Denmark's Orsted and Eversource Energy's South Fork offshore wind project achieved a significant milestone with the installation of the first turbine, as announced by New York State Governor Kathy Hochul on Monday. This development marks a crucial step forward for the United States in establishing its inaugural wind farm in federal waters.
The milestone comes in the wake of a recent solicitation by the state, providing a lifeline to the offshore wind industry facing challenges. Industry leaders, including European energy companies Orsted, Equinor, and BP, have collectively taken $5 billion in writedowns on U.S. offshore wind projects that are still under construction.
The New York State Energy Research and Development Authority (NYSERDA) stated that the South Fork Wind project is poised to generate clean power for approximately 70,000 homes on Long Island, contributing to New York's ambitious goal of developing 9,000 megawatts (MW) of offshore wind by 2035.
Anticipated to commence service in early 2024, the 132-MW project is situated 35 miles east of Montauk Point in New York. All 12 Siemens Gamesa wind turbine generators are expected to be installed by the end of 2023 or early 2024.
However, the offshore wind industry has faced headwinds, with rising materials costs, high interest rates, and supply chain delays leading to canceled or renegotiated power contracts for several commercial-scale wind farms in the United States. The challenges are particularly evident in projects with operating start dates between 2025 and 2028.
In response, New York plans to issue a new offshore wind solicitation on November 30, open to all bidders, including those with existing contracts. This move allows companies to re-offer their planned projects at potentially higher prices, offering a solution to navigate the current industry landscape.
Among the offshore wind projects under development are Orsted's 924-MW Sunrise, and the Equinor-BP joint venture's 816-MW Empire Wind 1, 1,260-MW Empire Wind 2, and 1,230-MW Beacon Wind.