Two offshore wind projects in the US Atlantic that would have otherwise terminated old offtake contracts – Empire Wind 1 and Sunrise Wind 1 – have been reborn with wins in New York's round 4 auction.
New York yesterday awarded fresh offtake contracts to the two legacy developments (both originally awarded deals in the state’s very first auction for offshore wind in 2019), signing them up to deliver ~1.7 GW offshore wind to the state grid at an average price of ~150 USD/MWh.
Under the old contracts, Equinor and Ørsted were developing the projects at strike prices of ~118 USD/MWh and ~110 USD/MWh, respectively, which the developers were saying had become uneconomical.
While it is not exactly clear what goes into the calculation of the 150 USD/MWh, the new contracts seem to put Empire Wind 1 and Sunrise Wind 1 on level with other offshore wind projects that recently won contracts with New York or New Jersey.
For the sector, this indicates that offshore wind in the US has found a new price equilibrium – one that states are willing to pay and which offshore wind developers find sufficient to keep the developments going through the current higher cost climate.
For New York, progressing Empire Wind 1 and Sunrise Wind 1 is key to cementing investments in flagship windports and the wider state supply chain and so to advancing New York’s leadership in the American offshore wind sector.
And for Equinor and Ørsted the new offtake deals mean they can keep to the original construction plan for the Empire 1 and Sunrise 1, avoiding losses on earlier investments made in connection with the projects, and stay on track towards commercial operation in 2026.
Aegir Insights US Atlantic market intelligence
Following this news of New York’s Round 4, Aegir Insights will publish a fully updated market report on the US Atlantic next week, including a comprehensive overview of projects and auctions the region.
Our clients can also reach out to lead regional analyst Signe Sørensen to schedule a session unpacking recent auction results.
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