Equinor and bp have terminated New York State’s Empire Wind 2 offshore wind farm – but a do-over isn’t out of the question.
The two companies have agreed with the New York State Energy Research and Development Authority (NYSERDA) to terminate the Offshore Wind Renewable Energy Certificate (OREC) Agreement for the 1,260 megawatt (MW) Empire Wind 2.
Equinor and bp said that the decision to terminate Empire Wind 2 was due to “commercial conditions driven by inflation, interest rates, and supply chain disruptions” that prevented its existing OREC agreement from being viable.
The state’s utility regulator, the New York Public Service Commission (NYPSC), refused to renegotiate Empire Wind’s contracts at higher prices despite an appeal from Equinor and bp.
However, the two companies are still very much at the table, as they called this cancellation a “reset” in their announcement and say they are “seeking new offtake opportunities.” They said that the already mature project might get a second life in some shape or form because there’s support from the state to revive the faltering projects.
Molly Morris, president of Equinor Renewables Americas, said:
Commercial viability is fundamental for ambitious projects of this size and scale. The Empire Wind 2 decision provides the opportunity to reset and develop a stronger and more robust project going forward. We will continue to closely engage our many community partners across the state.
As evidenced by the progress at the South Brooklyn Marine Terminal, our offshore wind activity is ready to generate union jobs and significant economic activity in New York.
In October, Governor Kathy Hochul (D-NY) announced a 10-point plan to help clean energy developers “overcome recent macroeconomic and inflationary challenges that have impacted the renewable energy sector.”
At the end of October, NYSERDA awarded three offshore wind contracts to other developers at much higher prices than the Empire Wind projects, and that’s good news for bp and Equinor as they seek a reset.
The Biden administration approved Empire Wind 1 and 2 on November 21, 2023.
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