US BOEM Approves Construction of Equinor's Empire Wind

Equinor ASA has received approval from the United States Bureau of Ocean Energy Management (BOEM) to proceed with the construction of two wind power projects offshore New York, the Interior Department sub-agency said.

“The approved plan includes construction and operation of two offshore wind facilities, known as Empire Wind 1 and Empire Wind 2”, the BOEM said in a news release.

“Together these projects would have a total capacity of 2,076 megawatts of clean, renewable energy that BOEM estimates could power more than 700,000 homes each year”, it added.

Early this year Equinor signed an agreement to take over full ownership of Empire Wind in a swap transaction with partner BP PLC involving two costs-hit offshore wind projects.

Equinor canceled a power supply agreement with New York state for the Beacon Wind project and entered a deal to fully transfer the lease to partner BP in exchange for the latter’s stake in Empire Wind, the European energy majors said in separate press releases January 25.

Norway’s majority-state-owned Equinor and British competitor BP are 50-50 joint venturers in both leases. The swap transaction now restructures ownership of the leases for Beacon Wind, which spans Massachusetts and New York, and Empire Wind.

“Under the agreement, Equinor will take 100 percent ownership of Empire Offshore Wind Holdings LLC”, Equinor said. The agreement also provides for Equinor’s takeover of BP’s 50 percent ownership of the South Brooklyn Marine Terminal wind project, which was agreed on by the two and the state of New York in 2022. The terminal transformation project will serve as an interconnection station for both Beacon Wind and Empire Wind.

“BP will take over Beacon Wind Holdings LLC and the associated project company that holds the Astoria Gateway for Renewable Energy site and will become the operator of the Beacon Wind projects”, Equinor added. The Beacon Wind joint venture last year bought the site of the Astoria Gas Turbines with a plan to transform it into a renewable energy converter station under a project called Astoria Gateway for Renewable Energy.

“The agreement provides Equinor and bp with the flexibility to pursue their respective priorities under their corporate strategies”, Equinor said.

Earlier in January Equinor announced an agreement has been reached with New York’s energy regulator to terminate an earlier agreement for power supply from Empire Wind 2, citing rising costs and supply chain disruptions.

“This [termination] agreement reflects changed economic circumstances on an industry-wide scale and repositions an already mature project to continue development in anticipation of new offtake opportunities”, Equinor said in a media release January 4.

“The decision recognizes commercial conditions driven by inflation, interest rates and supply chain disruptions that prevented Empire Wind 2’s existing OREC [Offshore Wind Renewable Energy Certificate] agreement from being viable”.

Following the swap agreement with BP, Equinor said a bid had been submitted for Empire Wind 1 in New York’s fourth offshore wind solicitation round.

With Empire Wind cleared to proceed for construction the BOEM has now approved first six commercial-scale offshore wind projects in the country.

"This project represents a major milestone in our efforts to expand clean energy production and combat climate change”, BOEM Director Elizabeth Klein said in a statement. “The Biden-Harris administration is committed to advancing offshore wind projects like Empire Wind to create jobs, drive economic growth, and cut harmful climate pollution”.

The BOEM has so far held four offshore wind lease auctions. The sales attracted nearly $5.5 billion in high bids, offering projects in Gulf of Mexico and Pacific waters, as well as New Jersey and New York.

On March 29, 2021, the Energy Department announced goals of 30 gigawatts of offshore wind deployment by 2030 toward at least 110 GW by 2050. On September 22, 2022, the Biden administration announced a target of 15 GW for floating wind farms by 2035.

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