The New York Energy Research and Development Authority selects Equinor’s Empire Wind 1 project to deliver 810 megawatts of offshore wind energy to New York in 2026.
The New York State Energy Research and Development Authority (NYSERDA) today announced that Equinor’s Empire Wind 1 project is one of the conditional winners in the fourth round of offshore wind bidding.
This award is an important milestone in the progress of the project, which can deliver 810 megawatts of renewable energy to New York. Empire Wind 1, a very mature offshore wind project, aims to deliver first power to New York in 2026.
Equinor and NYSERDA will now negotiate an agreement to purchase and sell the renewable offshore wind energy certificate with the contract expected to be executed during the second quarter of 2024.
“Today’s award is an important milestone in our ongoing efforts to maximize value on the Empire Wind 1 project, currently one of the largest and most mature renewable energy projects in the United States. The award represents an important contribution to New York’s climate change ambitions from a large-scale project in the Growing Demonstrated strong commitment to offshore wind. We are working hard to make a project investment decision during the third quarter of this year. Using project financing, we currently expect our offshore wind investments off the US East Coast to generate nominal full-cycle capital returns in the range of 12-16 %. “We intend to seek a new partner at the right time to enhance value and reduce our exposure,” said Pal Etterheim, Executive Vice President of Equinor Renewables.
Subject to signing the contract with NYSERDA, the project is expected to achieve potential actual project returns within the range directed for renewable energy projects of 4-8%. Following a final investment decision expected in mid-2024, Equinor plans to leverage project financing, with financial close expected in late 2024.
Currently, full-cycle nominal capital returns for offshore wind investments on the US East Coast are expected to range between 12 and 16%. Equinor also intends to bring on a partner to enhance value and reduce ownership stake and exposure.
Empire Wind 1 has already achieved several key licensing milestones, including approval of its construction and operations plan from the federal Bureau of Ocean Energy Management and a Certificate of Environmental Capability and Article VII Public Needs from the New York Public Utilities Commission.
On 25 January 2024, Equinor announced an exchange transaction with bp, under which Equinor will assume full ownership of the Empire Wind lease and its projects and bp will assume full ownership of the Beacon Wind lease and its projects. This transaction is subject to regulatory approval and is expected to close in the second or third quarter of 2024.
