Ørsted and Eversource’s Sunrise Wind project has been awarded the right to negotiate a 25-year Offshore Wind Renewable Energy Certificate (OREC) agreement for an offshore wind farm with a maximum capacity of 924 megawatts (MW) by the New York State Energy Research and Development Authority (NYSERDA).

It was announced by Ørsted on Thursday afternoon.

The price per megawatt for the power generated by Sunrise Wind will be announced once negotiations are finalized. When signed, the contract will replace the existing OREC agreement awarded to Sunrise Wind in 2019.

David Hardy, Ørsted’s Regional Director for the Americas, said the New York 4 auction is a testament to the state’s ability to respond quickly to the unprecedented macroeconomic developments that fundamentally changed the economics of the first wave of offshore wind projects in the US and threatened the state’s transition to green energy.

”With today’s award of this contract at a price level that reflects current component and financing costs, Sunrise Wind is well positioned to produce green energy for New York,” Hardy said in the announcement.

Jacob Pedersen, Head of Research at Sydbank, has previously highlighted the Sunrise project as important:

”Ørsted is not out of the woods in the US, however, as the Sunrise project not being approved in the New York 4 auction would trigger impairment charges of DKK 5.5 billion, and a subsequent likely cancellation of the project would result in costs of DKK 6-7 billion,” Pedersen has previously said.

Sunrise Wind is expected to be completed in 2026, subject to the outcome of the upcoming OREC negotiations, necessary regulatory approvals and Ørsted’s final investment decision, which is expected to be made in Q2 2024.

Ørsted will take full ownership of Sunrise Wind from Eversource, which currently owns half of the project, subject to the signing of the OREC agreement, completion of the full transaction agreements with Eversource, approval of the construction and operation plan, and relevant regulatory approvals.

(Translated using DeepL with additional editing by Jakob Skovlund)