Nov 20 (Reuters) - Denmark's Orsted and Eversource Energy's South Fork offshore wind project installed the first of its 12 turbines, New York State Governor Kathy Hochul announced on Monday, moving the country closer to its first wind farm in federal waters.
Last week, the state offered a fresh solicitation as a lifeline to the troubled offshore wind industry which says its existing power sales contracts would not cover the cost of building and financing the projects.
European energy companies Orsted, Equinor and BP have taken a combined $5 billion of writedowns on U.S. offshore wind projects that are not even completed.
The New York State Energy Research and Development Authority (NYSERDA) said that the South Fork Wind project will produce clean power for around 70,000 Long Island homes and support New York's goal to develop 9,000 megawatts (MW) of offshore wind by 2035.
The 132-MW project, located 35 miles (56 km) east of Montauk Point in New York, is expected to enter service in early 2024, and all 12 Siemens Gamesa wind turbine generators are projected to be installed by the end of 2023 or early 2024.
In recent months, rising materials costs, high interest rates, and supply chain delays have prompted project developers to cancel or try to renegotiate power contracts for the first commercial-scale wind farms in the United States, with operating start dates between 2025 and 2028.
On Nov. 30, New York will issue a new offshore wind solicitation open to all bidders, including those with existing contracts, allowing the companies to re-offer their planned projects at higher prices and exit their old contracts.
The offshore wind projects that the companies are developing are Orsted's 924-MW Sunrise, and the joint venture between Equinor and BP's 816-MW Empire Wind 1, 1,260-MW Empire Wind 2 and 1,230-MW Beacon Wind. (Reporting by Sherin Elizabeth Varghese and Deep Vakil in Bengaluru; Editing by Stephen Coates)