic project development; and
- have a more extensive project pipeline than they can develop alone.
Next Steps
NYPA has announced five in-person public meetings to be held this November at venues across the State and a virtual public meeting to be held on Zoom. It will accept public comments on the Draft Plan until at least December 6, 2024. The NYPA Board of Trustees will vote to approve the Draft Plan in January 2025.
