The U.S. Department of the Interior has granted approval for the Empire Wind offshore project, a joint venture between Equinor and BP, marking the sixth commercial-scale wind farm greenlit under President Joe Biden's administration. The move aligns with the government's ambitious goal of deploying 30,000 megawatts (MW) of offshore wind along U.S. coastlines by 2030.
Empire Wind comprises two offshore wind farms, Empire Wind 1 (816 MW) and Empire Wind 2 (1,260 MW), strategically located about 12 nautical miles south of Long Island and approximately 17 nautical miles east of Long Branch, New Jersey. The combined 147 turbines are anticipated to generate renewable power for over 700,000 homes annually, contributing to New York state's objective of developing 9,000 MW of offshore wind by 2035.
Despite the approval, the offshore wind industry is grappling with construction and financing cost challenges. Equinor and BP, along with Orsted, have incurred a combined $5 billion in writedowns on U.S. offshore wind projects. The industry contends that existing power sales contracts do not cover the rising costs. A potential solution may arise from a new auction planned by New York state on November 30, allowing companies to re-offer their planned projects at higher prices and exit old contracts.
Empire Wind 1 is slated to commence production in 2026, followed by Empire Wind 2 a year later, as outlined by the New York State Energy Research and Development Authority. However, both Equinor and BP have recently booked impairments of $300 million and $540 million, respectively, on their New York projects after the state's regulator rejected their request to renegotiate power supply terms.
The Interior Department's approval underscores progress toward expanding offshore wind capacity in the U.S., though industry players continue to navigate financial challenges in this rapidly evolving sector.
