Bloomberg News by Josh Saul 1/3/2024
BP Plc and Equinor ASA have terminated their power agreement with New York state for a 1.3-gigawatt wind farm in the Atlantic Ocean, blaming changing economic circumstances that made the Empire Wind 2 project unviable.BP Plc and Equinor ASA have terminated their power agreement with New York state for a 1.3-gigawatt wind farm in the Atlantic Ocean, blaming changing economic circumstances that made the Empire Wind 2 project unviable.
The companies said they plan to seek new offtake opportunities, according to a statement Wednesday. BP and Equinor were among a group of developers that were rebuffed in October after asking state regulators for higher rates to deliver power from offshore wind farms.
The rejection was just the latest blow to the US offshore wind industry, which is struggling to adjust to rising inflation, supply-chain issues and other factors that have driven up costs. Many projects are in jeopardy as developers are forced to recalculate the numbers for proposals originally modeled years ago.
“It appears that the economies of scale just aren’t enough to help these projects amid these macroeconomic events,” said Timothy Fox, an analyst at ClearView Energy Partners. “All those projects were on the bubble, so it’s not surprising that Equinor and BP want to reduce some of the risk they’re facing.”
More:
https://financialpost.com/pmn/business-pmn/bp-equinor-tear-up-contract-for-big-new-york-offshore-wind-project
