( Oil Price) – Equinor has secured a project financing package of over $3 billion for its U.S. offshore wind project Empire Wind 1, Norway’s energy major said on Thursday.
Empire Wind 1 is planned to power 500,000 New York homes and is expected to reach its commercial operation date in 2027. With a contracted capacity of 810 megawatts (MW), Empire Wind 1 will be the first offshore wind project to connect into the New York City grid.
Equinor expects the total capital investments in the project, including fees for the use of the South Brooklyn Marine Terminal (SBMT), would be around $5 billion, including the effect of expected future tax credits (ITCs).
In the middle of 2024, Equinor announced the execution of the Purchase and Sale Agreement (PSA) with the New York State Energy Research and Development Authority for Empire Wind 1 power for 25 years at a strike price of $155.00 per MWh. The investment level and support framework are in line with the developing US offshore wind industry, said the Norwegian company.
Equinor plans to farm down a stake in Empire Wind 1 to a new partner to further enhance value and reduce its exposure, the energy major said today, as big international oil and gas firms are scaling back or streamlining their investments in renewables.
For example, BP announced last month that it decided to merge all its offshore wind business into a new joint venture with Japan’s energy firm JERA, to which the companies will provide up to $5.8 billion for investments by 2030.
BP has been seeking for months to offload spending on project developments in the offshore wind sector, including by studying ideas to sell a small stake in the business.
In the United States, offshore wind faces an uncertain future under Donald Trump’s second-term administration. The President-elect has criticized offshore wind as the most expensive form of energy which, Trump says, also ruins the environment.
By Charles Kennedy for Oilprice.com
