Costs to build Sunrise, Empire wind projects will total $13B, filings show

As the developers of two offshore wind farms off Long Island argued in court this month to end Trump administration stop-work orders, their filings for the first time shed light on the cost to build the two massive arrays — a combined $13 billion.

In filings earlier this month, Sunrise Wind, which is scheduled to bring its 924 megawatts of power to Long Island at Smith Point in late 2027, said it has “already spent or committed more than $7 billion on the project,” and that it would incur another $1 billion if the project were to be canceled.

Last year, Orsted issued special new stock to raise $9.4 billion, some $6.3 billion of which was earmarked for the completion of Sunrise, Newsday reported. 

The stop-work order for Sunrise Wind remains in place, with a court hearing scheduled for Feb. 2. Sunrise spokeswoman Meaghan Wims declined to respond to Newsday questions about the potential impacts and previously said the company does not release construction costs.

The stop-work order alone is costing Sunrise $1 million a day, the company said in its filings. All of Sunrise Wind's energy production is scheduled for the Long Island electric grid, where the company has said it can power some 600,000 homes — about half of LIPA’s customer base.

Orsted argued that the “compounding impacts of delay” for the Sunrise project also risk the prospect of “project cancellation,” which would result in the project suffering “enterprise-level harm, including losses of more than $8 billion.” Orsted stock has been battered in recent years by losses and write-downs tied to offshore wind, including cancellation of two big New Jersey projects. 

Separately, Empire Wind, the 810-megawatt project being built off Jones Beach, revealed in court papers that it has spent $4 billion to date on the project, which is more than 60% complete, and that it would spend another $2 billion to complete it this year. Empire, which last week got the go-ahead from a federal judge to resume work under a preliminary injunction, will bring all its energy to New York City’s grid by the end of this year and 2027.

The New York State Energy Research and Development Authority, which administers state offshore wind contracts, has not released the full contract value or construction costs of the projects, as have been released for the $2.013 billion South Fork Wind Farm under contract to LIPA.

Court papers provided an unusual window about the finances underpinning the project.

Empire’s owners at Norway-based Equinor said in their filing the prospect of a “multi-million-dollar delay and termination fees resulting from the suspension order” threatened the project’s economic viability. Equinor in December 2024 obtained a financing package of about $3 billion from a consortium of lenders and has already drawn $2.7 billion of that amount, the filing said.

Before the stop-work order was lifted by the court, Empire disclosed it had been “unable to draw on its construction loan intended to fund construction costs and pay employees and contractors.”

Making matters worse at that time, Empire said, “the project’s lenders may decide to seek accelerated repayment of the $2.7 billion Empire Wind has borrowed under the terms of a credit agreement, which the lenders have the basis to seek upon occurrence of an event of default that remains unremedied after a period of 60 days,” including needed government approvals.

“Thus,” Empire wrote, “without immediate judicial relief, Empire Wind’s construction schedule and financing will be materially and adversely compromised. Each of these harms substantially threatens to terminate the project; together, they are likely insurmountable.”

Sunrise Wind, in its court filings, noted that it had installed 44 of a planned 84 monopile foundations for the project off New England. “Overall, the project is nearly 45% complete and has cost billions of dollars in reliance on the validly issued permits,” Sunrise said.

Construction costs for the Sunrise and Empire projects are expected to be defrayed by federal tax credits of at least 30% of the cost — amounting to billions of dollars. But the all-in construction cost of $6 billion and $7 billion, respectively, are only part of what the companies will seek to receive once the projects are producing energy.

Once the new wind farms are producing power, New York utilities are required by state law to buy special offshore renewable credits called ORECs that allow the wind energy developers to recoup project costs and profits.

In arguing against a stop-work order for another project called Revolution Wind, Orsted said cancellation would result in not just lost construction costs, but “billions of dollars” in lost revenue from selling energy from that array to local utilities in future decades. 

Work on that project commenced by court order earlier this month. 

Revolution Wind, which is adjacent to the Sunrise and South Fork arrays off New England, has “spent or committed more than $5 billion to develop the project, which is now approximately 87% complete.” Cancellation, it said, would result in "more than $1 billion in breakaway costs, for a total loss of more than $6 billion,” the company said in its court filing.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.