November 15, 2022 — A rising tide of interest rates, supply chain bottlenecks and inflation is threatening the Biden administration’s ambitious offshore wind targets, creating a significant challenge for one of the president’s top climate priorities.
Recent weeks have seen a series of developers raise concerns over rising costs. In New Jersey, a developer warned earlier this month that a planned 98-turbine project off the coast of New Jersey could threaten its finances.
In New England, two developers with contracts to sell power to Massachusetts have sought to renegotiate the deals, only to get shot down by state regulators.
Many developers bid aggressively in state auctions to win those contracts but are now locked into agreements that didn’t account for rising costs, said Sam Huntington, director of North American power and renewables at S&P Global Commodity Insights.
The financial difficulties call into question the Biden administration’s goal of installing 30 gigawatts of offshore wind power by the end of this decade.
“We don’t see them hitting that,” Huntington said. “It is going to be something to watch. I don’t have a good sense of whether these will get renegotiated or canceled.”
The doubts are shared by other analysts. Bloomberg New Energy Finance sees the United States falling 3 to 4 GW short of its 2030 target due to long development timelines and an immature supply chain. The London-based renewables market intelligence firm Renewables Consulting Group estimates the United States will reach just over 25 GW by 2030.