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Biden Administration Greenlights BP-Led Offshore Wind Project

The U.S. federal government has given the go-ahead to the sixth offshore wind power project in the country this week.

The Empire Wind project is led by BP and Equinor will be located off the coast of New York and New Jersey and, according to the Department of the Interior, will have the capacity to power more than 700,000 homes.

The two sets of wind turbines—Empire Wind 1 and Empire Wind 2—will have a capacity of over 2 MW and are scheduled to enter into operation in 2026 and 2027, respectively.

The federal government’s approval follows an attempt by BP and Equinor to negotiate higher prices for the electricity Empire Wind will produce with the New York authorities. The state, however, refused to hike the price it was willing to secure for the electricity produced at the two wind farms. Those additional subsidies would have cost New Yorkers an extra $12 billion, the New York Times reported in October.

Following the New York Governor’s refusal to grant additional support for the wind farms, BP and Equinor announced a writedown of $840 million on the projects. It remains unclear whether the Empire Wind 1 and 2 will go ahead at all, given that the costs of building them is currently higher than the price secured for the electricity they would generate if completed.

However, the state of New York is not giving up on its offshore wind ambitions. It will hold a new wind power tender at the end of this month, expecting bids in January next year. The tender will be open to all bidders, including companies with existing contracts with the state, such as BP and Equinor. This, Reuters reported, would allow them to resubmit their bids with higher prices.

The Biden administration has a target of 30 GW of offshore wind power capacity by 2030, from close to zero to date.

By Irina Slav for Oilprice.com

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