Developers behind a proposed offshore wind farm 20 miles from Long Beach on Long Island said Wednesday they were terminating the project due to economic headwinds, including inflation, higher interest rates and supply chain disruptions.
Equinor and BP, the companies leading the “Empire Wind 2” project, said in a statement those hurdles meant the project was no longer “viable.” It was slated to feature about 130 turbines generating 2.1 gigawatts of electricity, or enough to power 1 million homes.
“Commercial viability is fundamental for ambitious projects of this size and scale,” Equinor President Molly Morris said. “The Empire Wind 2 decision provides the opportunity to reset and develop a stronger and more robust project going forward.”
The cancellation comes less than three months after New York utility regulators denied customer rate hikes requested by Equinor, BP and wind giant Orsted, Reuters reported. Morris said at the time the state was undermining its own mandate of generating 70% of its electricity from renewable sources, such as wind and solar, by 2030.
The project also faced pushback from Long Beach residents and elected officials who said the developers didn’t do enough community outreach and the wind farm would have harmed local tourism and enjoyment of parklands because a transmission line needed to be built under Long Beach.
Meanwhile, Orsted in November scrapped plans to build two offshore wind projects in New Jersey, citing similar macroeconomic factors as Equinor and BP cited Wednesday. Those projects together would also have generated enough power for about 1 million homes in the state.
But clean energy advocates told Gothamist the terminations are part of growing pains to be expected as part of the region’s larger energy transition.
“In 10 years or so, looking back, this is going to appear like a little bump in the road,” said Gordian Raacke, executive director of advocacy group Renewable Energy Long Island.
“We’re not just building offshore wind farms,” he added. “We’re building an entire new energy paradigm. We’re building entire industries and workforces and supply chains.”
The region recorded some progress in renewables development last month, when Orsted’s South Fork Wind project began generating electricity as the United States’ first large-scale offshore wind farm.
Back in October, New York also tentatively approved three new wind farms off New York City’s shores in hopes of generating about 4 gigawatts of power in 2030. The cost of building those wind farms would add an average of roughly $3 per month to consumer electric bills over the life of the projects, according to Gov. Kathy Hochul.
Now, Raacke said he predicts wind developers will ask the state for permission to charge higher rates in a year to offset additional infrastructure costs.
“That’s part of the dance here,” he said. “It’s a matter of looking at what are the actual additional costs, and then settling on a fair price for everyone.”