Equinor secures landmark offshore wind agreement FinanceAffairs.com

Equinor secures landmark offshore wind agreement  FinanceAffairs.com

The New York State Energy Research and Development Authority (NYSERDA) today announced Equinor's Empire Wind 1 project as one of the winners of its fourth offshore wind bidding round, Equinor said in a statement.

This award is an important milestone in the progress of the project, which can deliver 810 megawatts of renewable energy to New York.

“Empire Wind 1 is a very mature offshore wind project that aims to deliver first power to New York in 2026.”

Equinor will now negotiate a final power sales agreement with NYSERDA. This is expected to be completed by the second quarter of this year.

– Today's award is an important milestone in our work to maximize value creation from Empire Wind 1, which is currently one of the largest and most mature renewable energy projects in the USA, commented Renewable Energy Director Pål Eitrheim at Equinor.

-The award allows our large-scale project to contribute to New York's climate ambitions, in a growth market that has demonstrated a strong commitment to offshore wind.

According to Etterheim, the project will mature towards a final investment decision during the third quarter of this year. It is estimated that the nominal return on equity over the life of Equinor's investments in offshore wind energy on the US East Coast will be 12 to 16 percent.

“We intend to sell ourselves to a new partner at the appropriate time to increase value and reduce our exposure,” Etterheim says in the letter.

100 percent ownership

Empire Wind 1 has already achieved several important milestones. On January 25, 2024, Equinor announced an agreement with BP, whereby Equinor will gain full ownership of the Empire Wind license and projects. Previously, the energy company's ownership stake was 50 percent, which now means that the company's investments are increasing.

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For its part, BP will take full ownership of the Beacon Wind license and projects. This transaction is subject to regulatory approval, and the transaction is expected to be completed in the second or third quarter of 2024.

Equinor has not disclosed the guaranteed price the company received from authorities for Empire Wind 1. However, government agency Nyserda says in a press release that this project and Ørsted's Sunrise Wind, which also received a new contract, have an average price. At $150.15 per megawatt hour.

Hanisi Anenih

Hanisi Anenih

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