New York State conditionally awarded two offshore wind projects in its fourth offshore wind solicitation, offering better power purchase prices for the 810-megawatt Empire Wind 1 project by Equinor and the 924 MW Sunrise Wind project by partners Ørsted and Eversource.
“I promised to make New York a place for the renewable energy industry to do business, and we are delivering on that promise,” Gov. Kathy Hochul said in announcing the new awards Feb. 29. “Offshore wind is foundational to our fight against climate change, and these awards demonstrate our national leadership to advance a zero-emissions electric grid at the best value to New Yorkers.”
The new deal comes five months after offshore wind companies called for new contracts, insisting that global economic conditions made their original deals with New York were not financially viable.
New York State officials say the new financials are reasonable for utility customers.
“The average bill impact for customers over the life of these projects under these awards will be approximately 2%, or about $2.09 per month,” according to a summary by Hochul’s office. “The weighted average all-in development cost of the awarded offshore wind projects over the life of the contracts is $150.15 per megawatt-hour which is on-par with the latest market prices.”
In October 2023, developers of Empire Wind proposed raising the “strike price” for Empire Wind 1 from $118.38 per megawatt-hour (MWh) to $159.64/MWh, according to filings then from the New York State Energy Research and Development Authority.
Meanwhile for their Sunrise Wind project, developers Ørsted and Eversource sought a 27% step-up, from $110.37/MWh to $139.99/MWh. At the time NYSERDA said developers “cite an unexpected and unforeseeable rise in inflation and supply chain costs and constraints associated with, among other things, the Covid-19 pandemic and the Russian invasion of Ukraine.” As a result, the authority says, projects now in development are “no longer be economically viable under existing contract pricing terms.”
State power planners say the deals are contingent on delivering power to the grid.
“Following successful contract execution, NYSERDA payments under these awards will only begin once projects have obtained all required permits and approvals, have been completed and begin delivering clean energy to New York.”
State officials extolled the new deal as creating 800 construction jobs and $2 billion in statewide economic impact. That could include:
· Construction and operation of the South Brooklyn Marine Terminal assembly and staging port with 400 construction jobs on the 70-acre waterfront site. in a disadvantaged community into a thriving offshore wind port.
· More than $80 million in construction and manufacturing associated with advanced foundation components at the Port of Coeymans near Albany on the Hudson River .
· Continuning investments of $135 million in electric grid infrastructure on Long Island and $200 million in transmission related investments, backed by a Project Labor Agreement with Long Island skilled tradesmen and women, including heavy equipment operators, electricians, and line workers.
