NYS Reopens Bidding For Offshore Wind Projects Amid Cost Concerns
After renewable energy developers threatened to stop building billions of dollars of offshore wind energy projects due to the high construction cost, the governor and NYSERDA issued a new RFP allowing developers to rebid the projects. The rebidding process starts Thursday, November 30th.
"We strongly support the development of new renewable energy systems; these projects must be completed. The offshore wind projects being rebid stand to supply enough power for roughly 2.5 million homes, which will make a real dent in New York's emission rates", said Brian Sampson, President of Associated Builders & Contractors Empire State Chapter."However, before these projects are rebid, our leaders in New York must address the original problem: high construction costs. To do this, they must remove the provisions requiring prevailing wages to be paid. Prevailing wage mandates add 15-25% to the cost of construction depending on the trade and region the work is in."
The Columbia University's Center for Urban Real Estate released a white paper, The Complex Worlds of New York Prevailing Wage, which highlights the downfalls of New York's prevailing wage laws. Mainly, it focuses on how prevailing wage mandates increase the construction cost by up to 30%, leading to fewer projects because work is too expensive.
The Empire Center for Public Policy also released a study on the impact of prevailing wage titled "Prevailing Waste." That study concluded that prevailing wage mandates drive up total construction costs by 13% to 20%, depending on the region.
The state must reach its renewable energy goals, and the developers of these projects have made it clear that something needs to be done to address the construction industry's affordability crisis. The good news is that there is a straightforward solution: repeal the mandate of prevailing wage on renewable energy projects and reduce the cost of all taxpayer-funded renewable projects by 10-30%. That way, the state can reach its renewable goals without forcing taxpayers to pay more for these projects.