New York selects Empire Wind I and Sunrise Wind offshore projects
Empire Wind 1 (Credit: Equinor)
New York has conditionally awarded two offshore wind projects from its fourth offshore wind solicitation – a planned 810 MW project, Empire Wind 1, developed by Equinor and Sunrise Wind, a planned 924 MW project developed by Orsted and Eversource.
The projects, totaling over 1,700 MW, will be the largest power generation projects in New York State in over 35 years once they enter operation in 2026, and will continue progress towards achievement of the State’s Climate Leadership and Community Protection Act (Climate Act) goal to develop 9,000 MW of offshore wind energy by 2035.
Empire Wind I, 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 I receiving final approval of their Construction and Operations plan from the Bureau of Ocean Energy Management (BOEM) last week.
Both projects are expected to ramp up construction activity this year. The awards are conditional on successful contract execution, the State said. In addition, the Community Offshore Wind 2 project has been waitlisted and may be considered for award and contract negotiation at a later date.
Empire Wind 1 and Sunrise Wind were previously awarded by NYSERDA in 2019 as part of NYSERDA’s first offshore wind solicitation. As part of these awards, the projects will be held to new contract provisions, including:
- New economic benefit commitments above what was originally contracted, including $32 million committed to community-focused investments in New York’s disadvantaged communities and $16.5 million towards wildlife and fisheries monitoring.
- Commitments to purchasing a minimum of $188 million of U.S. iron and steel.
- Requirements for Labor Peace Agreements for operations and maintenance services.
The average bill impact for customers over the life of these projects under these awards will be approximately two percent, or about $2.09 per month, the State said. The weighted average all-in development cost of the awarded offshore wind projects over the life of the contracts is $150.15 per MWh. Following successful contract execution, NYSERDA payments under these awards will only begin once projects have obtained all required permits and approvals, have been completed, and begin delivering clean energy to New York.
Sunrise Wind will now begin the next steps of finalizing agreements with NYSERDA on the OREC (Offshore Wind Renewable Energy Certificates) contract. The project is expected to be operational in 2026 and will begin the full scope of construction once it has received all federal permits, slated for this summer. The final investment decision on Sunrise Wind is expected to be made in the second quarter of 2024.
With this successful re-bid, Ørsted will acquire Eversource’s 50 percent ownership share in Sunrise Wind, becoming the sole owner of Sunrise Wind, subject to signing of an OREC contract with NYSERDA, finalization of acquisition agreements, receipt of the federal construction and operations plan, and relevant regulatory approvals. Eversource will remain contracted to lead the project’s onshore construction.
Empire Wind 1 has already achieved several key permitting milestones, including approval of its Construction and Operations Plan (COP) from the Federal Bureau of Ocean Energy Management, and its Article VII Certificate of Environmental Capability and Public Need from the New York Public Service Commission.
On January 25, 2024, Equinor announced a swap transaction with bp, under which Equinor will take full ownership of the Empire Wind lease and projects and bp will take full ownership of the Beacon Wind lease and projects. This transaction is subject to regulatory approval and closing of the transaction is expected in Q2 or Q3 2024.
