Several offshore wind builders will doubtless bid in New York’s fourth offshore wind solicitation by the Thursday deadline, together with items of European vitality companies Orsted, Equinor and BP.
The improvement of the U.S. offshore wind business took a serious blow final yr when firms working in a number of states mentioned they might now not full tasks profitably due to rocketing development prices, increased rates of interest and provide chain snags. The issues additionally hit the wind business in different international locations.
The improvement of the business is essential to assembly each U.S. President Joe Biden and U.S. state-level clear vitality targets. To forestall the tasks from falling by, some state governments together with New York have agreed to permit builders to rebid their tasks at increased ranges.
Orsted, Equinor and BP have already got contracts to promote energy in New York from offshore wind farms, however are anticipated to drop not less than a few of these previous contracts in favor of recent offers at increased energy costs.
The three firms took a mixed roughly $5 billion in write-downs on U.S. offshore wind tasks in improvement as a result of their contracts wouldn’t cowl their prices.
In November 2023, New York launched the present accelerated solicitation that may permit firms to exit previous contracts and re-offer tasks at increased costs. Developers have till Thursday to bid their tasks into the most recent solicitation.
“The outcome of New York’s auction will be a strong indicator of updated, higher market costs for offshore wind – and the relative willingness (or lack thereof) for states to pay a notable premium for offshore wind power,” Eli Rubin, senior vitality analyst at vitality consulting agency EBW Analytics Group, advised Reuters.
New York may title the bidders on Friday and is anticipated to announce winners of the solicitation in February.
Possible New York Bidders
Earlier this month, an Equinor/BP joint venture canceled an agreement to sell power to New York from their proposed 1,260-megawatt (MW) Empire Wind 2 offshore wind farm.
Other tasks that have already got contracts with New York that may very well be canceled for brand spanking new increased priced contracts, embody Orsted/Eversource’s 924-MW Sunrise Wind and Equinor/BP’s 816-MW Empire Wind 1 and 1,230-MW Beacon Wind.
Orsted mentioned on Wednesday it would acquire Eversource’s 50% of Sunriseand expects to finish the challenge in 2026 if the challenge is profitable in New York’s upcoming fourth solicitation.
One megawatt of offshore wind can energy roughly 500 U.S. houses.
In addition, there are a number of different tasks that don’t have already got contracts that firms may bid into New York’s solicitation. Those embody proposals by items of European vitality companies Orsted, Electricite de France (EDF), Shell, Equinor, BP, EDP Energias de Portugal’s EDP Renovaveis (EDPR)., ENGIE, RWE, National Grid and Iberdrola’s Avangrid.
Most of the businesses are working with different companies to develop tasks.
New York’s first offshore wind farm, Orsted/Eversource’s 132-MW South Fork offered first energy in December. The facility ought to enter full service by the tip of January or early February, based on analysts at financial institution Mizuho.
(Reuters – Reporting by Scott DiSavino, Editing by Marguerita Choy)
