Governor Andrew Cuomo has announced that the state of New York has selected two bidders to negotiate offshore wind renewable energy certificates for a combined 1.7 GW of offshore wind energy. The combined the award is the largest in the US to date.
Equinor’s 816-MW Empire Wind project and Sunrise Wind, a joint venture between Ørsted and Eversource with an 880-MW project, were selected by the state in its first large-scale competitive offshore wind solicitation.
Equinor’s Empire Wind project is 23-56 km south of Long Island in the New York Bight. Business Network for Offshore Wind chief executive and president Liz Burdock said the deal proved that Equinor’s move to win the auction for this particular wind energy area and become the first developer to hold a lease in the New York Bight area had paid off. Equinor also holds a wind energy area south of Martha’s Vineyard that it won in the triple auction held by the Bureau of Ocean Energy Management (BOEM) last December.
Ørsted and Eversource’s Sunrise Wind project is in the waters off Massachusetts and Rhode Island, about 48 km from Montauk Point. The project is now added to the existing Block Island windfarm, Revolution Wind and Bay State windfarms off Rhode Island and Massachusetts, the Ocean Wind project off Atlantic City, New Jersey and the Coastal Virginia Offshore Wind project off the Virginia coast in the company’s portfolio of US projects.
Equinor’s project is expected to be developed with 60-80 wind turbines with a capacity of more than 10 MW each. The total investment will be approximately US$3Bn and the project has an expected start up in late 2024.
Equinor Wind US president Christer af Geijerstam said, “Being selected in this highly competitive field of bidders shows the confidence that New York leadership has in Equinor’s capabilities to develop large offshore energy projects.”
The offshore wind turbines for Sunrise Wind will be supplied by Siemens Gamesa who have signed a conditional contract to cover Ørsted and Eversource’s northeast project portfolio of approximately 1.7 GW. The projects in this portfolio – Sunrise Wind, Revolution Wind and Connecticut and South Fork – will all be covered under this supply agreement.
Equinor said the Empire Wind project will help bring renewable energy to New York City while spurring state-wide economic development opportunities. It is expected to create approximately 800 local jobs during construction and operation, including through creating locally-manufactured turbine foundations.
The company will also invest more than US$60M in port upgrades in New York to support future offshore wind projects and further strengthen the state’s position as a hub for offshore wind. Equinor will commit at least US$4.5M to community benefits and workforce development, which will further the goals of New York’s National Offshore Wind Training Institute and Community and Workforce Benefits Fund.
Ørsted US Offshore Wind chief executive and president of Ørsted North America Thomas Brostrøm said, “Today’s announcement secures New York’s role as a leader in the North American energy transformation. Sunrise Wind will ensure that the state and its residents not only benefit from clean, renewable power, but that they reap the rewards of being an early player in a growing industry.”
Sunrise Wind will bring investment to Suffolk County, Long Island. Ørsted and Eversource have committed to investing US$10M to create a National Workforce Training Centre in partnership with Suffolk County Community College and leading labour unions.
The investment will also further the goals of New York’s National Offshore Wind Training Institute and Community and Workforce Benefits Fund. The two companies have also announced a plan to construct a new operation and maintenance hub in the greater Port Jefferson area, which would include facilities for a service operation vessel with a warehouse and office facility in the vicinity.
The project owners have signed a memorandum of understanding with transmission developer Con Edison Transmission and the New York Power Authority, who will support the development of the transmission facilities needed to deliver the offshore wind energy to the electric transmission grid.
Wood Mackenzie senior analyst North American wind power Anthony Logan said, “New York had a significant need for new renewable generation to serve both Long Island and New York City, and rather than attempt to award each in subsequent solicitations, they made a massive bet on capacity to build two projects simultaneously.
“This was more than twice the capacity indicated by the Public Service Commission beforehand, and more than the 1.1 GW awarded by New Jersey just weeks ago, which had previously been considered an eye-popping figure for the US market when their auction was first announced.
“The projects will presumably leverage the last available phaseout value of the investment tax credit at 12%, but as they have announced 2024 operation targets, this will require claiming excusable disruptions as the IRS would otherwise require the projects be completed by the end of 2023.
“These are high-quality wind sites, evidenced by the nearly 50% capacity factors the projects are advertising. Distance to shore will be a challenge for Sunrise, with an extremely long export cable required, but the European offshore sector has made enormous cost-reduction strides in long-distance cabling, so what would have been a project-killing geographical circumstance five years ago has clearly been mitigated.
“The decision by Equinor to use gravity-based foundations is significant, as the technology has been effectively relegated to the demonstration-scale for decades. Empire Wind would be four times larger than the only other operational offshore wind project using this type of foundation.
“Supply chain localisation announcements continue to focus on foundation fabrication, which is the most obvious choice for domestic siting despite recent talk of blade and even possible nacelle fabrication in the US.
“Sunrise’s win is something of a vindication for Ørsted after it very publicly lost the Massachusetts auction in 2017 offering a project from the same lease area, and subsequently bought successful US developer Deepwater Wind.
“Ørsted is now the undisputable centre of the US offshore wind market with roughly 3 GW of awarded projects; given the currently expected solicitation schedules of other states, no other developer could likely amass a similar portfolio until at least 2022.
“Equinor’s win may have an important impact, as their now-guaranteed experience working in the US market will help them to navigate the Californian offshore sector, where the cutting-edge floating technology at which they excel will be necessary for the offshore wind capacity additions we expect as early as 2025.”
National Ocean Industries Association vice-president of government and political affairs Tim Charters said, “The announcement by the Governor of New York signals that offshore wind is set to boom off our Atlantic coast and that developers and companies in the offshore energy supply chain need to get ready to build.
“We eagerly await future announcements about additional procurements and encourage a steady pipeline of leasing from BOEM to support the growth of an offshore wind supply chain in the US, to ensure that the economic opportunity it provides becomes a reality for American workers and results in a more secure American energy future.”