Infrastructure Past, Present, and Future Casebook/South Fork Wind Farm

This page is for a case study on the South Fork Wind Farm by Jose Galeano Amaya, Jad Dannoura, and Nikolas Hawley as part of the Infrastructure Past, Present and Future: GOVT 490-003 / CEIE 499-005 Spring 2024 course at George Mason University's Schar School of Policy and Government, and the Volgenau School of Engineering, and Sid and Reva Dewberry Department of Civil, Environmental, and Infrastructure Engineering. Under the instruction of Professor Jonathan L. Gifford.

Summary

A pioneer in offshore wind farm development in the United States is the South Fork Wind Farm. It is located about 35 miles to the east of New York's Montauk Point. Eversource Energy and Ørsted collaborated to provide clean, renewable energy to Long Island. With about 12 turbines, it will produce enough electricity to run about 70,000 households. New York State's efforts to minimize greenhouse gas emissions through renewable energy and a reduced reliance on fossil fuels are further aided by the initiative. The Bureau of Ocean Energy Management (BOEM), has approved South Fork, which is also known for emphasizing preservation of the environment, sustainability, and employment creation in the community. Numerous local stakeholders, particularly those involved in environmental protection and the fishing sector, have been consulted and studied in great detail regarding its possible ecological effects.The South Fork Wind Farm now generates approximately 130 megawatts of renewable energy, sufficient to power around 70,000 homes, contributing significantly to New York's clean energy goals.

Timeline of Events

• August 18, 2011: BOEM published a "Call for Information and Nominations for Commercial Leasing for Wind Power on the OCS Offshore Rhode Island and Massachusetts" in the Federal Register so that interest in a project could be measured.
• On July 31, 2013: BOEM auctioned two leases for North Lease Area (Lease OCS-A0486) and the South Lease Area (Lease OCS-A0487), that were won by Deepwater Wind.
• 2017: The Long Island Power Authority (LIPA) Board of Trustees approved the South Fork Wind project, marking the beginning of its development phase.
• June 29, 2018: South Fork Wind, LLC submitted its Construction and Operations Plan (COP) to the Bureau of Ocean Energy Management (BOEM) for review.
• 2019: Deepwater Wind is acquired by Ørsted.
• January 16, 2020: Deepwater Wind submits an application to assign 13,700 acres of OCS-A 0486 to Deepwater Wind South Fork, LLC.
• March 23, 2020: BOEM approved the new assignment of the lease with a new lease number number OCS-A 0517.
• November 24, 2021: The U.S. Department of the Interior’s BOEM issued the Record of Decision (ROD), completing the federal environmental review and granting approval for the project to proceed.
• January 18, 2022: BOEM approved the Construction and Operations Plan for the South Fork Wind Farm and South Fork Export Cable Project, allowing construction to commence.
• February 2022: Onshore construction began, starting with the installation of the underground transmission line that would connect the offshore wind farm to the Long Island electric grid.
• June 2023: The project reached its "steel in the water" milestone with the installation of the first monopile foundation, marking significant progress in offshore construction.
• February 2024: The final turbine was installed, completing the offshore construction phase of the wind farm.
• February 13, 2024:Eversource Energy announces sale of sell their fifty-percent ownership of the South Fork Wind Farms to Global Infrastructure Partners (GIP).
• March 14, 2024: Governor Kathy Hochul, alongside U.S. Secretary of the Interior Deb Haaland, announced the completion of the South Fork Wind project. All 12 turbines were constructed and the wind farm began delivering power to Long Island and the Rockaways, marking it as America's first utility-scale offshore wind farm.

List of Actors

Developers & Partners:

Deepwater Wind: A predecessor to Ørsted in the development of the South Fork Wind Farm.

Ørsted: A global leader in renewable energy, Ørsted co-developed the South Fork Wind Farm.

Eversource Energy: A New England-based energy company that partnered with Ørsted in the development of the wind farm.

Global Infrastructure Partners (GIP): An infrastructure investor that purchased the stake that Eversource Energy had in South Fork Wind Farm.

Key individuals:

Governor Kathy Hochul: The Governor of New York, who announced the completion of the South Fork Wind project and emphasized its significance in advancing the state's clean energy goals.

Secretary Deb Haaland - The U.S. Secretary of the Interior, who participated in the announcement of the project's completion, highlighting its role in the nation's renewable energy efforts.

Stakeholders:

Long Island Power Authority (LIPA): The utility company serving Long Island, which approved the project and will distribute the generated electricity to local consumers.

Government agencies:

Bureau of Ocean Energy Management (BOEM): A division of the U.S. Department of the Interior responsible for managing offshore energy resources. BOEM approved the Construction and Operations Plan for the South Fork Wind Farm.

United States Department of the Interior: An executive department of the U.S. federal government that is in charge of the nation's natural resources and cultural heritage.

Funding and Financing

The construction of the South Fork Wind Farm project was funded through a private joint venture between Ørsted and Eversource Energy; originally the ownership of the South Fork Wind Farm was divided fifty-fifty between Ørsted and Eversource Energy. On February 13, 2024, Eversource Energy announced the execution of a definitive agreement to sell their fifty-percent ownership of the South Fork Wind Farms to Global Infrastructure Partners (GIP). The South Fork Wind Farm also received a Power Purchase Agreement (PPA) from the Long Island Power Authority, for the original 90 megawatts project, which was later updated to include an additional 40 megawatts.

Institutional Arrangement

The Outer Continental Shelf Lands Act (OCSLA) defines outer continental shelves (OCS) as all submerged lands lying 3 miles offshore and requires the Secretary of the Interior to be responsible for their development. The United States Department of the Interior through its Bureau of Ocean Energy Management (BOEM) provides development of the OCS through leases that are awarded to renewable energy projects. On August 18, 2011, the BOEM published a "Call for Information and Nominations for Commercial Leasing for Wind Power on the OCS Offshore Rhode Island and Massachusetts" to measure interest in the development of the area and received eight commercial indications of interest; which included Deepwater Wind, the company that would ultimately win the leased area. Deepwater Wind would be bought by Ørsted in 2019 through an agreement with the D.E. Shaw Group for a purchase price of 510 million USD; which provided the offshore wind development project to Ørsted, that project would become the South Fork Wind Farm. On January 18, 2022, the BOEM would approve the construction, and operations plan of South Fork Wind Farm; construction would begin that same month and end in March 2024.

Narrative of the Case

A growing demand for renewable energy production in the United States highlights a shift in the consumption of energy and the future of energy production in America. At the federal level, the U.S. Department of the Interior has joined a government-wide commitment to deploy 30 gigawatts (30000 megawatts) of offshore wind by 2030; which can be aided by the Bureau of Ocean Energy Management. At the state level, New York is hoping to achieve 9,000 megawatts of wind energy by 2035; as a way to transition into a zero-emission electric grid. The South Fork Wind Farm as infrastructure assists the achievement of these goals, as an offshore wind farm that provides 130 megawatts of energy to areas in New York. Its construction as a private joint venture demonstrates the role of corporations in the creation and maintenance of infrastructure in the U.S. The corporations in this case provided their expertise in the creation of the South Fork Wind Farm, Ørsted as a leader in offshore wind power having 30 years of experience, operating and developing projects that account for approximately 2,800 megawatts of offshore wind energy and investing 20 billion USD in offshore projects in America. The change of ownership also demonstrates another feature of corporations working on infrastructure, that actors can sell their stake to other corporations; Eversource Energy selling its stake to GIP.  

Policy Issues

Bureaucratic Process: The process of obtaining the lease to an area and the necessary procedures that are required before the lease is able to be built upon, can impede a project and decrease the efficiency of it. As the timeline shows, the process of obtaining the approval to start construction of a project can take a lot of time.  

Environmental Impact: Building in outer continental shelves can harm the area, which makes the bureaucratic process a necessity to avoid the destruction of habitats in the area. This act of balancing environmental protections and construction of important infrastructure is one that heavily depends on the government.  

Private Corporations: The South Fork Wind Farm demonstrates that private corporations can take all the risk in the construction and maintenance of infrastructure. Yet, this creates a variety of issues such as those of ownership, accountability, and sustainability.  

Takeaways

The amount of bureaucracy that is present in the planning and construction of infrastructure in federal land, demonstrates the importance of the executive branch and demonstrates that a balance is needed between bureaucratic processes and the construction of infrastructure.

Discussion Questions

Does the environmental and economical benefit of the South Fork Wind Farm outweigh the potential ecological impacts and concerns raised by local communities and industries such as commercial fishing?

Is the investment in offshore wind farms, like the South Fork Wind Farm, a better use of funds than investing in other renewable energy sources such as solar or onshore wind?

What can the United States learn from other nations that are familiar with the creation and maintenance of offshore wind farms and can the current bureaucratic process be accelerated?

Additional Readings

Environmental licensing for offshore wind farms: Guidelines and policy implications for new markets

Licensing for offshore wind farms

Levelized Costs of New Generation Resources in the Annual Energy

Costs of new generation resources

United States Environmental Protection Agency South Fork Wind LLC Fact Sheet

EPA Fact Sheet (section 3 and 4)