New York State will problem a brand new offshore wind solicitation on Nov. 30 with bids due in January 2024, the state authorities stated, in a transfer that ought to assist the troubled trade.
European power firms Orsted, Equinor, and BP have taken a mixed $5 billion of writedowns on U.S. offshore wind tasks that aren’t even accomplished, partially as a result of their current energy gross sales contracts wouldn’t cowl the price of constructing and financing the tasks. That is as a result of hovering inflation, rising rates of interest, and provide chain issues have led to a lot increased prices than anticipated.
The new solicitation might be open to all bidders, together with these with current contracts. This would enable the businesses to re-offer their deliberate tasks at increased costs and exit their outdated contracts. The firms had warned they might cancel the ability gross sales contracts after failing to persuade the New York Public Service Commission (NYPSC), the state’s utility regulator, to renegotiate the outdated contracts at increased costs.
In response to the NYPSC’s determination, New York Governor Hochul introduced on Oct. 12 a 10-point plan to assist renewable power corporations “overcome recent macroeconomic and inflationary challenges that have impacted the renewable energy sector.” Those measures included the expedited solicitation for offshore wind and different renewable tasks introduced on Thursday.
The offshore wind tasks that the businesses are creating are Orsted’s 924-megawatt (MW) Sunrise, and the three way partnership between Equinor and BP’s 816-MW Empire Wind 1, 1,260-MW Empire Wind 2 and 1,230-MW Beacon Wind.
In a optimistic signal for the businesses, the New York State Energy Research and Development Authority (NYSERDA) on Oct. 24 awarded three offshore wind contracts at a lot increased costs than the sooner tasks bid by Orsted, BP, and Equinor.
(Reuters – Reporting by Scott DiSavino; modifying by Jonathan Oatis, Nick Zieminski and Richard Chang)
