Offshore Wind Project Scrapped Near New Jersey and New York Coast

Offshore wind project Empire Wind 2, located off the coast of New Jersey and New York, has been terminated, according to a press release by Equinor and BP-British Petroleum. The decision was made due to commercial conditions driven by inflation, interest rates, and supply chain disruptions, which rendered the project’s existing Offshore Wind Renewable Energy Certificate (OREC) agreement non-viable. Molly Morris, President of Equinor Renewables Americas, stated that “commercial viability is fundamental for ambitious projects of this size and scale,” and the termination provides an opportunity to develop a stronger and more robust project in the future.

The press release did not mention the status of Empire Wind 1. However, it is worth noting that on October 31, 2023, Ørsted’s Board of Directors decided to cease the development of U.S. Offshore Projects, Ocean Wind 1 and Ocean Wind 2, off the coast of New Jersey. Governor Phil Murphy criticized Ørsted’s decision, calling it outrageous and raising concerns about the company’s credibility and competence.

Equinor and BP reached an agreement with the New York State Energy Research and Development Authority (NYSERDA) to terminate the OREC Agreement for Empire Wind 2. This decision reflects changing economic circumstances within the industry and aims to reposition the project for continued development in anticipation of new offtake opportunities. The termination was driven by commercial conditions such as inflation, interest rates, and supply chain disruptions that hindered the viability of the existing OREC agreement.

Both Equinor and BP remain committed to offshore wind as an essential component of the energy mix. They also emphasize their dedication to making substantial contributions to the state and local economy. Molly Morris, President of Equinor Renewables Americas, expressed the importance of commercial viability for large-scale projects and highlighted the opportunity to reset and develop a stronger Empire Wind 2. Joshua Weinstein, bp’s President of Offshore Wind Americas, praised NYSERDA’s leadership and commitment to offshore wind, stating that it can deliver renewable power and economic benefits to New York and its communities.

Empire Wind 1 and Empire Wind 2 recently achieved significant federal permitting milestones, including receiving the federal Record of Decision from the Bureau of Ocean Energy Management (BOEM). Furthermore, Empire Wind 1 obtained its Article VII Certificate of Environmental Compatibility and Public Need in New York.

Empire Wind is a joint venture between Equinor and bp, with a potential capacity of over 2 GW. It is situated 15-30 miles southeast of Long Island, covering 80,000 acres with water depths ranging from approximately 75 to 135 feet. Equinor is a leading offshore wind developer globally, operating two lease areas in New York (Empire Wind and Beacon Wind) and holding a lease on the Outer Continental Shelf off California. Meanwhile, bp aims to become a net-zero company by 2050 or sooner and has a significant presence in the United States, investing over $145 billion since 2005 and supporting more than 275,000 jobs.

Overall, the termination of the Empire Wind 2 project reflects the challenges posed by economic conditions, but also presents an opportunity to develop a more resilient and successful offshore wind project in the future.

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