The U.S. Department of the Interior on Thursday approved the Empire Wind offshore project, owned by Equinor (EQNR.OL) and BP (BP.L), the sixth commercial-scale wind farm to be greenlit under President Joe Biden's administration.
Empire Wind is among several offshore wind projects facing construction and financing cost blowouts that the troubled industry says would not be covered by existing power sales contracts, but it could be helped by a new auction planned by New York state.
Along with Danish counterpart Orsted (ORSTED.CO), Equinor and BP have taken a combined $5 billion of writedowns on U.S. offshore wind projects that are not even completed.
The Interior Department said its approval of Empire Wind brings the country closer to its goal of deploying 30,000 megawatts (MW) of offshore wind along U.S. coastlines by 2030.
New York state, for its part, also aims to develop 9,000 MW of offshore wind by 2035.
Empire Wind will include two offshore wind farms, 816-MW Empire Wind 1 and 1,260-MW Empire Wind 2, located about 12 nautical miles (nm) south of Long Island, and about 17 nm east of Long Branch, New Jersey.
Together, its 147 turbines will be capable of producing renewable power for more than 700,000 homes each year, the Bureau of Ocean Energy Management estimated.
Empire Wind 1 was expected to start production in 2026 and Empire Wind 2 a year later, according to the New York State Energy Research and Development Authority.
Equinor and BP have booked $300 million and $540 million in impairments respectively on their projects off New York, after the state's regulator rejected their request to renegotiate power supply terms.
On Nov. 30, New York will issue a new offshore wind solicitation open to all bidders, including those with existing contracts, allowing the companies to re-offer their planned projects at higher prices and exit their old contracts.
