It may seem strange to lead an issue of Rethink Energy with a simple order story, but New York has been bold where other US States behave as if they are dancing on eggshells, by placing two massive orders worth 1.7 GW of offshore wind from two Scandinavian players, Ørsted from Denmark and Equinor from Norway. The two deals are expected to cost in the region of $6 billion to build out and be completed in 2024 and 2025.
The language doesn’t quite say that there is a deal in place, but both have been selected to go ahead and negotiate terms with the New York State Energy Research and Development Authority (NYSERDA) – Ørsted for its Sunrise Wind partnership with US energy provider Eversource and Equinor on its own with its Empire Wind and they will both now receive offshore wind energy certificates which will make funding the exercise pretty easy and on the right terms.
The US has only added 6 GW to 7GW a year in wind energy for the past two years, and that has all been onshore. The sudden “setting fire” of everyone’s US order books looks like accelerating Wind power in the US by at least a factor of 2 or 3 in the coming years. This sudden market visibility of East Coast state commitments with around 18.5 GW promised across Eastern states by 2030. This in turn will generate economies of scale, slash pricing and likely drive sustained momentum to the region and create a public awareness around offshore wind.
The Ørsted deal is for a wind farm with a capacity of 880 MW, and the Equinor deal for 816 MW.
Both of these projects will bring jobs, jobs, jobs to the East Coast region, and as renewable expertise grows, so too will resistance to renewable projects of size start to shrink. We cited the Governor of Massachusetts a few weeks ago talking up Offshore wind and the jobs it brought his region, and now New York has trumped his order in size, and ambition. Collectively this region of the US will now accelerate and become a major global center for offshore wind, and potentially for floating wind.
By 2035 New York has promised to build 9 GW of similar offshore wind ,most of it by 2030, and unlike California and other parts of the US, it has clearly managed to overcome obstacles sooner, rather than later, and just get on with it. That may have something to do with New York not having to deal with the uncertainties of floating wind in the first instance, but have placed its faith in fixed bottom offshore – with both projects, Sunrise Wind and Empire Wind, being off the east coast of Long Island.
This will not spoil the aspect of the famous Hamptons beaches – the wind farms are far enough away from the island for them not to be visible from the shore, and some of them are towards the far end – some 100 miles or more to the east of the Hamptons. The Island is no stranger to massive engineering projects, it was an inaccessible island until Brooklyn Bridge was built in 1883, and it now has multiple bridges and tunnels, and those famous beaches were created by shipping millions of tons of sand from remote equatorial islands.
The Ørsted statement said that Sunrise Wind will construct an operations and maintenance hub in Port Jefferson, Long Island, plus port upgrades and establish offshore wind training programs in the state of New York and will
explore transmission partnerships with the New York Power Authority (NYPA) and the leading New York utility Con Edison. The wind farm is expected to be operational in 2024.
Ørsted mentioned its existing South Fork wind farm which brings it up to 1,000MW capacity with Sunrise Wind and across the North East a total of 1.7 GW including its 700 MW Revolution Wind in Rhode Island and Connecticut. The deal comes less than a year after merging Ørsted US with Deepwater Wind.
The new Ørsted deal will all go with Siemens Gamesa 8.0MW turbines with a rotor diameter of 167 meters, which are expected to be market ready during 2022 just in time for the completion of this project. Ironically GE appears to have no leverage in the New York contracts, despite being the largest US wind turbine player. We suspect that its Haliade-X design was not ready in time for it to be involved in a bid.
Separately Ørsted has also recently landed deals at Ocean Wind 1.4 GW for New Jersey and Bay State Wind which should eventually deliver 2GW offshore wind off the coast of Massachusetts, as well as Garden State Offshore Energy which may go up to 1.2 GW.
It is not known which turbines the Equinor project will use, but it will require between 60 and 80 wind turbines, with a capacity of 10 MW each, which may point to the new GE Haliades-X but more likely the existing Vestas V164, because it is available for order now and for installation from 2021 onwards. This project is not expected to start up until late 2024, so will be around a year behind the Ørsted deal.
These contracts are not big surprises since both companies first established leases of the sea in the New York Bight area over a year ago.
Equinor says its project will create 800 local jobs during construction and operation and will include the creation of locally manufactured turbine foundations in New York’s Capital Region.
Equinor will also invest over $60 million in port upgrades in New York that will support future offshore wind projects and will commit at least $4.5 million in community benefits and workforce development.