Equinor Executes Offtake Contract For New York Wind Energy Project
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 (see “Powering New Work With Offshore Wind,” Q2 2024 ESG Review, p. 22).
“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 to deliver first power.”
Onshore construction activity is under way at the South Brooklyn Marine Terminal. 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.
At a strike price of US$155 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 end of 2024. Equinor intends to bring in a partner to reduce financial exposure.
The signing of the offtake agreement brings the 810-MW Empire Wind 1 project one step closer to powering 500,000 New York homes with renewable energy. Empire Wind 1 will generate more than 1000 union jobs during the construction phase, help build out a domestic supply chain, and provide an economic boost to communities while advancing the offshore wind industry in New York and on the East Coast.
An important feature of Empire Wind 1 is the transformation of the South Brooklyn Marine Terminal (SBMT) in Sunset Park, Brooklyn. 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.
“Major renewable energy infrastructure projects such as Empire Wind 1 are a crucial component in reaching New York’s climate goals,” said New York State Energy Research and Development Authority President and Chief Executive Officer Doreen M. Harris. “NYSERDA applauds Equinor for its ongoing commitment to investing in New York’s green economy, including the redevelopment of South Brooklyn Marine Terminal, and helping to stand-up New York’s offshore wind industry one significant milestone at a time.”
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 significant local investments already made in the Offshore Wind Learning Center, the Offshore Wind Innovation Hub, and the Offshore Wind Ecosystem Fund. According to Equinor, Empire Wind 1 has made a strong commitment to support businesses owned by minorities, women, and service-disabled veterans, mostly focused on onshore development at South Brooklyn Marine Terminal.
