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  • BP, Equinor Scrap NY Offshore Wind Deal // Pattern Energy Wins $11b for SunZia

BP, Equinor Scrap NY Offshore Wind Deal // Pattern Energy Wins $11b for SunZia

Welcome to Grid Brief! Here’s what we’re looking at today: more bad news for offshore wind in New York, Pattern Energy makes headway on the SunZia renewable energy project, and more.

BP, Equinor Scrap NY Offshore Wind Deal

BP and Equinor ripped up their contract with New York state for the 1.3 GW Empire Wind 2 project. The companies claimed that the project was no longer viable due to changing economic conditions.

“The two companies were among a group of developers who were rebuffed in October after asking state regulators to adjust their contracts to deliver power from offshore wind projects,” reports Bloomberg.

"Empire Wind 2 has been 'at risk' since the project developers made clear in their June 2023 petition that they would not move forward under the current contract," Timothy Fox, managing director at ClearView Energy Partners, said. Fox also added that “the economies of scale just aren’t enough to help these projects amid these macroeconomic events,” and that “all those projects were on the bubble, so it’s not surprising that Equinor and BP want to reduce some of the risk they’re facing.”

Of the 17.5 GW of offshore wind awarded state contracts in New York, over half are either being disputed or have been outright canceled.

Pattern Energy Wins $11b for SunZia

The SunZia renewable power project has made more progress towards completion after over a decade in wait.

Pattern Energy has begun full construction on the 3 GW SunZia transmission and 3.5 GW SunZia wind projects after securing $11 billion in financing, according to the company’s press release.

“Our hope is this successful financing of the largest clean energy infrastructure project in American history serves as an example for other ambitious renewable infrastructure initiatives that are needed to accelerate our transition to a carbon-free future,” said Hunter Armistead, CEO of Pattern Energy.

In terms of land footprint, Armistead is likely correct: SunZia (1,365 MWe, assuming a 39% capacity factor) is the largest clean energy project in US history. Its two transmission lines will carry power 520 miles from New Mexico to Arizona and California.

But in terms of generation, the largest piece of clean energy infrastructure in America is probably the 3,885 MWe Paolo Verde nuclear power plant in Arizona, which sits on square mileage orders of magnitude smaller than SunZia’s.

Embarked upon in 2009, Pattern Energy expects SunZia to start delivering power by 2026.

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  • Japan continues to free up nuclear. “Japan's Nuclear Regulation Authority (NRA) has decided, at a meeting on 27 December, to lift an administrative order imposed on Tokyo Electric Power Company (Tepco) in 2021 that prohibited the company from moving nuclear fuel or loading it into reactors at the seven-unit Kashiwazaki-Kariwa nuclear power plant,” reports World Nuclear News. “Tepco applied for NRA approval of its design and construction plan for Kashiwazaki-Kariwa units 6 and 7 in September 2013. It submitted information on safety upgrades across the site and at those two units. These 1356 MWe Advanced Boiling Water Reactors began commercial operation in 1996 and 1997 and were the first Japanese boiling water reactors to be put forward for restart.”

  • FERC OKs ISO-NE’s auction delay. “The Federal Energy Regulatory Commission (FERC) has granted a request by New England's grid operator and a regional utilities association to postpone their 2025 forward capacity auction by a year,” reports Reuters. “In November 2023, ISO New England and the New England Power Pool (NEPOOL) had sought the U.S. energy regulator's permission to delay the auction to finish assessing how much power capacity their resources can contribute. The auction, which will secure obligations from resources to be available during the 2028/2029 capacity year, will be held in February 2026, with the qualification process starting in early 2025, FERC said in a filing on Tuesday.”

  • The Biden administration moves to replenish more of the SPR. “The Department of Energy’s Office of Petroleum Reserves has announced a solicitation for the purchase of up to 3 million barrels of crude oil for the nation’s Strategic Petroleum Reserves (SPR), the agency said in a Wednesday press release,” reports Oilprice.com. “The solicitation is for as many as 3 million barrels of crude for delivery into the SPR in April 2024, and will go towards replenishing the nearly 300 million barrels of crude oil sold off during the current administration, ostensibly to lower retail gasoline prices for U.S. drivers. After selling hundreds of millions of barrels of crude oil when prices were high, the Administration laid out a plan to replenish the nation’s oil stockpiles whenever crude oil prices fell below $79 per barrel. Brent is currently trading under $78 per barrel, with WTI trading below $72.”

Crom’s Blessing

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