New York awards Equinor, Sunrise Wind major offshore wind contracts

The US state of New York today awarded two major offshore wind contracts to Norwegian energy company Equinor, and Sunrise Wind, a joint venture between Denmark’s Ørsted and US utility Eversource.

The two projects will have a combined generation capacity of 1.7 gigawatts (GW), and are scheduled to reach completion by 2024.

Anthony Logan, senior analyst, North American Wind Power, said: “New York had a significant need for new renewable generation to serve both Long Island and New York City, and rather than attempt to award each in subsequent solicitations, they made a massive bet on the capacity of this very nascent sector to build two projects simultaneously.

“This was more than twice the capacity indicated by the Public Service Commission beforehand, and more than the 1.1 GW awarded by New Jersey just weeks ago, which had previously been considered an eye-popping figure for the US market when their auction was first announced.

“The projects will presumably leverage the last available phaseout value of the investment tax credit at 12%, but as they have announced 2024 operation targets, this will require claiming excusable disruptions as the IRS would otherwise require the projects be completed by the end of 2023.

“These are high-quality wind sites, evidenced by the nearly 50% capacity factors the projects are advertising. Distance to shore will be a challenge for Sunrise, with an extremely long export cable required, but the European offshore sector has made enormous cost-reduction strides in long-distance cabling, so what would have been a project-killing geographical circumstance five years ago has clearly been mitigated.

“The decision by Equinor to use gravity-based foundations is significant, as the technology has been effectively relegated to the demonstration-scale for decades. Empire Wind would be four times larger than the only other operational offshore wind project using this type of foundation.

“Supply chain localisation announcements continue to focus on foundation fabrication, which is the most obvious choice for domestic siting despite recent talk of blade and even possible nacelle fabrication in the US.

“Sunrise’s win is something of a vindication for Ørsted after it very publicly lost the Massachusetts auction in 2017 offering a project from the same lease area, and subsequently bought successful US developer Deepwater Wind.

“Denmark’s Ørsted is now the undisputable centre of the US offshore wind market with roughly 3 GW of awarded projects; given the currently expected solicitation schedules of other states, no other developer could likely amass a similar portfolio until at least 2022.

“Equinor’s wind may have a distant impact, as their now-guaranteed experience working in the US market will help them to navigate the California offshore sector, where the cutting-edge floating technology at which they excel will be necessary for the offshore wind capacity additions we expect as early as 2025.”