Equinor and bp rip up US offshore wind contract

The parties said the decision to terminate the Offshore Wind Renewable Energy Certificate (OREC) Agreement for the project reflects ”changed economic circumstances on an industry-wide scale” and repositions an already mature project to continue development in anticipation of new offtake opportunities.

“Commercial viability is fundamental for ambitious projects of this size and scale. The Empire Wind 2 decision provides the opportunity to reset and develop a stronger and more robust project going forward,” said Molly Morris, president of Equinor Renewables Americas.

“We will continue to closely engage our many community partners across the state. As evidenced by the progress at the South Brooklyn Marine Terminal, our offshore wind activity is ready to generate union jobs and significant economic activity in New York.”

Not viable

At the heart of the termination decision lies commercial conditions driven by inflation, interest rates and supply chain disruptions that according to the two parties, prevent Empire Wind 2’s existing OREC agreement from being viable.

But despite this decision, Equinor and bp both said that they believe offshore wind can be an important part of the energy mix and are committed to maintaining substantial contributions to the state and local economy.

“bp is supportive of NYSERDA’s leadership and commitment to offshore wind, which we believe is a critical part of New York State’s and America’s clean energy future,” said Joshua Weinstein, bp’s president of offshore wind Americas.

“Offshore wind can deliver reliable renewable power as well as economic benefits to the state and its communities.”

The Empire Wind 1 and Empire Wind 2 projects recently reached a key federal permitting milestone, having received the federal Record of Decision from BOEM.

Just recently, Empire Wind 1 also received its Article VII Certificate of Environmental Compatibility and Public Need in New York.