The Blog - Wind energy market analysis

Posted 13/11/2018

Frances Salter

    

We talk to Sive, Paget & Riesel’s Dan Chorost on the growth of the US offshore wind industry

Dan Chorost, principal at environmental law firm Sive, Paget & Riesel, and member of A Word About Wind, has been supporting on the early growth of the US offshore wind sector. He discusses progress so far and New York's recent masterplan.

New York offshore wind

How do you see the American offshore wind market progressing?

Rapidly! The northeastern part of the United States is one of the hottest areas in the world right now for offshore wind development.

The country’s first offshore wind farm [the 30MW Block Island] is off the coast of Rhode Island, and that project demonstrated that offshore wind could be a reality here. New York, Massachusetts, and New Jersey now all have aggressive offshore wind energy goals and are leading the way, so there’s a lot of activity here.

In early November 2018, we saw two major developments affecting the market, particularly for the northeast. New York State released the first of several anticipated RFPs [requests for proposals] for the procurement of 800MW or more of offshore wind energy, which the industry has been waiting for.

Plus, the federal government has recently approved Ørsted’s acquisition of Deepwater Wind, which is going to change the landscape here quite a bit. Deepwater established itself as a leader in the northeast, and I expect we will see some more consolidation of the industry as the market here begins to mature.

 

You were involved in the New York State Master Plan – could you tell us more about that?

That’s right. My firm has been serving as environmental counsel to NYSERDA [New York State Energy Research & Development Authority] and we were thrilled to assist with the New York State Offshore Wind Master Plan and its twenty attached studies. 

We also worked on the environmental impact statement for the procurement that has just been released. These plans, procurements, and studies lay out the state’s path for reaching its offshore wind energy goals, which include the development of 2.4GW for New York by 2030.

Just before the master plan was released to the public, New York formally requested that the federal government identify and lease additional offshore areas off of Long Island. It appears that those new lease areas will be identified and leased sometime next year. Having new lease opportunities will help the state to achieve its offshore wind development goals.

 

What are the main legal challenges you’ve encountered in the American market?

Permitting and litigation risk. Offshore wind farms are extremely complicated projects to have permitted in the US – particularly because we have multiple jurisdictions which overlap at times, and permitting a project might require approvals from as many as twenty federal, state and local agencies.

As a developer, you need to be able to navigate not only each agency approval process, but also each corresponding public comment or stakeholder process. Each of these brings value, but also challenges.

We also have a much more litigious environment than what is typically found in Europe. Permitting and developing major infrastructure projects in and around New York State is my firm’s bread and butter work, and almost all of those projects have threatened or actual litigation. So those are facts that need to be considered and anticipated from the first day of any major project here.

 

Why do you think it’s a more litigious market?

 There are a lot of reasons, from having a system based on common law, to how losses are allocated, to how enforcement and balances of power are viewed. For better or for worse, it’s the reality in which we operate.

 

Which trends do you think will affect the sector most in the next few years?

 Primarily technological trends. Turbine manufacturers continues to innovate and improve technology. We expect floating turbines to reach market within a few years; and standard fixed turbines generally are getting larger, more powerful, and more cost effective.

From an environmental law perspective, those changes will influence how you site a project, and what the visual and other impacts might be.

Also, we will need all manner of new infrastructure, which will be a challenge for the northeastern US. Our waterfront areas, particularly around New York City, are highly developed, so it’s not easy to find hundred-acre sites where you can drop down, for example, a portside turbine pre-assembly facility like the ones that exist in Europe. We’ll be breaking up some of those necessary facilities into smaller pieces so they can be shoehorned into our map, which will be a challenge for European developers and manufacturers to adapt to.

 

In your own career, which have been the most important lessons?

 What I have learned from working on major projects is that you have to go through the process the right way and make sure that no corners are cut, that analyses are not missed, and that impacts are disclosed. 

You should plan on someone suing to stop your project, so you must be prepared to defend the technical analyses that underlie environmental permitting. Every large developer around New York knows that if you go through the process the correct way, your project will end up moving more quickly, not only through the regulatory process, but also through any litigation that may come.

Want to learn more about US offshore? Our annual conference, Financing Wind North America, is happening on 24th-25th April 2019.

Find out more about Financing Wind

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