New York Re-Ups Two in Jeopardy Wind Farms in Fourth Solicitation
![New York offshore wind farms](/media/images/article/Photos/Windfarms/Generic-wind-farm-BP.c8ff90.jpg)
New York State announced the results of its fourth, expedited offshore wind solicitation, which was used as a vehicle to stabilize two in-jeopardy wind farm projects and reinvigorate the state’s efforts after the financial headwinds threatened the industry in 2023. The state conditionally awarded Empire Wind 1 and Sunrise Wind agreements clearing the way for the projects to negotiate new power agreements. A third project, Community Offshore Wind II, was also “waitlisted” with consideration for later contract negotiations.
New York Governor Kathy Hochul highlights that these are two mature projects that have already cleared most of the permitting milestones and can move forward quickly. The projects total over 1.7 GW of electricity, which the Governor said will be the largest power generation projects in New York State in over 35 years once they are in operation in 2026.
Inflation, rising costs, supply chain problems, and challenges due to the lack of installation vessels, combined to place the projects in danger. Empire Wind, which was to be developed in a partnership between Ørsted and Eversource, and Sunrise Wind, which was to be developed by the Equinor and BP partnership, both petitioned NYSERDA (New York State Energy Research and Development Authority) to reset their 2019 offtake contracts. Both projects had been selected in New York’s first solicitation but argued four years later that market conditions made them not financially viable.
NYSERDA rejected the proposal but the Governor then moved to the accelerated solicitation which contained a provision that projects could re-bid if they canceled their earlier contracts. Doreen Harris, President and CEO of NYSERDA, highlighted today the rapid response to market challenges by executing the expedited solicitation.
The companies have also realigned for their forward plans. Ørsted agreed to buy out Eversource if the bid was successful and they completed a new power agreement. Equinor and BP agreed to split their portfolio with Equinor having taken full ownership of Sunrise Wind.
Beyond restarting the two projects, NYSERDA also waitlisted the proposal from RWE and National Grid Ventures for the second stage of their wind farm in the New York Bight. Known as Community Offshore Wind II, it calls for an additional 1.3 GW. The first phase also for 1.3 GW received a provisional offtake award in New York’s third solicitation, which was completed in October 2023.
“Today’s award is an important milestone in our continuing efforts to maximize value creation from Empire Wind 1, currently one of the biggest and most mature renewables projects in the U.S.,” said Pal Eitrheim, executive vice president of Equinor Renewables. “We are working diligently to bring the project to an investment decision during the third quarter.”
Empire Wind 1 would be located 15 miles offshore and deliver 810 MW. It is targeted to deliver first power in 2026. It has already received approval for its Construction and Operations Plan from the Bureau of Ocean Energy Management. It now needs to complete a new Offshore Wind Renewable Energy Certificate with NYSERDA.
Sunrise Wind would be located more than 30 miles east of Long Island and is expected to deliver 924 MW. It also needs to complete negotiations with NYSERDA on a new power agreement with Ørsted reporting a final investment decision is expected to be made in the second quarter of 2024.
It is a major step for Ørsted which had previously backed away from its U.S. offshore wind investments. They highlight that this will permit it to develop an offshore wind cluster with South Fork Wind (130 MW) due to complete construction shortly, Revolution Wind (704 MW) under construction, and Sunrise Wind. The projects will be able to share resources and the company has said the award for Sunrise Wind would reduce by approximately $260 million its impairment charge for its U.S. offshore wind assets.
In exchange for the new contracts, New York is requiring additional investments above the $32 million committed for the communities and $16.5 million toward wildlife and fisheries monitoring. They also have a stipulation requiring a total of at least $188 million in U.S. iron and steel purchases for the projects. The projects also include elements such as the development of the wind port at the South Brooklyn Marine Terminal and investments in the Long Island electric grid and in transmission assets.