New contracts finalised for Empire Wind 1 and Sunrise Wind offshore windfarms

The contracts for Empire Wind 1, a 810-MW project developed by Equinor, and Sunrise Wind, a 924-MW project developed by Ørsted and Eversource, were finalised after the state’s fourth offshore wind solicitation.

Empire Wind 1 and Sunrise Wind were originally awarded contracts by the New York State Energy Research and Development Authority (NYSERDA) in 2019 as part of NYSERDA’s first offshore wind solicitation, and re-awarded in 2023.

As part of the new contracts, the projects will be held to new provisions that bring additional benefits to the state. These include new economic benefit commitments over and above those originally contracted; commitments to purchasing US iron and steel; and requirements for Labor Peace Agreements for operations and maintenance services. With the new contracts in place, the projects are now on a path to near-term project completion. Beyond the projects’ contractual obligations, Empire Wind 1 and Sunrise Wind are also expected to deliver more than US$6Bn in economic benefits statewide over the 25-year life of the projects. 

As mature projects, Empire Wind I, located 24 km offshore, and Sunrise Wind, which is 48 km east of the eastern point of Long Island, have already completed most federal and state permitting milestones. To support their connection to New York’s electric grid, onshore construction relating to the Sunrise Wind project is well underway, having received approval of its proposed onshore cable route on Long Island in November 2022. Empire Wind 1 achieved a critical milestone last month when the New York State Public Service Commission approved the project’s plan to connect to New York’s electric grid. Work is underway to transform the South Brooklyn Marine Terminal into a state-of-the-art staging and assembly port and long-term operations and maintenance hub for project developer Equinor. 

Responding, Equinor Renewables Americas president Molly Morris said, “We commend Governor Hochul and NYSERDA for their long-term leadership and commitment to offshore wind. This announcement signals exciting developments ahead for Empire Wind 1. The transformation of South Brooklyn Marine Terminal is already underway, creating new union jobs and placing New York at the centre of an industry that will deliver a critical source of renewable power for decades to come.”

Ørsted executive vice president and chief executive David Hardy said Sunrise Wind “will be a centrepiece of America’s clean energy transformation.” Eversource Energy chairman, president and chief executive Joe Nolan said the announcement “begins the next chapter for Sunrise Wind, bringing America’s largest offshore windfarm one step closer to fruition.”

The average bill impact for residential customers over the life of the projects will be approximately 2%, or about US$2.09 per month. The weighted average all-in development cost of the projects over the life of the contracts is US$150.15 per megawatt-hour (MW/h), which is on-par with the latest market prices.

Equinor stated that, at a strike price of US$155.00 MW/h, Empire Wind 1 is expected to deliver forward looking real base project returns within the guided range for renewable projects. Following a final investment decision, Equinor plans to use project financing, with financial close anticipated by end of 2024. The company said it also intends to bring in a partner to reduce financial exposure.

Sunrise Wind secured a Record of Decision from the Bureau of Ocean Energy Management in March, at which time the developers also took a final investment.