Dec 7 (Reuters) - The U.S Federal Permitting Improvement Steering Council on Thursday approved the construction of a $1.5 billion offshore wind farm off the coast of Rhode Island.

The project, Revolution Wind, is run by Danish company Orsted and U.S.-based Eversource, and would bring a total of 704 megawatts (MW) clean energy to Connecticut and Rhode Island.

Another offshore project by the two wind energy developers, the South Fork wind farm off the coast of New York, delivered its first power to the state's power grid on Wednesday.

Offshore wind development has been a priority for the Biden administration. Yet soaring costs from rising inflation, high interest rates, and delays in supply chains cast doubts on plans to bring 30 gigawatts (GW) of offshore wind power online by 2030.

Many developers canceled or opted to renegotiate power purchase contracts as previously agreed prices were too low to justify investments.

In March, the Rhode Island utility rejected Orsted's proposal to build Revolution Wind's second stage, 884-MW Revolution Wind 2, saying it would be too costly for consumers. (Reporting by Vallari Srivastava; Editing by Maju Samuel)