Equinor’s 810MW Empire Wind 1 and Orsted’s 924MW Sunrise Wind projects have received provisional contracts in New York’s fourth offshore wind solicitation.
The projects, totalling over 1700MW of clean energy, will be the largest power generation projects in New York State in over 35 years once they enter operation in 2026, according to Governor Kathy Hochul.
In addition, the award enables the construction of the South Brooklyn Marine Terminal, which will be used in the construction of offshore wind projects in the state, she said.
As mature projects, Empire Wind 1, located 15 miles off New York’s shore, and Sunrise Wind, located more than 30 miles east of the eastern point of Long Island, have already completed most federal and state permitting milestones, including Empire Wind 1 receiving final approval of their Construction and Operations plan from the Bureau of Ocean Energy Management (BOEM).
Both projects are expected to ramp up construction activity this year while driving local investments and enhanced economic benefits to New York State at cost-competitive rates.
Today’s awards are conditional on successful contract execution.
In addition, the RWE and National Grid’s Community Offshore Wind 2 project has been “waitlisted” and may be considered for award and contract negotiation at a later date.
The weighted average all-in development cost of the awarded offshore wind projects over the life of the contracts is $150.15 per MWh which is on-par with the latest market prices.
Empire Wind and Sunrise Wind had previously signed deals for $83.3 per MWh, but cancelling their contracts in favour of rebidding for higher prices.
“I promised to make New York a place for the renewable energy industry to do business, and we are delivering on that promise,” Governor Hochul said.
“Offshore wind is foundational to our fight against climate change, and these awards demonstrate our national leadership to advance a zero-emissions electric grid at the best value to New Yorkers.”
The competitively selected projects will create more than 800 near-term family-sustaining construction jobs and invest $2bn in near-term enhanced economic development statewide, including developer-committed investments to support disadvantaged communities, she added.
David Hardy, Executive Vice President and CEO of Region Americas at Ørsted, said: “New York 4 is testament to Governor Hochul’s leadership on clean energy and the state’s ability to respond nimbly to the unprecedented macroeconomic developments that fundamentally changed the economics of the first wave of US offshore wind projects and threatened the state’s transition to clean energy.
“With today’s award at a bid price level reflecting the current component and financing costs, Sunrise Wind is well positioned to deliver clean energy to New York.
“We’re proud to be New York’s offshore wind leader. Soon, we’ll complete the construction of South Fork Wind, the state’s first offshore wind farm, and with Sunrise Wind, we’ll deliver further economic benefits and local jobs to the state, while helping New York achieve its goal of reaching 70 % renewable energy by 2030.”
“Today’s award is an important milestone in our continued efforts to maximise value creation from Empire Wind 1, currently one of the biggest and most mature renewables projects in the US,” said Pal Eitrheim, Executive Vice-president of Equinor Renewables.
“The award represents an important contribution to New York’s climate ambitions from a large-scale project in a growth market that has demonstrated a strong commitment to offshore wind. We are working diligently to bring the project to an investment decision during the third quarter of this year.
“With the use of project financing, we currently expect our US East Coast offshore wind investments to deliver full-cycle nominal equity returns within the range of 12-16%. We intend to farm down to a new partner at the right time to further enhance value and reduce our exposure.”