2 days Ago By Tina Casey
Some investors are clearly nervous about the potential for the incoming Trump administration to send the domestic offshore wind industry into a tailspin. That group apparently does not include Equinor and its investors. The company has wasted no time nailing down more than $3 billion in financing for the construction of new seaport facilities in New York City, to support the construction of its massive Empire Wind 1 offshore wind project.
It’s no secret that President-elect Trump has the US offshore wind industry on his naughty list, having campaigned vociferously against wind energy in 2016 and again last year. So far, though, nothing of consequence can be attributed to his campaign rhetoric, onshore or offshore. Nothing also came of a legal challenge launched by one of his namesake golf courses several years ago, aimed at thwarting an offshore project in Scotland .
In fact, Trump’s first administration can be credited with fine-tuning a new, streamlined permit process that set the table for the torrent of offshore wind projects set in motion during the Biden presidency. So much for ending offshore projects “on day one.” With that in mind, let’s take a look at the latest news from Equinor.
The new $3 billion in financing represents a significant slice of the expected total of $5 billion in capital investments for the new wind hub, which includes fees for use of the South Brooklyn Marine Terminal as a staging and pre-assembly site. I got a bird’s eye view of the SBMT sute a couple of weeks ago when visiting a Industry City just across the way, and the photos only hint at the gigantic scale of the project. “Swarming with activity” is also pretty weak tea when you’re looking at 73 acres’ worth of nonstop multilevel activity.
It’s difficult to imagine that Equinor or its hosts — Brooklyn, New York City, and New York State — would simply roll over and abandon this once-in-a-generation construction project. Anyways, President-elect Trump will be out of office in four years, while Equinor is banking on the new SMBT wind hub to support offshore wind development along the Atlantic coast for decades to come. That could explain why Equinor exited the 1,260-megawatt Empire Wind 2 project earlier this year while retaining its interest in building the new wind terminal.
A groundbreaking ceremony for the new SBMT was held in June. In a press statement issued earliervthis week, Equinor’s acting EVP for Renewables, Jens Økland, affirmed that the financing represents a significant step in the company’s plans for Empire Wind 1, though he did not list the lenders by name. “Due to strong interest from lenders, the Empire Wind 1 project was able to secure competitive terms.
The final group of lenders includes some of the most experienced lenders in the sector along with many of Equinor’s relationship banks,” Equinor emphasized. Trump or no Trump, Equinor is having a rather different experience than earlier US wind developers encountered. Specifically, the Cape Wind project in Massachusetts was first proposed almost 25 years ago, in 2001, only to spend 10 years wandering in the doldrums before the US Army Corps of Engineers finally gave it the green light in 2011.
That was just the beginning of the troubles. Lawsuits ensued, and the developers finally relinquished their offshore lease in 2018 without ever putting a single shovel in the ground. In the meantime, the wheels were already in motion to provide a more predictable regulatory environment for offshore wind development.
In 2009 federal lease authority was transferred from the Army Corps of Engineers to the newly formed Bureau of Ocean Energy Management in the Department of the Interior. As a result, Equinor currently expects Empire Wind 1 to begin delivering power in 2026, about nine years after the company acquired its lease. Having the firm support of the host jurisdiction is another key difference.
For a look at what can go wrong, consider the case of New Jersey. The state legislature set a friendly table for renewable energy developers back in 2010, but then-governor Chris Christie had other ideas. Christie “unilaterally killed the $9 billion ARC mass transit project, pulled New Jersey out of the Regional Greenhouse Gas Initiative, dropped the ball on a multi-state electric vehicle initiative, dragged his feet on a new multi-state consortium to develop Atlantic coast offshore wind, and so on and so forth (it’s a long list),” CleanTechnica reported back in 2018.
Those were bad signs for a wind developer called Fishermen’s Energy. The company proposed a wind farm off the coast of New Jersey in 2005, putting the state in the running to host the first commercial wind farm in the US. In 2014 Fishermen’s Energy even won a slice of a $141 million Energy Department grant program in support of innovative technologies in the offshore wind field.
The terms of the grant stipulated a power take-off agreement. However, with Christie winning a second term in office in 2014, the New Jersey Board of Public Utilities was not inclined lay out the red carpet for offshore wind projects. Fishermen’s Energy failed to meet a 2016 deadline and effectively went out of business the following year.
The offshore wind picture remains up in the air for New Jersey, even though current Governor Phil Murphy took office in 2018 with a strong pro-wind platform. Adding to the uncertainty posed by the incoming Trump administration is a supply chain issue encountered by the 2.4-gigawatt Leading Light offshore wind farm.
The project received approval from BPU last year, but developers Invenergy and energyRE have been struggling to nail down contracts with turbine suppliers under the stipulated timeline. Still, signs of progress have been emerging. “Invenergy said it has invested millions of dollars into the project and remains committed to it,” Associated Press reported earlier this week, noting that the developers are seeking an extension to pursue other turbine suppliers .
In addition, work is under way on the necessary onshore transmission and grid connections , with a coastal training center for the New Jersey National Guard to play a key role. If all goes according to plan, the training center will shunt about 6 gigawatts’ worth of offshore wind power to the PJM wholesale electricity market, so stay tuned for more on that. Follow me via LinkTree , or @tinamcasey on LinkedIn and Bluesky.
Photo: Equinor has taken steps to ensure that work continues on its new offshore wind hub in Brooklyn, regardless of uncertainty posed by the incoming Trump administration (original photo by Tina Casey). CleanTechnica's Comment Policy LinkedIn WhatsApp Facebook Bluesky Email Reddit.
