By Will Wade and Millicent Dent
“The actions we take today will be the most consequential of my administration,” Cuomo said Thursday at a press conference, where he was joined on stage by former U.S. Vice President Al Gore. “They literally will determine the future, or the lack thereof.”
The contracted wind farms will be completed by 2024, he said. Based on cost estimates from BloombergNEF, the projects may be valued at more than $5 billion.
The Orsted-Eversource joint venture, Sunrise Wind, will provide 880 megawatts from a site about 30 miles (48 kilometers) east of Montauk Point — adjacent to the South Fork Wind Farm and Revolution Wind projects the two companies are also jointly developing. Equinor will generate 816 megawatts from its Empire Wind project, about 20 miles south of Long Island, east of the Rockaways.
Shares of Springfield, Massachusetts-based Eversource gained 1.3% to a record $78.40 at the close in New York.
Construction will begin in the early 2020s pending permits, said Thomas Brostrom, chief executive officer of Orsted Americas. “We have to go flying out of the gates to have service by 2024,” he said. Siemens Gamesa Renewable Energy SA is set to supply the turbines for the Orsted-Eversource project, the company said in a statement.
The contracts — requiring utilities to buy power from the wind projects — have proven crucial to the financing and development of offshore wind power in the U.S. Analysts have projected that the business could grow into a $70 billion industry along the East Coast, where states from New York to Massachusetts to New Jersey are holding auctions.
New York’s contracts were so sought-after that project developers spent months wooing officials in the state with promises of jobs, training programs and port upgrades leading up to the auction results.
Erecting wind mills in the ocean remains one of the most expensive ways to generate electricity. But costs are falling, and states see the technology as key in bringing clean energy to densely populated coastal areas. The U.S. government has leased more than a dozen sites to develop projects in the Atlantic from North Carolina to Massachusetts. New York’s request for bids drew offers from four developers who have building sites off Massachusetts, Rhode Island, New York and New Jersey.
In June, New Jersey awarded a contract to Denmark-based Orsted to supply 1,100 megawatts of offshore wind at an initial cost of $98.10 a megawatt-hour. That’s roughly triple the average wholesale power cost in the region.
Excluding subsidies, the cost of offshore wind power have plunged 64% since 2012 to a global average of $89 a megawatt-hour last year, according to BloombergNEF. That’s still more than double the $35 a megawatt-hour that New York City has paid on average for wholesale power over the past five years, according to data compiled by Genscape.