Equinor, BP ending Empire Wind 2 contract, but say project could be rebid
An illustration of a wind turbine installation vessel for the Empire Wind 2 project. Credit: Maersk Supply Service
Equinor and BP on Wednesday said they were terminating an agreement with New York State for an offshore wind farm off the coast of Long Beach called Empire Wind 2, but stressed the project could be revived in an upcoming state wind-energy bidding process.
The decision, which follows rival Orsted's canceling of two New Jersey projects late last year, comes as European wind-energy developers work to increase the financial viability of offshore wind farms amid high interest rates and material costs.
Equinor spokesman David Schoetz stressed the company will make a determination in coming weeks whether to rebid the Empire Wind 2 project in the upcoming state solicitation for offshore wind power. Equinor and BP would have had to terminate the already awarded state contract for Empire Wind 2 in order to bid in that solicitation.
Equinor and BP, faced with higher costs to complete Empire Wind 2, previously had asked the state to reopen their winning bid to allow an adjustment in the price New Yorkers would pay for Empire Wind 2's energy by up to 54%. But the state Public Service Commission rejected the request. In addition, Gov. Kathy Hochul last fall vetoed a bill that would have smoothed the projects' controversial transmission cable in Long Beach through regulatory hurdles.
WHAT TO KNOW
- Equinor and BP say they were terminating an agreement with New York State for an offshore wind farm off the coast of Long Beach called Empire Wind 2.
- Equinor stressed that it will make a determination in coming weeks whether to rebid the project in the upcoming state solicitation for offshore wind power.
- The decision comes as European wind-energy developers work to increase the financial viability of offshore wind farms amid high interest rates and material costs.
Empire Wind 2 had garnered a wave of opposition in Long Beach because its cable would snake through the city along highly trafficked roadways to a nearby waterfront substation.
One critic of the project called the termination “welcome news.”
“Equinor failed to properly engage residents, and instead tried to jam through this project against the wishes of local Long Islanders, proving time and again that the company cared for profits over people,” Rep. Anthony D'Esposito (R-Island Park) said.
Long Beach City Council President Brendan Finn, in a statement, said the council was “pleased to learn Equinor has abandoned this misguided project,” while adding the lawmakers “will remain vigilant to ensure the health, safety and quality of life of our residents are protected.”
The 1,260-megawatt Empire Wind 2 project was slated to deliver most of its power to Long Island. The decision won't impact plans for Empire Wind 1, which is to deliver power to New York City with a connection in Brooklyn. Both turbine arrays would be visible from Long Beach, starting around 14 miles from shore.
Schoetz noted the company has until Jan. 25 to make a final determination “if we are going to rebid.”
“What's important for us now is to draw the distinction that we are not canceling this project,” he said of Equinor. “We want to reposition it to be a stronger project for future solicitations.”
Equinor, an energy conglomerate based in Norway, in October took a $300 million impairment charge — a decline in the value of assets — tied to its U.S. offshore wind-energy portfolio. Denmark-based Orsted, after canceling its two New Jersey wind-energy projects, took a $4 billion impairment charge, and expects to make a final investment decision about whether it will rebid its Sunrise Wind project, also for Long Island, in coming weeks.
Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.
