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U.S. offshore wind sector ‘fundamentally broken’ – BP exec

November 1, 2023 — BP’s renewables boss said on Wednesday the U.S. offshore wind industry is “fundamentally broken” as BP and its partner Equinor (EQNR.OL) study options to develop huge projects off the coast of New York after writing down $840 million of their value.

The offshore wind industry, one of the fastest growing energy sectors, has recently suffered a string of major setbacks due to equipment reliability issues, supply chain problems and sharp cost increases.

Orsted (ORSTED.CO), the world’s largest offshore wind developer, on Wednesday flagged writedowns of up to $5.6 billion after halting the development of U.S. offshore wind projects.

Anja-Isabel Dotzenrath, BP’s head of gas and low carbon, said that problems in the United States included permitting, the time lag between signing power purchase agreements and projects being built and a lack of inflationary adjustment mechanisms

Read the full article at Reuters

America’s Offshore Wind Ambitions Are Coming With Bigger Price Tags

November 1, 2023 — Soaring costs are pushing up the price of big wind-power projects, challenging the country’s shift to renewable energy and potentially leading to larger-than-expected bills for residents.

New York state officials in recent days unveiled a slate of wind-farm proposals that would result in higher electricity rates for residents than previously approved plans. That has firms behind older bids rushing to see if they can resubmit their plans at or near the new rate.

The projects are among the country’s biggest and are being closely watched because they show how a nascent industry that is key to the U.S. energy transition will work through the upheaval of escalating costs. The struggles are threatening delays in the current pipeline of projects, which analysts say could hamper the Biden administration’s offshore wind ambitions.

Read the full article at the Wall Street Journal

Orsted hit by up to $5.6 billion impairment on halted US projects

November 1, 2023 — Renewable energy firm Orsted (ORSTED.CO) on Wednesday halted the development of two U.S. offshore wind projects and said related impairments had surged above $5 billion, as the industry grapples with supply chain delays and higher costs.

Orsted, the world’s largest offshore wind developer, said it would stop developing its 2,248-megawatt (MW) Ocean Wind 1 and 2 projects in New Jersey. Related impairments could amount to as much as 39.4 billion Danish crowns ($5.58 billion).

Its stock plunged as much as 22% to a six year low of 265 crowns.

The offshore wind industry has found itself in a perfect storm of rising inflation, interest rate hikes and supply chain delays, casting doubt on plans by U.S. President Joe Biden and several states to use offshore wind to replace fossil fuels in energy production to fight climate change.

On Tuesday, energy major BP (BP.L) booked a third-quarter writedown of $540 million on wind projects after officials in New York state rejected a request for better terms to reflect what BP called “inflationary pressures and permitting delays”.

Read the full article at Reuters

NEW JERSEY: Orsted scraps 2 offshore wind power projects in New Jersey, citing supply chain issues

November 1, 2023 — Danish energy developer Orsted said Tuesday night it is scrapping two large offshore wind power projects off the coast of New Jersey, adding uncertainty to a nascent industry the Biden administration and many state governments are counting on to help transition away from the burning of planet-warming fossil fuels.

The company said it is canceling its Ocean Wind I and II projects in southern New Jersey, citing supply chain issues and rising interest rates.

Orsted CEO Mads Nipper said in a statement the company was disappointed to be halting the projects because it believes the United States needs wind power to reduce carbon emissions.

“However, the significant adverse developments from supply chain challenges, leading to delays in the project schedule, and rising interest rates have led us to this decision,” Nipper said.

Orsted stands to lose a $100 million guarantee it posted with New Jersey earlier this month that it would build Ocean Wind I by the end of 2025. That money could be returned to ratepayers.

Read the full article at the Associated Press

Dominion wind farm gets key green light in U.S. environmental review

November 1, 2o23 — A federal environmental review gives a green light to Dominion Energy‘s $9 billion offshore wind farm, located about 25 miles into the Atlantic from Virginia Beach’s Oceanfront.

 Dominion calls for more solar facilities, including Powhatan, Hanover sites

The approval includes requirements aimed at reducing harm to the endangered North American Right Whale and at easing the impact of construction and operation of the wind farm on fisheries and ship traffic in and out of the world’s biggest Navy base and one of the nation’s busiest ports.

The review “weighed all concerns in making decisions regarding this Project and has determined that all practicable means within its authority have been adopted to avoid or minimize environmental and socioeconomic harm,” the Bureau of Ocean Energy Management said.

It said pulling the plug on the wind farm “would still be expected to result in moderate, long-term, adverse impacts on regional air quality because other energy generation facilities would be needed.”

Those plants would be powered by fossil fuels which would emit pollutants and contribute to climate change.

Read the full article at Richmond Times-Dispatch

NEW JERSEY: ‘David defeats Goliath!’: South Jersey officials celebrate end of Ørsted offshore wind projects

November 1, 2023 — From anger in Trenton to disappointment in Atlantic City to celebration in Cape May County, Ørsted’s decision to end development of its Ocean Wind 1 and 2 projects off the Jersey Shore delivered a mix of emotions.

In announcing the move Tuesday evening, executives with the Danish energy company cited high inflation, rising interest rates and supply chain issues.

“We are extremely disappointed to have to take this decision, particularly because New Jersey is poised to be a U.S. and global hub for offshore wind energy,” said David Hardy, group executive vice president and CEO Americas for the Danish energy company.

During a news conference Wednesday morning, Cape May County officials called Ørsted’s announcement a win for local shore communities.

“Anyone thinks that they’re going to walk and put their footprints on our beach better beware that they’re not coming into Cape May County, no way, no how,” said county Commissioner Director Leonard Desiderio.

Read the full article at the Press of Atlantic City

VIRGINIA: Feds approve Coastal Virginia Offshore Wind; first foundations arrive

November 1, 2023 — The Biden administration announced its approval Tuesday of the Coastal Virginia Offshore Wind project, the largest to date in U.S. waters with a planned maximum rating of 2,600 megawatts.

Eight steel monopile foundations arrived in Portsmouth, Va., Oct. 19, the first components for the planned 176 turbines in an $9.8 billion array starting 23.5 miles east of Virginia Beach, Va. It’s the fifth utility-scale wind project approved through the Bureau of Ocean Energy Management, following the Vineyard Wind 1, South Fork Wind and Revolution Wind projects off southern New England, and Ocean Wind 1 off New Jersey.  Together the projects will collectively generate more than 5 gigawatts of maximum potential.

But the CVOW approval also arrives amid broader turmoil in the renewable energy industry, beset by rapidly escalating costs and financial losses for developers and turbine manufacturers. Most recently four developers that sought bigger subsidies for projects off New York were rejected by New York State energy regulators, leaving the future of their plans in doubt.

Biden administration officials and CVOW developer Dominion Energy portrayed the approval Tuesday as a milestone. The project “is expected to provide about 900 jobs each year during the construction phase and support an estimated 1,100 annual jobs during the operations phase, generating vital economic development for Virginia’s Hampton Roads area and supporting investments in the Virginia coastal region as a hub for offshore wind development and support,” according to a prepared statement from BOEM.

Read the full article at WorkBoat

Wind industry deals with blowback from Orsted scrapping 2 wind power projects in New Jersey

November 1, 2023 — Wind energy developer Orsted is writing off $4 billion, due largely to the cancellation of two large offshore wind projects in New Jersey whose financial challenges mirror those facing the nascent industry.

It added fresh uncertainty to an industry seen by supporters as a way to help end the burning of planet-warming fossil fuels, but derided by opponents as inherently unworkable without massive financial subsidies.

The Danish company said Tuesday night it is scrapping its Ocean Wind I and II projects off the coast of southern New Jersey due to problems with supply chains, higher interest rates, and a failure to obtain the amount of tax credits the company wanted.

“These are obviously some very tough decisions,” Mads Nipper, Orsted’s CEO, said on an earnings conference call Wednesday.

He said the company, the world’s largest offshore wind developer, decided “to de-risk the most painful part of our portfolio, and that is the U.S.”

That statement went straight to the heart about concerns over the financial viability of the offshore wind industry in the northeastern U.S., which is in its infancy but has extensive plans from New England to the Carolinas.

Some projects already have been canceled, and many offshore wind developers are seeking better terms from governments with whom they have already contracted. New York rejected such a request two weeks ago.

New Jersey approved a tax break for Orsted in July, letting it keep federal tax credits that otherwise would have gone to ratepayers.

Read the full article at the Associated Press

Biden administration moves toward more wind energy in Gulf of Mexico

October 31, 2023 — The Biden administration took a step Friday to advance the development of more wind energy in the Gulf of Mexico.

The Interior Department finalized four new “wind energy areas” where it can auction off the right to set up wind power.

Together, electricity produced at the four areas could be enough to power as many as 3.23 million homes combined, according to the administration.

Three of the locations are off the coast of Texas, while one is off the coast of Louisiana.

Elizabeth Klein, director of the Bureau of Ocean Energy Management, said in a written statement that her agency is pursuing more offshore wind in the Gulf because of “continued industry interest and feedback from our partners and key stakeholders.”

Read the full article at The Hill

 

VIRGINIA: First Monopiles Arrive for Dominion Energy’s Coastal Virginia Wind Farm

October 30, 2023 — After a seemingly endless stream of bad news for the U.S. offshore wind energy industry, elected officials, executives from Dominion Energy, the Port of Virginia, and their partners, gathered today to mark a key step forward for the Coastal Virginia Offshore Wind (CVOW) project. The wind farm, which is still waiting for its final approvals and permitting, is already the largest offshore wind project under development in the U.S. and is gearing up for construction to begin after years of planning.

The first eight monopile foundations, built in Germany, arrived last week in Virginia at the staging site at the Portsmouth Marine Terminal. The massive steel constructions, each weighing around 1,500 tons, took nearly two and a half weeks by ship to reach Virginia. They are the first of the foundations for a total of 176 wind turbines that are planned for CVOW.

Read the full article at the Maritime Executive