UPDATE 3-Equinor, Orsted bid for better contract in NY offshore wind auction

(Adds Community Offshore Wind statement in paragraph 6)

Jan 26 (Reuters) - New York State said on Friday it received bids to supply power from three offshore wind projects in its expedited fourth solicitation that allowed developers to exit old contracts and re-offer projects at higher prices.

Companies that submitted bids included units of Equinor , Orsted, and a joint venture between RWE and National Grid, the New York State Energy Research and Development Authority (NYSERDA) said on Friday.

If awarded, "construction at South Brooklyn Marine Terminal is expected to begin in the first half of this year, first power is expected in 2026," Equinor's spokesperson said in an emailed statement.

"Expected commercial operation date is 2027."

The New York solicitation comes after a difficult 2023 during which several developers canceled old contracts to sell offshore wind power in Massachusetts, Connecticut and New Jersey as soaring inflation, higher interest rates and supply chain snags made those old agreements uneconomic.

Community Offshore Wind said it had submitted two proposals for its project, which is expected to begin construction in late 2027 and come online by the end of 2031.

Turmoil hit another planned project on Thursday, when Denmark's Orsted, the world's biggest offshore wind firm, said it was exiting a deal to supply offshore wind power to Maryland from its Skipjack Wind project because the previously agreed contract was no longer commercially viable.

Norway's Equinor said on Thursday it submitted a bid in the latest New York solicitation shortly after agreeing to take full ownership of the Empire Wind project from oil major BP, its former joint venture partner.

As part of the deal, BP took full ownership of the venture's Beacon Wind project off New York.

Separately, Orsted bid for its 924-megawatt (MW) Sunrise Wind project in New York's latest solicitation and said it would acquire Eversource's 50% stake in Sunrise if its new bid was successful.

RWE and National Grid also submitted a bid for their joint venture 1,300-MW Community Offshore Wind project in the latest solicitation.

One megawatt of offshore wind can power roughly 500 U.S. homes.

Industry heavyweights BP, Equinor and Orsted combined took roughly $5 billion in writedowns in 2023 on U.S. offshore wind projects in part because their power sales contracts would not cover the cost of the projects.

The development of offshore wind is key to meeting both national and state clean energy targets. To prevent projects from falling through, some states, including New York, allowed developers to cancel old contracts and rebid at higher levels.

Equinor, which had an old contract with New York, submitted a new bid for the 816-MW Empire Wind 1 project and said it planned to bid for the 1,260-MW Empire Wind 2 wind farm in a future solicitation.

BP did not say what its plans were for its 1,230-MW Beacon Wind 1 project, which also had an old contract to sell power to New York. Before they split their joint venture, BP said it had been pursuing changes to the structure of its deal with Equinor.

(Reporting by Deep Vakil in Bengaluru and Scott DiSavino in New York; Additional reporting by Daksh Grover in Bengaluru, Editing by Bill Berkrot)