Equinor and bp Terminate Empire Wind 2 OREC Agreement Amid Economic Challenges

Equinor and bp Terminate Empire Wind 2 OREC Agreement Amid Economic Challenges

(IN BRIEF) Equinor and bp have jointly decided to terminate the Offshore Wind Renewable Energy Certificate (OREC) Agreement for the Empire Wind 2 project, an offshore wind endeavor in the US capable of generating 1,260 MW of power. The move comes in response to shifting economic conditions across the industry, including factors such as inflation, interest rates, and supply chain disruptions, which rendered the existing OREC agreement unviable. Despite this decision, Equinor and bp remain committed to offshore wind’s potential in the energy mix and aim to continue contributing significantly to the state and local economy. The termination will allow for the project’s repositioning and development under more favorable circumstances, ensuring its long-term viability.

(PRESS RELEASE) STAVANGER, 4-Jan-2024 — /EuropaWire/ — Equinor and bp announced an agreement with the New York State Energy Research and Development Authority (NYSERDA) to terminate the Offshore Wind Renewable Energy Certificate (OREC) Agreement for the Empire Wind 2 project, an offshore wind project in the US with potential generative capacity of 1,260 MW.

This agreement reflects changed economic circumstances on an industry-wide scale and repositions an already mature project to continue development in anticipation of new offtake opportunities. The decision recognizes commercial conditions driven by inflation, interest rates and supply chain disruptions that prevented Empire Wind 2’s existing OREC agreement from being viable.

Equinor and bp believe offshore wind can be an important part of the energy mix and are committed to maintaining substantial contributions to the state and local economy.

“Commercial viability is fundamental for ambitious projects of this size and scale. The Empire Wind 2 decision provides the opportunity to reset and develop a stronger and more robust project going forward,” said Molly Morris, president of Equinor Renewables Americas. “We will continue to closely engage our many community partners across the state. As evidenced by the progress at the South Brooklyn Marine Terminal, our offshore wind activity is ready to generate union jobs and significant economic activity in New York.”

“bp is supportive of NYSERDA’s leadership and commitment to offshore wind, which we believe is a critical part of New York State’s and America’s clean energy future,” said Joshua Weinstein, bp’s president of offshore wind Americas. “Offshore wind can deliver reliable renewable power as well as economic benefits to the state and its communities.”

The Empire Wind 1 and Empire Wind 2 projects recently reached a key federal permitting milestone, having received the federal Record of Decision from BOEM; last month, Empire Wind 1 also received its Article VII Certificate of Environmental Compatibility and Public Need in New York.

About Empire Wind

Empire Wind is being developed through a 50-50 joint venture between Equinor and bp. Empire Wind is located 15-30 miles southeast of Long Island and spans 80,000 acres, with water depths of between approximately 75 and 135 feet. The lease was acquired in 2017. The project’s two phases, Empire Wind 1 and 2, have a potential capacity of more than 2 GW (816 + 1,260 MW), visit www.empirewind.com

About Equinor Renewables Americas

Equinor is one of the largest offshore wind developers in the world. Its work in the United States includes operating two lease areas off New York, Empire Wind and Beacon Wind. Equinor has also been awarded a lease on the Outer Continental Shelf off California. The United States is an attractive growth market for Equinor, with an ambition to install 12-16 GW of renewables capacity globally by 2030.

About bp

bp’s ambition is to become a net zero company by 2050 or sooner, and to help the world get to net zero. We’re transforming bp from an international oil and gas company to an integrated energy company – and America is core to the strategy. bp has a larger economic footprint in the United States than anywhere else in the world, investing more than $145 billion since 2005 and supporting more than 275,000 jobs. For more information on bp in the US, visit www.bp.com/us

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SOURCE: Equinor ASA