Overview
We supported the New York State Energy Research and Development Authority (NYSERDA) in designing an inflation adjustment mechanism for its fifth large-scale offshore wind solicitation. This was to address concerns over developer defaults caused by rising costs.
Our offshore wind solicitation support included:
• Contributing to a Request for Information (RfI) to gather stakeholder feedback,
• Recommending appropriate commodity indices, weightings, and cost of capital assumptions,
• Developing an indexing algorithm and advising on key adjustment milestones, and
• Supporting the drafting of a Request for Proposal (RfP) incorporating the final indexing approach.
Key challenges
- Need to accurately track relevant commodity price changes over time
- Reflecting real project cost exposure without overcompensating
- Alignment with NYSERDA’s policy and procurement timelines, and
- Getting buy-in from a broad group of stakeholders with varying interests.
Key impact
- Provided structured offshore wind solicitation support way to adjust offshore wind strike prices in line with actual market conditions
- Significantly reduced the risk of future project defaults
- Set a precedent for future solicitations
BVGA team
Alun Roberts
