BP and Equinor are in the process of renegotiating the power purchase agreements (PPAs) for their joint offshore wind projects in the USA, according to Reuters.
The partners do not plan on developing the projects off the US East Coast unless they meet the ”return thresholds of 6% to 8%” , Reuters quoted bp’s CEO Bernard Looney as saying.
BP and Equinor are jointly developing the 810 MW Empire Wind 1, and the 1,260 MW Empire Wind 2 projects offshore New York, as well as the Beacon Wind 1 and 2 wind farms off Massachusetts with a combined capacity of 2.4 GW.
The partners have secured the PPAs for the Empire Wind 1 and 2, and for the 1.23 GW Beacon Wind 1 project. In total, the PPAs cover 3.3 GW of capacity.
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Empire Wind, for which Equinor acquired the lease in 2017 and is developing it in two phases, is located 15-30 miles (24-48 kilometres) southeast of Long Island, in water depths of 65-131 feet (20-40 metres).
Beacon Wind is located 60 miles (almost 97 kilometres) east of Montauk Point and 20 miles (32 kilometres) south of Nantucket. The lease was acquired in 2019 and has the potential to be developed with a total capacity of more than 2.4 GW. The wind farms would be connected to the grid in New York and Connecticut.
As previously reported, another offshore wind developer, AVANGRID, terminated the PPA for the Commonwealth Wind offshore wind project off Massachusetts, agreeing to pay USD 48 million in penalties in the process.
Prior to that, we reported that SouthCoast Wind, the joint venture between Shell and Ocean Winds formerly known as Mayflower Wind, is also in discussions with the state’s representatives and utilities to cancel and rebid its PPAs for the first, 1.2 GW phase of its SouthCoast offshore wind project – and is expected to also have its contracts with the EDCs terminated and pay the termination penalties.
Commonwealth Wind, and later SouthCoast Wind, submitted to the Massachusetts DPU that under the power purchase agreements, which had been undergoing review since April 2022, the projects were no longer in a good economic position due to the current macroeconomic conditions, with Avangrid saying that under the existing contracts with the EDCs, its project was no longer viable.