Great Lakes Dredge & Dock announced the termination of its rock-installation contract for an offshore wind project, highlighting the challenges faced in the alternative-energy sector.
Contract Details
In 2022, Great Lakes was hired to perform rock-installation work for the Empire Wind I and II projects, which were scheduled for installation in 2025 and 2026 respectively.
While the termination of the Empire Wind II project incurs a termination fee for Great Lakes and its partner, Van Oord, to compensate for the lost earnings potential, Empire Wind I remains unaffected.
Commitment to Clean Energy Goals
Eleni Beyko, Senior Vice President of Offshore Wind at Great Lakes, emphasized New York's unwavering commitment to achieving its clean energy objectives. Beyko noted that the state has taken proactive measures by accelerating solicitations for new Power Purchase Agreements (PPAs). This allows developers to adjust prices for inflation and develop more robust projects in the future.
Reasons for Termination
Equinor and BP, the developers responsible for Empire Wind II, decided to cancel their agreement with the state of New York. They cited inflation, interest rates, and supply-chain disruptions as major factors that rendered the agreement unviable.
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