Seatrium suffers NY offshore wind substation cancellation blow
Seatrium suffers NY offshore wind substation cancellation blow | Windpower Monthly
The cancellation follows a decision by project developers Equinor and BP to scrap their offshore wind renewable energy certificate (Orec) deal with New York state amid cost pressures.
Construction work on the Empire Wind 2 OSS platform was expected to start in June 2024. Minimal engineering work has been performed to date.
“Seatrium will avail construction capacity set aside for this project to other projects in the pipeline,” the firm said, adding that payment for the work performed to date has been received.
The contract cancellation is “not expected to have material financial impact” on Seatrium’s earnings per share and net tangible asset per share in the current financial year, the company said.
Seatrium’s contract for the 816MW Empire Wind 1 project remains unaffected and continues as planned, it noted. Construction work on the OSS platform for that project started in the last quarter of 2023.
Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.