New York State Energy Research and Development Authority (NYSERDA) announced Equinor’s Empire Wind 1 project one of the conditional winners in its fourth offshore wind solicitation round.
The award is an important milestone for the advancement of the project, which can deliver 810 megawatts (MW) of renewable energy to New York. An already highly mature offshore wind project, Empire Wind 1 targets to deliver first power to New York in 2026.
Equinor and NYSERDA will now negotiate an Offshore Wind Renewable Energy Certificate (OREC) Purchase and Sale Agreement, with contract execution expected within Q2 2024.
“Today’s award is an important milestone in our continued efforts to maximize value creation from Empire Wind 1, currently one of the biggest and most mature renewables projects in the US. The award represents an important contribution to New York’s climate ambitions from a large-scale project in a growth market that has demonstrated a strong commitment to offshore wind. We are working diligently to bring the project to an investment decision during the third quarter of this year. With the use of project financing, we currently expect our US East Coast offshore wind investments to deliver full-cycle nominal equity returns within the range of 12-16%. We intend to farm down to a new partner at the right time to further enhance value and reduce our exposure,” said Pål Eitrheim, executive vice president of Equinor Renewables.
Subject to signing of the OREC contract with NYSERDA, the project is expected to deliver forward-looking real base project returns within the guided range for renewable projects of 4-8%. Following a final investment decision expected mid-2024, Equinor plans to use project financing, with financial close anticipated by end of 2024. Full-cycle nominal equity returns for the US East Coast offshore wind investments is currently expected within the range of 12-16%. Equinor also intends to bring in a partner to enhance value and reduce ownership share and exposure.
Empire Wind 1 has already achieved several key permitting milestones, including approval of its Construction and Operations Plan (COP) from the Federal Bureau of Ocean Energy Management, and its Article VII Certificate of Environmental Capability and Public Need from the New York Public Service Commission.
On 25 January 2024, Equinor announced a swap transaction with bp, under which Equinor will take full ownership of the Empire Wind lease and projects and bp will take full ownership of the Beacon Wind lease and projects. This transaction is subject to regulatory approval and closing of the transaction is expected in Q2 or Q3 2024.
