This blog looks into the impact that off-shore wind development in NYISO has on gas-fired generation facilities and their net energy revenues.
The recent approval of CLCPA’s minimum statewide offshore wind goal and NYSERDA’s authority to procure offshore renewable energy credits (ORECs) puts renewables at the forefront of NYISOs market development. NYSERDA will procure upwards of 750 MW offshore wind capacity each year for the next 6 years, which will shift the future outlook for gas-fired generators. Offshore wind integration changes the characteristics of CCGT dispatch in certain NYISO zones, highlighting the value in the technology’s flexibility and heavy price implications through the market.
The Boardwalk Offshore Wind and Beacon Offshore Wind Project that were recently awarded OREC contracts are just the start of the lofty 9 GW offshore wind target. A handful of other OSW projects are in NYISO’s generation queue with in-service dates slated for the next few years. Based on Eversource’s 10Q filing and our knowledge regarding logistics and permitting, ESAI has produced highly accurate forecasts for near-term online dates, and long-term expectations for the next round of offshore wind solicitations and beyond.
As off-shore wind increases in the market, CCGTs energy net revenues are likely to decrease. Revenues will fluctuate in the next few years and begin to see a steady decline in 2026 across Zones G, J, and K as off-shore wind penetrates the market. Increased offshore wind generation forces CCGTs in Zone J and Zone K to cycle more often, resulting in more starts and less energy revenues. A variety of factors, such as transmission constraints and stronger demand, will drive tight spreads between Zone J and K, and bolster Zone G for a premium.
We’ve recently launched our Renewables Watch Quarterly report which takes a deep dive into the Renewables markets in PJM, NYISO, and ISO-NE, including RECs forecasts out to 2030. For more information and specific price data, email Tom Bausemer on firstname.lastname@example.org or check out ESAI’s Free Trial Service here: ESAI Power Free Trial.