Offshore Wind Project Cancels Contract Due to Inflation, After Biden Admin Brags of Project’s Success

The construction of a major wind energy project previously touted by the Biden administration as an example of positive “Bidenomics” has been canceled, with developers citing “inflation, interest rates and supply chain disruptions,” energy developers BP and Equinor announced Wednesday.

BP and Equinor said they canceled the project, dubbed the Empire Wind 2, that was to be built off the shores of New York.

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A press release stated the two companies had reached an agreement with the New York State Energy Research and Development Authority (NYSERDA), to terminate the Offshore Wind Renewable Energy Certificate (OREC) for Empire Wind 2.

“This agreement reflects changed economic circumstances on an industry-wide scale… The decision recognizes commercial conditions driven by inflation, interest rates and supply chain disruptions that prevented Empire Wind 2’s existing OREC agreement from being viable,” Equinor said.

Molly Morris, president of Equinor Renewables Americas, said in a statement the company is open to more economically viable projects in the future.

“Commercial viability is fundamental for ambitious projects of this size and scale. The Empire Wind 2 decision provides the opportunity to reset and develop a stronger and more robust project going forward,” said Morris. “We will continue to closely engage our many community partners across the state.”

The Department of the Interior (DOI) and Department of Energy (DOE) both endorsed the project in November, with the DOI praising President Joe Biden and referring to Empire Wind 1 and 2 as a “Bidenomics” success.

“Under President Biden’s leadership, the American offshore wind industry is continuing to expand rapidly — creating good-paying union jobs across the manufacturing, shipbuilding and construction sectors,” Interior Secretary Deb Haaland said in a November 21 press release.

Haaland added that the project’s approval “adds to the significant progress towards our Administration’s clean energy goals,” and said the department will continue to “expand clean energy development in a manner that will benefit communities, strengthen our nation’s energy security, and address climate change.”

The DOI also bragged in the announcement that “Bidenomics and the President’s Investing in America agenda are growing the American economy from the middle out and bottom up.”

The agency also said the Empire Wind projects support Biden’s green energy goals.

Just six weeks after its approval, Empire Wind 2 failed due to the economics the Biden administration boasted of.

Joshua Weinstein, BP’s president of offshore wind Americas, also made a statement acknowledging the failure.

“BP is supportive of NYSERDA’s leadership and commitment to offshore wind, which we believe is a critical part of New York State’s and America’s clean energy future,” Weinstein said. “Offshore wind can deliver reliable renewable power as well as economic benefits to the state and its communities.”

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The termination also comes shortly after energy company Orsted canceled its own Biden-endorsed projects off the coast of New Jersey, called Ocean Wind 1 and Ocean Wind 2.

“Macroeconomic factors have changed dramatically over a short period of time, with high inflation, rising interest rates, and supply chain bottlenecks impacting our long-term capital investments,” David Hardy, Orsted’s CEO for Americas, said in an October press release. “As a result, we have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2. We are extremely disappointed to have to take this decision, particularly because New Jersey is poised to be a U.S. and global hub for offshore wind energy.”

Empire Wind 2 was expected to have a generative capacity of 1,260 megawatts.

Neither BP nor Equinor has made a recent public update on the status of Empire Wind 1.