Global energy developers Equinor and BP have announced the cancellation of their contract for the Empire Wind 2 project, a massive wind project off the coast of New York. The decision comes as a result of various commercial conditions, including inflation, interest rates, and supply chain disruptions, which made the project financially unviable. Equinor and BP emphasized the importance of commercial viability for such ambitious projects and expressed their commitment to developing a stronger and more robust project in the future.
The cancellation of Empire Wind 2, approved by the Biden administration just weeks ago, raises concerns about the economic feasibility of offshore wind projects. This cancellation follows a similar decision by energy developer Orsted to cancel its Ocean Wind 1 and Ocean Wind 2 projects, which were also endorsed and hailed by the Biden administration. Orsted cited negative economic conditions as the reason for their cancellation.
Empire Wind 1 and 2 were projected to have a total capacity of 2,076 megawatts, enough to power 700,000 homes annually. Empire Wind 2 was expected to contribute the majority of that output with a capacity of 1,260 megawatts. The cancellation of these projects raises questions about the Biden administration’s goal of approving 30 gigawatts of offshore wind energy by 2030.
Interior Secretary Deb Haaland, in approving the Empire Wind projects, previously praised the expansion of the American offshore wind industry under President Biden’s leadership. However, concerns have been raised about the impact of offshore wind projects on the fishing industry.
Despite these setbacks, the Biden administration remains committed to its clean energy goals. In 2021, the administration approved the Vineyard Wind and Southfork Wind projects, the first large-scale offshore wind projects in U.S. history. The approval of the Empire Wind project marked the sixth such approval.
Democratic New York Governor Kathy Hochul and Energy Secretary Jennifer Granholm had previously announced the finalization of contracts between the New York State Energy Research and Development Authority (NYSERDA) and the developers of Empire Wind.
The cancellation of the Empire Wind 2 project highlights the challenges and uncertainties surrounding the commercial viability of offshore wind projects. It raises questions about the feasibility of achieving the Biden administration’s ambitious clean energy goals and underscores the need for careful consideration of economic factors in the development of renewable energy projects.
