Equinor, BP Terminate Offshore Wind Power Sale Contract With New York

Energy giants Equinor ASA EQNR and BP plc BP have terminated their Offshore Wind Renewable Energy Certificate (OREC) Agreement with the New York State Energy Research and Development Authority (NYSERDA).

The agreement is for the Empire Wind 2 project, an offshore wind project in the U.S. with potential generative capacity of 1,260 MW.

Economic reasons, including inflation, interest rates, and supply chain disruptions, have led to the parties deciding to call off the project.

"Commercial viability is fundamental for ambitious projects of this size and scale," said Molly Morris, president of Equinor Renewables Americas. "The Empire Wind 2 decision provides the opportunity to reset and develop a stronger and more robust project going forward."

However, the sale agreement for the 816-MW Empire Wind 1 remains active, said a spokesperson for Equinor to Reuters.

The report noted the progress of offshore wind energy projects, touted as a major way for states to meet their goals to decarbonize the power grid, slowed in 2023 as developers backed off from contracts to sell power in Massachusetts, Connecticut, and New Jersey due to surging inflation.

The U.S. is an attractive growth market for Equinor, with an ambition to install 12-16 GW of renewables capacity globally by 2030.

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Price Action: EQNR shares closed higher by 2.06% at $32.13 on Wednesday.