Two major New York offshore wind projects are getting back on track, with more lucrative contract awards to replace their existing deals with the state. 

New York on Feb. 29 announced conditional contract awards to Empire Wind 1 and Sunrise Wind, which have a combined 1,734-MW capacity rating — about a fifth of the state’s 9-GW goal for 2035. 

Importantly, both are mature projects, with many of their agreements and permits already in hand. They should be able to come online years sooner than new proposals that would start from scratch. 

Empire Wind and Sunrise Wind will cancel their existing contracts. The numbers would be much larger in the replacement contract.  

Their original contract had an all-in average development cost of $83.36/MWh in 2018 dollars, with an average residential monthly bill impact of 73 cents. 

NYSERDA said Feb. 29 the new conditional contract carried a weighted average all-in lifetime development cost of $150.15/MWh, with an average monthly bill impact of $2.09. 

Providing final contracts are negotiated, the announcement potentially represents the continued comeback of New York’s offshore wind portfolio from near collapse amid the industry problems of 2023. 

Empire Wind 1 and 2, Sunrise Wind and Beacon Wind asked the state in June for more money for their projects, which totaled 4,230 MW of nameplate capacity. Construction costs had soared since they locked in their offtake contracts and the projects had become financially untenable. 

The state in October refused but allowed them to rebid in a rush fourth solicitation that opened at the end of November. Empire 2 and Beacon canceled their contracts and did not rebid. Sunrise and Empire 1 rebid and a new project — the 1,300-MW Community Wind 2 — also submitted a proposal. The state said that project was waitlisted, with potential contract award and negotiation at a later date. 

‘New Beginning’

The U.S. Bureau of Ocean Energy Management green-lighted Empire Wind with a positive record of decision in November and now is finalizing its record of decision with Sunrise Wind. New York Gov. Kathy Hochul (D) framed the contract awards as a way to get the state’s nascent offshore wind sector — and its expected economic and environmental benefits — back on track. 

“Offshore wind is foundational to our fight against climate change,” she said in a statement, “and these awards demonstrate our national leadership to advance a zero-emissions electric grid at the best value to New Yorkers.”   

Empire developer Equinor hailed the contract announcement. “This is a promising new beginning for Empire Wind and we’re ready to get started,” said Molly Morris, president of Equinor Renewables America. 

Sunrise developer Ørsted had a similar reaction. 

“With the selection of Sunrise Wind, New York’s offshore wind story is set to enter a new chapter of large-scale job creation and economic development, and we thank Governor Hochul and her administration for their continued leadership,” said David Hardy, CEO Americas at Ørsted. 

There is much yet to do, however. 

New York’s offshore wind portfolio now consists entirely of South Fork Wind — a first-in-the-nation pioneer nearing completion, but also a 12-turbine installation rated at just 132 MW. 

Three other proposals awarded conditional contracts in the third solicitation — Attentive Energy One, Community Offshore Wind 1 and Excelsior Wind, with a combined capacity of 4,032 MW — still are negotiating final contracts with the New York State Energy Research and Development Authority, more than four months after they were selected. 

‘Steadfast’ for OSW

The financial turmoil that hit the offshore wind industry’s Northeast projects last year is believed to be settling down but is not over. Equinor and Ørsted said Feb. 29 they do not expect to make final investment decisions until mid-2024. 

Equinor and BP recently announced they would terminate their partnership on the Empire and Beacon projects, with BP taking Beacon and Equinor taking Empire. Equinor said Feb. 29 it will bring in a new partner on Empire Wind to reduce its exposure. 

Ørsted’s projects off the New England coast have been in partnership with Eversource, which has been trying to exit the cash-sucking venture since late 2022. Awarding of a final contract for Sunrise would trigger Ørsted’s acquisition of Eversource’s portion of that project, though Eversource would remain involved, leading onshore construction. 

“We are steadfast in our conviction that offshore wind is critical to address climate change and help meet the growing demand for clean, reliable energy,” Community Offshore Wind President Doug Perkins said in a statement Feb. 29. “Our commitment to both New York and the U.S. offshore wind industry is unchanged and we look forward to working with NYSERDA in the future to advance New York’s clean energy goals.”