New York Expects Significant Participation in Offshore Wind Power Auction

New York is anticipating a robust turnout from multiple offshore wind developers in its fourth offshore wind solicitation, with the deadline set for Thursday. Notable participants include units of European energy giants Orsted, Equinor, and BP.

The U.S. offshore wind industry faced challenges last year due to surging construction costs, higher interest rates, and supply chain disruptions. To salvage projects and meet clean energy targets, states like New York have allowed developers to re-bid projects at higher levels.

Orsted, Equinor, and BP, having secured contracts to sell power from offshore wind farms in New York, are expected to seek new deals at higher power prices. The companies collectively recorded around $5 billion in writedowns on U.S. offshore wind projects due to insufficient contract coverage.

In November 2023, New York initiated an accelerated solicitation, enabling companies to exit old contracts and re-offer projects at increased prices. Developers must submit their bids by Thursday, with New York expected to announce winners in February.

The auction’s outcome will indicate updated market costs for offshore wind and the states’ willingness to pay a premium for this form of power, according to Eli Rubin, a senior energy analyst at EBW Analytics Group.

Equinor/BP’s joint venture recently canceled a power sale agreement for the proposed 1,260-megawatt Empire Wind 2 offshore wind farm. Other projects potentially re-bidding for higher contracts include Orsted/Eversource’s 924-MW Sunrise Wind and Equinor/BP’s 816-MW Empire Wind 1 and 1,230-MW Beacon Wind.

Orsted, announcing the acquisition of Eversource’s 50% stake in Sunrise, aims to complete the project by 2026 if successful in the upcoming solicitation.

Apart from existing projects, several other proposals from European energy firms, such as Electricite de France, Shell, EDP Energias de Portugal, ENGIE, RWE, National Grid, and Iberdrola’s Avangrid, may be bid into New York’s solicitation. Most companies are collaborating on project development.

New York’s inaugural offshore wind farm, Orsted/Eversource’s 132-MW South Fork, delivered its first power in December, with full service expected by late January or early February.

Catch the latest in supply chain news on The Supply Chain Report. Visit ADAMftd.com for free international trade tools.

#NewYorkOffshoreWind #Orsted #Equinor #BP #RenewableEnergy #CleanEnergy #WindPower #SustainableDevelopment #OffshoreWindSolicitation #EnergyTransition #EnergyAnalyst #ProjectBids #MarketCosts #EBWAnalytics #EnergyInnovation