Equinor, Ørsted Sign New Empire Wind 1, Sunrise Wind Contracts with New York State

June 5, 2024, by Adrijana Buljan

The State of New York and the developers of Empire Wind 1 and Sunrise Wind projects, Equinor and Ørsted, have signed Offshore Wind Renewable Energy Certificate (OREC) Purchase and Sale Agreements for the two projects the developers re-bid in the state’s fourth offshore wind solicitation and were awarded capacity.

Empire Wind 1 and Sunrise Wind were awarded OREC agreements by the New York State Energy Research and Development Authority (NYSERDA) in New York’s first offshore wind solicitation in 2019.

The developers re-bid the offshore wind projects in the last solicitation to ensure the viability of the projects as the global economic conditions, as well as the conditions within the offshore wind market, have changed since they were awarded the initial ORECs.

Along with selecting Empire Wind 1 and Sunrise Wind in the fourth solicitation, NYSERDA also waitlisted RWE’s Community Offshore Wind 2 project and said the project may be considered for award and contract negotiation at a later date.

The weighted average all-in development cost of the two awarded offshore wind projects over the life of the contracts is USD 150.15/MWh (approx. EUR 138/MWh) which is on par with the latest market prices, NYSERDA said. The average bill impact for residential customers over the life of these projects under these awards will be approximately two per cent, or about USD 2.09 (EUR 1.92) per month.

With new contracts for Empire Wind 1 and Sunrise Wind come new provisions, including economic benefit commitments above what was originally contracted. Under these provisions, the developers will commit USD 32 million (approximately EUR 29 million) for community-focused investments in New York’s disadvantaged communities and USD 16.5 million (approx. EUR 15 million) towards wildlife and fisheries monitoring.

Empire Wind 1 and Sunrise Wind are also required to purchase a minimum of USD 188 million (approx. EUR 173 million) of US iron and steel and sign Labor Peace Agreements for operations and maintenance services.

According to NYSERDA, the two projects will create more than 800 near-term family-sustaining construction jobs, and invest USD 2 billion (approx. EUR 1.8 billion) in enhanced economic development statewide, including developer-committed investments to support disadvantaged communities.

Beyond the projects’ contractual obligations, Empire Wind 1 and Sunrise Wind are expected to deliver more than USD 6 billion (approx. EUR 5.5 billion) in economic benefits statewide over the 25-year life of the projects.

The 810 MW Empire Wind 1 is already moving towards the construction phase as Equinor received final approval from the New York State Public Service Commission in May to start building the offshore wind farm.

Equinor expects to take a final investment decision on Empire Wind 1 soon and to use project financing, with financial close anticipated by the end of 2024. The company also revealed on 29 February an intention to bring in a partner in the project.

Once the project reaches financial close, it will move into the construction stage. The first power from Empire Wind 1 is expected in 2026.

Ørsted and Eversource (which is now leaving the project as a partner) took a final investment decision (FID) on the 924 MW Sunrise Wind in March 2024, shortly after being selected in New York’s fourth solicitation, with onshore works currently progressing.