The New York Power Authority on Wednesday said it would apply with federal regulators for a lease to build one of the nation's first offshore wind power
projects in the Atlantic Ocean, off Long Island.
The wind group wants to build a 350 to 700 megawatt wind farm by 2016, the NYPA, which would hold the lease, said in a release.
NYPA said the proposed wind farm would help the city and state meet tough renewable energy goals and reduce carbon emissions in its fight against global warming, but could not say how much the project would cost.
The company estimated the cost just to upgrade the transmission system to support a wind farm alone would cost about $415 million for a 350-MW project, or $821 million for a 700-MW project, NYPA spokeswoman Connie Cullen told Reuters in an email.
There are currently no offshore wind farms in the United States in part because it costs about twice as much to build offshore than on land. There are however several U.S. offshore wind farms under development, see FACTBOX [ID:nN30249210]
The Long Island Power Authority, one of the members of the wind group, killed plans to build a 140-MW offshore wind farm in 2007 because the project's cost estimates soared to about $811 million from an initial bid of about $356 million.
Industry sources estimate it would cost about $4 million per megawatt to build wind turbines offshore versus less than $2 million a megawatt on shore.
In addition to the state-owned NYPA and LIPA, the wind group includes New York City's power company Consolidated Edison Inc (ED.N), the City of New York, and other state and city government agencies.
NYPA said it will apply with the Federal Bureau of Ocean Energy Management, Regulation and Enforcement (BOE), formerly known as the Minerals Management Service (MMS), for a 25-year lease on 64,500 acres of land beneath the Atlantic Ocean about 13 to 15 miles off the Long Island coast.
Offshore property within the first three miles of the coast falls within a state's jurisdiction. Federal jurisdiction extends from three miles to 200 miles offshore. BOE is the bureau within the U.S. Department of Interior responsible for granting leases for offshore facilities on the Outer Continental Shelf.
NYPA said the wind group would negotiate with BOE over annual rent for the project during development and construction, expected to be about $3 an acre, or about $200,000 a year. Once the project is operating, NYPA said BOE would receive a portion of the revenue generated from energy sales as payment for the lease.
(Reporting by Scott DiSavino; Editing by Sofina Mirza-Reid
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