South Brooklyn Marine Terminal (SBMT), built in the 1960s and once an active container terminal and general cargo facility in the Upper New York Bay, is transforming into a support hub for the development of offshore wind along the US Atlantic coast. 

Norwegian utility company Equinor and British oil and gas company BP, which are developing offshore wind projects off the New York coast, signed an agreement in March 2022 to transform the terminal into an operations and maintenance base. The two companies have a 50:50 stake.

Advertisement

According to the New York City Economic Development Center, the terminal will become a hub to support the Empire Wind and Beacon Wind offshore wind farms being developed by Equinor and BP. 

“New York has shown unflagging determination to become a focal point of the region’s offshore wind industry and this agreement offers tangible evidence that this vision is quickly coming to life,” Siri Espedal Kindem, president of Equinor Wind US, said in a statement on March 3.

Both companies said in a statement that they will co-invest between $200m and $250m in infrastructure upgrades of SBMT, adding more than 1000 direct and indirect jobs annually to the region. Both expect that its 73-acre site (295 square kilometres) will become one of the largest offshore wind port facilities in the US. 

Equinor adds that its efforts at the SBMT are “progressing well” and the construction will start when relevant permits are secured.

The two companies have contracts for three offshore wind projects in New York, totalling more than three gigawatts (GW) of energy by 2030. In June, they also announced the launch of a New York-based Offshore Wind innovation hub to facilitate start-ups in the offshore wind industry. 

New entrants

Advertisement

“Offshore wind is a nascent industry in the US,” says Samantha Woodworth, senior research analyst at consultancy Wood Mackenzie. 

New York State has five offshore wind projects in development: Beacon Wind, Empire Wind 1 and 2, Sunrise Wind, and South Fork Wind Farm; only the 132-megawatt South Fork project is under construction. Beacon and Empire Wind 1 projects, which will be operated by BP and Equinor jointly, are going through a permitting process and are expected to be operational in 2028 and 2026 respectively.

Ms Woodworth adds that New York is well positioned for offshore wind, with average wind speeds of between 9.6 miles per hour (mph) and 12.9mph.

“Long Island, a densely populated island in south-eastern New York, and New York City are significant load centres, meaning that their electricity demand is very large. Coincidentally, those are also the locations where the transmission lines from these offshore projects will make landfall, so the power can be directly used to service that demand,” she says. 

She expects that the offshore wind farm in New York City will grow rapidly, driven by decarbonisation goals and funding. “The New York state’s offshore wind target, federal support as well as available tax credits, provide administrative support helping projects come to fruition.” 

The state of New York has set a deployment target of 9GW of offshore wind capacity by 2035.  

Under the system, the federal tax credit provision for offshore wind farms provides a rebate of up to 30% for offshore wind projects that begin construction before January 1, 2026.

This article first appeared in the December 2022/January 2023 print edition of fDi Intelligence. View a digital edition of the magazine here.