Pioneering and repriced offshore wind farm gets final approval in New York

New York State has granted the 810MW Empire Wind offshore project its final approval, authorising the project to begin construction, nearly five years after it was selected in the state’s first offshore wind tender.

It has been a long and at times uncertain road for Empire Wind since winning the contract in mid-2019, with the COVID-19 pandemic and Russia’s invasion of Ukraine combining to send costs soaring to the point where original developers BP and Equinor – along with Danish wind energy giant Ørsted – questioned the project’s viability.

The consortium of companies ultimately sought to renegotiate the contract for Empire wind, with the original version no longer able to cover the cost of building and financing projects due to rising inflation and shifting material costs.

The bid to adjust the prices for power generation was rejected the New York State Public Service Commission (NYSPSC) in October 2023, a decision affecting not only Empire Wind, but also the Beacon Wind offshore wind farm and Ørsted’s 880MW Sunrise Wind project.

Ørsted similarly withdrew from the Maryland Public Service Commission orders approving the 966MW Skipjack Wind project earlier this year, explaining that the original power sales contract was “no longer commercially viable because of today’s challenging market conditions, including inflation, high interest rates and supply chain constraints.”

Things began to look up in March, however, after New York State governor Kathy Hochul awarded new contracts worth just over $US150 per megawatt-hour – almost double the original strike price – for Empire Wind and the 924MW Sunrise Wind being jointly developed by Ørsted and Eversource.

The contracts were awarded as part of a fourth renewable energy auction which gave companies a chance to rebid their projects and replace existing projects.

With these updated contracts in place, progress has moved swiftly, and the NYSPSC has now granted Empire Offshore Wind its final approval to begin construction on Empire Wind I.

The NYSPSC awarded Empire Wind its Certificate of Public Convenience and Necessity (CPCN) late last week, which authorises the construction and operation of transmission facilities for the delivery of electricity into New York from the 810MW offshore wind farm.

“Our decision today provides the last remaining approval before construction can begin on this offshore wind project, which is a high priority for the State given that it will advance the State’s renewable and clean energy goals in compliance with the Climate Act,” said Rory M. Christian, Public Service Commission chair.

“It is critical that construction begin in early May for the developer to keep the construction schedule on track and achieve the anticipated commercial operation date.”