New York officers put forth conditional contracts to purchase electrical energy from two proposed offshore wind farms, saying the awards Feb. 29 for installations that might be the most important energy technology tasks constructed within the state in a long time.
The solicitation by the New York State Power Analysis and Improvement Authority (NYSERDA), which allowed builders to exit outdated contracts in favor of recent, extra economically-friendly offers, resulted in contracts for the Empire Wind 1 venture from Norway’s Equinor, and the Dawn Wind set up being constructed by Denmark’s Orsted and U.S. utility Eversource.
The NYSERDA program is designed to help New York’s offshore wind trade, and supply extra impetus for the state’s clear vitality targets. New York has a aim to develop 9,000 megawatts of offshore wind technology capability by 2035. Dawn Wind (924 MW) and Empire Wind 1 (810 MW) will contribute greater than 1,700 MW towards that concentrate on. The wind farms are anticipated to come back on-line in 2026 and 2027, respectively.
Offshore Wind ‘Foundational’
“I promised to make New York a spot for the renewable vitality trade to do enterprise, and we’re delivering on that promise,” New York Gov. Kathy Hochul mentioned in a press release. “Offshore wind is foundational to our battle in opposition to local weather change, and these awards display our nationwide management to advance a zero-emissions electrical grid at the very best worth to New Yorkers.” The tasks can now enter into contracts to promote Offshore Wind Renewable Power Certificates (ORECs) to NYSERDA on behalf of New York electrical energy clients. Each tasks are within the last levels of the federal authorities allowing course of.
The U.S. so far has put in greater than 240 MW of offshore wind technology capability off the coasts of New York, Massachusetts, Rhode Island, and Virginia, in accordance with authorities knowledge. That’s up from 42 MW right now final yr.
Builders of U.S. offshore wind tasks, together with a few of their world counterparts, have mentioned the trade is dealing with challenges from increased development prices, together with points brought on by elevated rates of interest for financing. Provide chain points additionally proceed to weigh on some tasks. Offshore wind builders historically signal long-term agreements, detailing the speed clients pays for electrical energy and the way a lot they may use, early within the strategy of designing a wind farm. The dearth of flexibility in these contracts meant the builders can be on the hook for rising prices.
That led builders final yr to cancel contracts to promote 5.5 GW of offshore wind vitality alongside the coast of the U.S. Northeast.
Equinor and Orsted every have mentioned the economics of their U.S. offshore wind tasks are being challenged, and each teams wished to cost clients extra for the electrical energy from their installations. New York officers didn’t conform to that plan, however did say corporations may rebid tasks to maybe enhance the financial outlook. The businesses on Thursday mentioned they may now negotiate last phrases for 25-year contracts. Every group mentioned the offers are anticipated to be executed by mid-year.
Orsted late final yr mentioned it could cease improvement of two offshore wind farm tasks off the coast of New Jersey as a result of rising prices. The corporate on the time mentioned that ending the Ocean Wind 1 and a pair of tasks, with mixed technology capability of two,248 MW, may end in greater than $5 billion in impairment costs.
‘New Starting’
“It is a promising new starting for Empire Wind 1 and we’re able to get began,” Equinor Renewables America President Molly Morris mentioned in a press release. Equinor’s venture proposal contains remaking a marine terminal in Brooklyn right into a staging and port facility for offshore wind improvement.
“We applaud the Hochul administration for his or her steadfast help of unpolluted, renewable offshore wind energy. These awards for the Dawn Wind and Empire Wind 1 tasks display the state’s dedication to offshore wind and diversify its vitality portfolio, representing a big step ahead to constructing a sustainable vitality future for generations to come back,” mentioned Anne Reynolds, vp for Offshore Wind on the American Clear Energy Affiliation, in a press release emailed to POWER. “By investing in and advancing offshore wind improvement, New York is paving the way in which for different states and areas to comply with swimsuit, enabling a nationwide shift towards a low-carbon future that may create jobs, revitalize ports, and improve grid reliability.”
Orsted beforehand had mentioned it could purchase Eversource’s 50% stake within the Dawn Wind venture, although Eversource nonetheless would direct the wind farm’s onshore development. The utility in a press release mentioned, “Upon the completion of a profitable sale, Eversource now not expects to have any danger publicity associated to Dawn Wind, together with abandonment prices that had been assumed in its impairment evaluation.”
Dawn Wind is predicted to be the most important U.S. offshore wind venture as soon as full, based mostly on present U.S. set up introduced timelines. Equinor and BP earlier this yr mentioned they might finish the teams’ 1,260-MW Empire Wind 2 venture, citing “business situations pushed by inflation, rates of interest and provide chain disruptions.” Equinor on Thursday mentioned the corporate “intends to usher in a companion to reinforce worth and scale back possession share and publicity” in Empire Wind 1.
Together with Empire Wind 1 and Dawn Wind, there are six U.S. offshore wind tasks both beneath development or nearing development. The others are: South Fork Wind off New York (132 MW); Winery Wind off Massachusetts (800 MW); Revolution Wind off Connecticut and Rhode Island (714 MW); and Coastal Virginia Offshore Wind off Virginia (2,500 MW), which is scheduled for monopile set up by mid-year.
—Darrell Proctor is a senior affiliate editor for POWER (@POWERmagazine).