Offshore

Empire Wind 1, Sunrise Wind finalize offtake agreements with NYSERDA

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Empire Wind 1, Sunrise Wind finalize offtake agreements with NYSERDA
Empire Wind 1 (Credit: Equinor)

Governor Kathy Hochul announced the finalization of new contracts for Empire Wind 1, a planned 810-MW project (developed by Equinor), and Sunrise Wind, a planned 924-MW project (developed by Ørsted and Eversource) as the result of New York’s fourth offshore wind solicitation.

The two offshore wind projects, totaling over 1,700 MW, will be the largest power generation projects in New York State in more than 35 years once they enter operation in 2026.

“New York is leading the nation to build the clean energy industry, create good-paying jobs, and advance our climate goals,” Governor Hochul said. “Offshore wind is a critical piece of our clean energy blueprint to address the climate crisis, and our investments are building a healthy, sustainable New York so that future generations can thrive.”

The competitively selected projects will create more than 800 near-term family-sustaining construction jobs, and invest $2 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 $6 billion in economic benefits statewide over the 25-year life of the projects.

“As the largest power generation projects in the State in over thirty-five years, these landmark projects, when built, will be a historic milepost in New York’s transition to a clean energy economy,” New York State Energy Research and Development Authority President and CEO Doreen M. Harris said. “Achieving a zero-emissions electric grid will deliver significant economic and public health benefits as well as reliability to all New Yorkers.”

As mature projects, Empire Wind I, located 15 miles off New York’s shore, and Sunrise Wind, located more than 30 miles east of the eastern point of Long Island, have already completed most federal and state permitting milestones. To support the wind farm’s connection to New York’s electric grid, onshore construction relating to the Sunrise Wind project is well underway, having received approval of its proposed onshore cable route on Long Island in November 2022. Empire Wind 1 achieved a critical milestone last month when the New York State Public Service Commission approved the project’s plan to connect to New York’s electric grid. Work is underway to transform the South Brooklyn Marine Terminal into a state-of-the-art staging and assembly port and long-term operations and maintenance hub for project developer Equinor.

“Today’s announcement begins the next chapter for Sunrise Wind, bringing America’s largest offshore wind farm one step closer to fruition,” Eversource Energy Chairman, President, and Chief Executive Officer Joe Nolan said. “Sunrise Wind will have a transformational impact on New York’s economy, with the onshore construction scope alone representing a more than $200 million investment and creating 400 new local union jobs. We are grateful to Governor Hochul and all the federal, state, and local leaders supporting this landmark project. As Sunrise Wind moves forward, it will continue to spur hundreds more jobs and millions more in local investment, cementing New York’s national leadership in the clean energy economy.”

Empire Wind 1 and Sunrise Wind were previously awarded by NYSERDA in 2019 as part of NYSERDA’s first offshore wind solicitation and were re-awarded in 2023. As part of the new contracts, the projects will be held to new provisions that bring additional benefits to the state, including:

  • New economic benefit commitments above what was originally contracted, including $32 million committed to community-focused investments in New York’s disadvantaged communities and $16.5 million towards wildlife and fisheries monitoring.
  • Commitments to purchasing a minimum of $188 million of U.S. iron and steel, supporting U.S. manufacturing and the New York Buy American Act.
  • Requirements for Labor Peace Agreements for operations and maintenance services.

The average bill impact for residential customers over the life of these projects under these awards will be approximately 2% or about $2.09 per month. The weighted average all-in development cost of the contracted offshore wind projects over the life of the contracts is $150.15 per megawatt-hour which is on par with the latest market prices.

Equinor announced the execution of the Purchase and Sale Agreement (PSA) with the New York State Energy Research and Development Authority (NYSERDA) for the renewable power generated by the Empire Wind 1 offshore wind project. This agreement follows NYSERDA’s February announcement that Equinor had been selected as a conditional winner in New York’s fourth offshore wind solicitation.   

“We thank NYSERDA and the state of New York for their steadfast commitment to the offshore wind industry and to achieving the state’s broader renewable energy targets,” said Molly Morris, president of Equinor Renewables Americas. “Empire Wind 1 is a defining project for Equinor and the PSA agreement is an important milestone in de-risking and ensuring a robust path forward as we work toward delivering first power.” 

Empire Wind 1 will be America’s first offshore wind project to plug directly into the New York City grid with a target to deliver first power in late 2026.  

An important feature of Empire Wind 1 is the transformation of the venerable South Brooklyn Marine Terminal (SBMT) in Sunset Park, Brooklyn, where onshore construction activity is underway. SBMT will be rebuilt using union labor and serve as the primary staging and assembly area for Empire Wind 1. Going forward, the port will be positioned as a central hub for future offshore wind projects as the industry grows along the Northeast seaboard in the coming decades.    

At a strike price of $155.00 per MW/h Empire Wind 1 is expected to deliver forward-looking real base project returns within the guided range for renewable projects. Following a final investment decision, Equinor plans to use project financing, with financial close anticipated by the end of 2024. Equinor intends to bring in a partner to reduce financial exposure.  

As part of this agreement, the project is set to provide a range of economic benefits that will support economic development in New York City and across the state, including increased funding for workforce and community development, with local investments already made in the Offshore Wind Learning Center, the Offshore Wind Innovation Hub, and the Offshore Wind Ecosystem Fund.

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