Fresh Air: NY Revises Contracts to Bolster Offshore Sunrise Wind Farm Developers

New York State has conditionally awarded new contracts to the developers of offshore wind farms with the goal of countering headwinds that the industry has faced since South Fork Wind went online.

The 25-year contracts cover the 840-megawatt Empire Wind 1 planned by Equinor for 15 miles off the coast of Long Beach and the 924-megawatt Sunrise Wind, a project that South Fork Wind developers Ørsted and Eversource planned for near that recently completed wind farm about 30 miles off the coast of Montauk Point. Part of the agreements entail increasing customer’s monthly bills 2%, or about $2 — up from 73 cents under the prior agreement.

“Offshore wind is foundational to our fight against climate change, and these awards demonstrate our national leadership to advance a zero-emissions electric grid at the best value to New Yorkers,” Gov. Kathy Hochul said on Feb. 29.

The Biden administration is seeking to establish a carbon-free electric grid by 2035 and the state aims to have 70% of its electricity sourced from renewable energy in the next six years. Environmentalists have cheered the push for green energy and union leaders tout the economic benefits of creating hundreds of jobs, but commercial fishing groups have decried the impact on their industry.

“They are stealing our fishing grounds by placing them on our place of work,” Bonnie Brady, a Montauk resident and executive director of the Long Island Commercial Fishing Association who has been a vocal critic of offshore wind farms, previously told Dan’s Papers. “They are industrializing the ocean floor.”

In Maine, wind farm developers have responded to similar concerns from the lucrative lobster industry by proposing the nation’s first floating wind farm that proponents say would not have as big of an impact on marine life.

The development in New York comes months after Ørsted executives questioned the viability of Sunrise Wind amid supply chain issues driving up costs and state regulators initially declined a request to increase how much utility customers are charged for the projects. Following that setback — and the cancellation of other offshore wind contracts in other states — Ørsted recently bought out Eversource from Sunrise Wind.

Now, the burgeoning industry is looking to advance after the last of South Fork Wind’s 12 turbines were recently completed, with the project expected to soon be fully operational and powering 70,000 Long Island Power Authority customers across the Hamptons. It is the state’s first offshore wind farm and is considered the nation’s first utility-scale offshore wind farm.

Once completed, Sunrise Wind, which will power 600,000 home and businesses, will be the largest offshore wind farm in the nation. The transmission line for Sunrise Wind is expected to come ashore at Smith Point on Fire Island.

“We are excited to see Equinor and Ørsted and Eversource step up now and get these projects energized in the near term,” New York State Energy Research and Development Authority President and CEO Doreen M. Harris said. Under the new contracts, NYSERDA will also make payments intended to encourage the projects, which are expected to ramp up activity this year, officials said.

“With the selection of Sunrise Wind, New York’s offshore wind story is set to enter a new chapter of large-scale job creation and economic development,” said David Hardy, Ørsted Group executive vice president and CEO Americas. “We’re ready to build on the foundation we’ve laid with New York’s first offshore wind project, South Fork Wind.”Sunrise Winds’ backers invested $10 million to development of New York’s National Offshore Wind Training Center on Long Island, invested $5 million in a research partnership with Stony Brook University and establishing an operations and maintenance hub in East Setauket and harbor facility in Port Jefferson to support wind farm operations and the long-term associated operations and maintenance jobs.

Long Island labor leaders welcomed the news as well, as officials said the projects will invest $135 million combined in electric grid infrastructure on Long Island and $200 million in transmission related investments, backed by a Project Labor Agreement with Long Island skilled tradesmen and women, including heavy equipment operators, electricians, and line workers..

“The 800 family-sustaining building trades construction jobs that will be created as a result of this solicitation will truly move the economic needle here on Long Island,” said Matthew Aracich, president of the Building and Construction Trades Council of Nassau and Suffolk Counties. “The opportunity provided by the offshore wind industry will allow the Building Trades to provide our pathway from community member to apprentice to journeyman for years to come. This pipeline provides a real path to the middle class for our local residents.”

Environmental advocates cheered the progress being made toward the goal of economy-wide carbon neutrality by mid-century by reducing greenhouse gas emissions and improving air quality.

“The selection of Sunrise Wind and Empire Wind clearly signals that New York is committed to advancing offshore wind and continuing our renewable energy revolution,” said Adrienne Esposito, executive director of the Farmingdale based nonprofit Citizens Campaign for the Environment.Sunrise Wind will now begin finalizing its agreements with NYSERDA on the Offshore Wind Renewable Energy Certificates (OREC) contract and will begin construction once it has received all federal permits, which are this summer. Ørsted said the final investment decision on Sunrise Wind is expected to be made in the second quarter of 2024. Although Ørsted is acquiring Eversource’s 50 percent ownership share in Sunrise Wind, pending regulatory approvals, Eversource will remain contracted to lead the project’s onshore construction.

Eversource Energy Chairman, President and Chief Executive Officer Joe Nolan said: “We’re excited to get shovels in the ground and begin the full scope of onshore construction.”