By Stephen Appezzato
Last week, energy company Equinor and its partner BP announced they were pulling out of an agreement with New York officials for an offshore wind project planned along the Monmouth County coastline.
The European energy giants canceled their contract with the New York State Energy Research and Development Authority (NYSER- DA), the official body that oversees offshore wind development, to sell renewable energy generated by the forthcoming Empire Wind 2 offshore wind farm to New York.
The contract to sell power from Empire Wind 1 remains in effect.
Empire Wind 1 and 2 are under New York’s jurisdiction but are to be positioned 15-30 miles southeast of Long Island in the Atlantic Ocean, approximately 19 miles from Long Branch.
According to a release from Equinor, the agreement to terminate the existing contract “reflects changed economic circumstances on an industry-wide scale.”
The company shared that its original agreement with NYSERDA was not “viable” due to “commercial conditions driven by inflation, interest rates and supply chain disruptions.”
U.S. Rep. Chris Smith (R- 4), an outspoken critic of offshore wind, welcomed the news, saying the terminated agreement “marks another victory for concerned residents, commercial and recreational fishermen, and the environmentalists who have been working with me to expose the dangers inherent in the massive ocean industrialization of the Jersey Shore.”
“The promise of benefits and jobs was always over hyped and predicated on the backs of ratepayers. Now that taxpayers and boardrooms are getting an honest look, the projects simply don’t measure up to the hype,” Smith said in a release.
In 2023, offshore wind developers, including Danish giant Ørstead, abandoned power-sale contracts in New Jersey, Connecticut and Massachusetts, citing economic factors like inflation and high interest rates as reasons.
Ørstead ceased developing Ocean Wind 1 and Ocean Wind 2, cornerstones of Gov. Phil Murphy’s renewable energy agenda which were poised to produce more than 2,200 megawatts of energy.
But for skeptics and those opposed to local offshore wind farms, the news might not warrant celebration yet.
In response to canceled contracts, in November NYSERDA ramped up solicitations for offshore wind developers, welcoming more power-sale agreement bids from new and existing contractors.
Since BP and Equinor’s power-sale contracts for Empire Wind 1 and 2 were awarded in 2019 and 2021, before interest rates drastically rose, the companies may resubmit a more profitable bid with NYSERDA. In essence, the companies can propose new agreements for Empire Wind 1 and 2 which are more economically viable.
Kari Martin, advocacy campaign manager at Clean Ocean Action (COA), said, “This is yet another indication of financial turmoil within the offshore wind industry. Oil Giants BP and Equinor want more money from New York than initially contracted. While the project is not canceled yet, the fiscal concerns are serious.”
COA called on federal and state agencies to put a hold on offshore wind projects and stop issuing new permits until the Government Accountability Office completes its forthcoming study into the industry.
“This study will quantify the economic and environmental costs of offshore wind development in the North Atlantic and ensure decisions are based on good science, due diligence, transparency, and good governance,” Martin added.
Molly Morris, president of Equinor Americas, said the recent Empire Wind 2 decision “provides the opportunity to reset and develop a stronger and more robust project going forward,” indicating construction of the farm will proceed.
According to Equinor, the Empire Wind project will have a potential capacity of more than 2,000 megawatts of power.
Final proposals for NYSERDA’s recent solicitation are due later this month, with contract awards expected to be announced in February.
The article originally appeared in the January 11 – January 17, 2024 print edition of The Two River Times.
