NYSERDA finalizes new Empire Wind and Sunrise Wind contracts

Image: NYSERDA

NYSERDA (New York State Energy Research and Development Authority) has finalized new purchase and sales agreements for the energy produced by two major offshore wind projects:

• Empire Wind 1, a planned 810-megawatt project (developed by Equinor)
• Sunrise Wind, a planned 924-megawatt project (developed by Ørsted and Eversource).

Both projects had previously been awarded contracts by NYSERDA in 2019, but had been put in doubt when, last October, the New York State Public Service Commission denied petitions that sought to address inflationary pressures on project economics through adjustment to Renewable Energy Credit (REC) and Offshore Wind REC (OREC) purchase and sales agreements entered with NYSERDA.

None of that was mentioned when the new contracts were announced yesterday.

“New York is leading the nation to build the clean energy industry, create good-paying jobs, and advance our climate goals,” said New York Gov. Kathy Hochul. “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.”

Both projects are mature. 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.

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.

With the new contracts, the projects are now on a path to near term project completion, driving local investments and enhanced economic benefits to New York State at cost-competitive rates. The average bill impact for residential customers over the life of these projects under these awards will be approximately two percent, 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.

NYSERDA’s new contracts with Empire Wind 1 and Sunrise Wind are available on the agency’s website.

Equinor Renewables Americas president Molly Morris said, “We commend Governor Hochul and NYSERDA for their long-term leadership and commitment to offshore wind. Today’s announcement signals exciting developments ahead for Empire Wind 1. The transformation of South Brooklyn Marine Terminal is already underway, creating new union jobs and placing New York at the center of an industry that will deliver a critical source of renewable power for decades to come.”

Ørsted EVP and CEO David Hardy said, “Sunrise Wind, providing clean reliable power to the State of New York, will be a centerpiece of America’s clean energy transformation, and we’re incredibly proud to be advancing what will become the nation’s largest offshore wind project upon its completion. New York already made history as host to the country’s first utility-scale wind farm with our South Fork Wind project. Now, thanks to the leadership of Governor Hochul, NYSERDA, and the entire administration, we’re ready to build on that legacy to deliver even more jobs, economic benefits, and clean energy with Sunrise Wind.”

Eversource Energy chairman, president, and CEO Joe Nolan said, “Today’s announcement begins the next chapter for Sunrise Wind, bringing America’s largest offshore wind farm one step closer to fruition. 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.”