Offshore Wind No Bargain

Comment

Comment by Willem Post on November 26, 2023 at 4:57pm

Assume, at some future date, wind and solar installed capacity is sufficient to provide average daily demand each day of the year.

But, if a wind/solar lull occurs, batteries are needed to make up the wind/solar shortfall

Say, at a future date, NE average demand is 21,000 MW on a January day, and during that entire day the average solar and wind output is 2,000 MW

Production fed to grid for that day is 24 x 19,000 = 456,000 MWh

The required battery capacity will be (19,000 MW) /(456,000 MWh/0.5)

There are some design factors we will ignore for simplicity

The 0.5 is due to Tesla recommending not charging over 80% and not discharging to less than 20%
That means the maximum delivered electricity is 0.6 of capacity.

I am assuming only 0.5 is actually available, if we are lucky.

There is a round-trip 20% loss; from HV grid, step-down transformer, power electronics, into battery, out of battery, power electronics, step-up transformer, HV grid
That means you have to feed about 20% more into the battery than is delivered, to recharge the battery desired levels

Capital cost = 456000/0.5 x 1000 kWh/MWh x $575/delivered kWh as AC, 2023 pricing = $524.4 billion

Double the amount, if the wind/solar lull lasts two days.

Even if batteries were $100/delivered kWh, the repeating multi-$billion cost would bankrupt New England

Remember, these batteries last only about 15 years, and they age during that time, which increases friction losses and reduces delivered electricity as AC

There better be enough wind and solar to recharge the batteries to at least 0.5 or better, to anticipate the next lull, which could happen a few days later, plus to serve NE normal battery services

See

BATTERY SYSTEM CAPITAL COSTS, OPERATING COSTS, ENERGY LOSSES, AND AGING
https://www.windtaskforce.org/profiles/blogs/battery-system-capital...

Comment by Willem Post on November 26, 2023 at 11:19am

World's Largest Offshore Wind System Developer Abandons Two Major US Projects as Wind Bust Continues 

https://www.windtaskforce.org/profiles/blogs/world-s-largest-offsho...

Oersted Recorded Impairment Charges Well Above Prior Forecasts 

Oersted A/S announced, "US offshore wind projects have experienced further negative developments from adverse impacts relating to supply chains, increased interest rates, and the lack of an OREC adjustment (Offshore Renewable Energy Certificates) for Sunrise Wind, and the Ocean Wind 1 and 2 projects”.”

"OREC adjustment" involves being awarded “bonus” subsidies of Biden's Inflation Reduction Act, IRA.

Oersted wants Biden to ignore/waive the domestic-content requirements of IRA, so Europe would receive “OREC bonus” subsidies to create European jobs, and to build European factories, ports, cranes, specialized ships, etc., for manufacturing and erecting wind turbines to increase EU wind turbine exports to the US, UK, etc., for decades.

Europe is not interested in setting up the US as an offshore wind competitor.

Europe, lacking sufficient energy and other resources, has a self-serving goal to move the US, rich in energy and other resources, into the expensive wind/solar/battery/EV blackhole, using IPCC/WEF to scare-monger about global warming.

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A 500-ft long, specialized ship, standing on the sea floor, elevated 20 ft above water, erecting wind turbines

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Oersted said, "Total impairments recognized in the interim financial report for the first nine months of 2023 amount to DKK 28.4 billion ($4 billion), and the majority of these (DKK 19.9 billion) relate to Ocean Wind 1, a New Jersey State project."

This amount is much larger than the previously announced impairment in August on its US portfolio of up to DKK 16 billion ($2.6 billion). 

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"This is a consequence of additional supplier delays further impacting the project schedule and leading to an additional significant project delay," the company said. 

Mads Nipper, chief executive, said he was "extremely disappointed to announce that we are ceasing the development of Ocean Wind 1 (1100 MW installed capacity) and Ocean Wind 2 (1148 MW installed capacity)," adding, "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, and we will now assess the best way to preserve shareholder value while we cease development of the projects." 

Shares of Oersted crashed as much as 22%, to DDK 279.4, to lows not seen in six years. 

The shares reached a peak of almost DDK 1400 in December 2020, more than 1 year before the Ukraine events, which intensified in February 2022

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In August, Nipper warned: "The situation in US offshore wind is severe." Weeks later, he told Bloomberg: "We are still upholding a real option to walk away."

The Biden administration has touted offshore wind systems as an essential component of decarbonizing America's grid.

Under the Inflation Reduction Act, Oersted has received upwards of 30% tax credits, plus 5y-depreciation of the project, plus deducting interest on borrowed money, plus production tax credit, plus "OREC bonus benefits", if qualified.

However, even more subsidies are needed as a financial crisis is brewing in the offshore wind industry, located mainly in the EU and China

Additional Financing by New Jersey Taxpayers

Under normal circumstances, Ocean Wind 1 and 2 would have a profit for most of the 20 years of its lifetime, on which it would have to pay federal and state income taxes.

Democrats, without a single Republican vote, exempted Oersted from state income taxes for the 20-y life of the two projects, a gift of about $1.0 billion.

In return, Oersted pledged to invest $300 million in onshore pre-assembly/staging facilities for the construction of various offshore wind projects on the Delaware River

The NJ Economic Development Authority, helped out by issuing $160 million in municipal bonds, free from federal and state taxes, which mostly benefits millionaires looking for tax shelters

Governor Murphy, etc., is upset about the project cancellations and the lack Oersted's pledged $300 million of the at least $500 million pre-assembly/staging facility. Those relatively low-tech jobs will stay in Denmark, etc.

As luck would have it, Murphy had recently increased, by executive order, the NJ offshore wind goal to 11,000 MW by 2040, up almost 50%, to show his extra seriousness about being green. 

Siemens Energy, A German Company

Last week, Siemens Energy in Germany crashed after the company warned its wind turbine business is grappling with quality  and maintenance issues of onshore and offshore wind systems, plus offshore ramp-up challenges.

 

Siemens Energy Shares Crash 37% As Renewable Bust Sparks 'Green Panic

The Siemens shares peaked in January 2021, more than a year before the Ukraine events

https://www.windtaskforce.org/profiles/blogs/siemens-energy-shares-...

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Siemens/ Gamesa scraps plans to build blades for offshore wind turbines on Virginia’s coast

https://apnews.com/article/offshore-wind-virginia-factory-siemens-g...

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The company’s proposed $200 million factory at the Port of Virginia in Portsmouth would have created more than 300 jobs and aided the state in its aspirations to become a pre-assembly/staging hub for offshore wind projects.
Those relatively

low-tech, dirty Fiberglas blade jobs will stay in Germany and Spain

The change in plans by the Spain-based firm comes at a time when inflation, raised interest rates and supply chain issues have eliminated the viability of offshore wind projects in the US, unless subsidies are increased from 50% to about 70%

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The Net-Zero by 2050 Ship Starting to Sink

https://www.windtaskforce.org/profiles/blogs/the-net-zero-by-2050-s...

NOTE:  SolarEdge Technologies shares plunged about two weeks ago, after it warned about decreasing European demand. 

Solar Panels Are Much More Carbon-Intensive Than Experts are Willing to Admit

https://www.windtaskforce.org/profiles/blogs/solar-panels-are-more-...

MORE CANCELLATIONS ARE COMING

New York State had signed contracts with EU big wind companies for four offshore wind projects

Sometime later, the companies were trying to coerce an additional $25.35 billion (per Wind Watch) from New York ratepayers and taxpayers over at least 20 years, because they had bid at lower prices than they should have.

New York State denied the request on October 12, 2023; “a deal is a deal”, said the Commissioner 

 

Owners want a return on investment of at least 10%/y, if bank loans for risky projects are 6.5%/y, and project cost inflation and uncertainties are high 

The about 3.5% is a minimum for all the years of hassles of designing, building, erecting, and paperwork of a project

The project prices, with no subsidies, would be about two times the agreed contract price, paid by Utilities to owners.

The reduction is due to US subsidies provided, per various US laws

All contractors had bid too low. When they realized there would be huge losses, they asked for higher contract prices.

It looks like the contract prices will need to be at least $150/MWh, for contractors to make money. Those contract prices would be at least 60% higher than in 2021

Oersted, Denmark, Sunrise wind, contract price $110.37/MWh, contractor needs $139.99/MWh, a 27% increase

Equinor, Norway, Empire 1 wind, contract price $118.38/MWh, contractor needs $159.64/MWh, a 35% increase

Equinor, Norway, Empire 2 wind, contract price $107.50/MWh, contractor needs $177.84/MWh, a 66% increase

Equinor, Norway, Beacon Wind, contract price $118.00/MWh, contractor needs $190.82/MWh, a 62% increase

https://www.windtaskforce.org/profiles/blogs/liars-lies-exposed-as-wind-electricity-price-increases-by-66-wake

Offshore Cancellations in Massachusetts, Connecticut and Rhode Island

BP (BP.L) and Oersted (ORSTED.CO) have announced hefty writedowns , and US offshore project cancellations, in recent days, in the face of high inflation, high interest rates, and lack of the timely availability of specialized ships.

In Rhode Island, in March 2023, a procurement for offshore wind drew only one bidder – an 884 MW proposal from Eversource and Ørsted.

In August, Ørsted CEO Mads Nipper warned the company could walk away from unprofitable projects in the US amid the turbulence in pricing and supply chain issues.

Avangrid, a Spanish company, in September 2022, walked away from its 804 MW Park City wind project, planned for off the coast of Martha’s Vineyard. It was no longer feasible at the 2019 contract price agreed with Connecticut.

At the time, the company said, inflation, higher interest rates and supply chain issues made the agreed price of $79.83 per MWh unprofitable.

In July 2023, Avangrid also walked away from its 1200 MW Commonwealth Wind project for Massachusetts.

The two projects became so unprofitable, it made better financial sense for Avangrid to pay $48, Massachusetts + $16, Connecticut = $64 million in walk-away penalties, rather than face much higher costs for building the project, with no prospect of a profit. 

SHELL: LONDON, Nov 2 (Reuters) - Shell's CFO said on Thursday, the firm had abandoned a power purchase agreement (PPA), at contract price of $76.73/MWh, for the planned 2400 MW SouthCoast offshore wind project, off the coast of Massachusetts, agreeing to pay a $60 million walk-away penalty, rather than face much higher costs for building the project, with no prospect of a profit. 

https://ctexaminer.com/2023/10/03/avangrid-cancels-park-city-wind-c...

Connecticut's New London Pier; a Hub for Pre-Assembly/Staging Construction

https://revolution-wind.com/state-pier#:~:text=As%20a%20staging%20a....

New London Pier will be a hub for pre-assembly/staging of construction of offshore wind projects.

Launched in 2020, the original cost was estimated at $93 million, with $75 million from "private sources"

That estimate turned out to be very much "off the mark", largely because existing concrete piers and deteriorating woodpile foundations had to be removed

At present, the cost has become $309 million, and counting

Sources of Funds, thus far:

Private sources, about $100 million, includes Ørsted and Eversource, $77.5 million

Misc. Connecticut state funds, from taxpayers, $89 million

Connecticut Bond Commission, ultimately paid by taxpayers, $50 million

Connecticut Port Authority municipal bond Issuances, ultimately paid by taxpayers $63 million

US Dept. of Transportation, from taxpayers $7 million

Total, $309 million

Recently, the first barge was loaded with 3 blades, a nacelle (the Greyhound-bus-size box at the top), and 4 tower sections for erecting one wind turbine of the South Fork Wind project  

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A 30 MW, 5 units @ 6 MW, “demonstration project”, costing $300 million, off Block Island, $10 million/installed MW

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Opposition to Wind Turbines in New Jersey

The cancelled Ocean Wind 1 and 2 projects were extremely unpopular in New Jersey, prompting widespread protests and aggressive congressional opposition, led by Jersey Shore lawmakers Rep. Chris Smith (R-NJ) and Jeff Van Drew (R-NJ).

https://www.breitbart.com/politics/2023/11/02/foreign-company-cance...

Local commercial and recreational fishing industry professionals fear the wind turbine maritime leases would:

1) prevent them from making a living,

2) kill off thriving fisheries, and

3) destroy century-old traditions along the Shore.

“The commercial fishing industry is extremely upset with the visual observations of dead whales floating at sea,” Brick Wenzel, Point Pleasant Beach.

He is New Jersey’s fishing industry liaison, and a longtime commercial fisherman.

He told Breitbart News in March. “One vessel reported, they had seen 3 different whales in one trip.

Another had parts of a whale come up in their net.

Most of the captains are generational fishermen, and are in their 60s — no one has heard of, or seen anything like the carnage  of whales"

The federal government has documented 66 whales stranded, including 10 in New Jersey, along the Atlantic Coast, up till October 2023

New Jersey has documented another 45 dolphins washing ashore in 2023

“The cancellation of the projects is a very, very big deal, and in my mind a good day for fishermen, for our tourism and our coasts, for whales and dolphins and life in the ocean, a good day for national security, and finally, a good day for our taxpayers and ratepayers,” said Jeff Van Drew (R-NJ).

Sonic Boom, Sub-Bottom Profiling of Sea Floors for Offshore Turbine Foundations

Environmentalists noted a concurrent increase in the deaths of marine mammals, particularly whales and dolphins, as Oersted's subcontractors were using sonar mapping for foundations. Various sound sources are used including Boomers and Sparkers to achieve deep signal penetration.

After that comes the driving of piles about 100 ft (30 m) into bedrock, to support the weight, and resist over-turning forces of each 850-ft tall wind turbine. 

The sound waves travel at about 1500 m/sec in water vs about 340 m/s in air

Sounds, measured in decibels, dBs, are referenced to 20 microPascal in air, and 1 microPascal in water

Sounds, dBs, in air are lower than in water 

The sounds of boomers and sparklers are in excess of 200 dB

The frequencies of boomers vary from 300 Hz (cycles per second) to 6000 Hz

The frequencies of sparkers vary from 40 Hz, to 1500 Hz

The sound of a sparker, at 40 Hz and 222 dB, a low, powerful sound, has a lot of energy that penetrates deeply into rock strata of the ocean floor. See Note and table

Jet aircraft noise, about 140 dB, causes pain and damage to unprotected human ears at 50 meters away

Each 10 dB doubles the sound pressure level, SPL, of a sound.

The 140 dB of a jet engine at 50 m away has 10 x 10 x 10 = 1000 times the SPL of the 110 dB of a chainsaw at 1 m away  

NOTE: The sounds of sparkers in water should be reduced by 26 dB, due to lower reference pressure, and 36 dB, due to higher impedance of water, ergo, a sparker dB of 222 in water, becomes 160 dB in air

https://www.arc.id.au/SoundLevels.html

Damaging Whales, Porpoises and Dolphins

A sparker may damage/destroy the echo-locating, sonar systems of whales, etc., which significantly reduce their communication, navigational and food-finding abilities. 
They become disoriented, get hit by ships, cannot find food, cannot find their mates, and wash onto shores

https://tos.org/oceanography/article/acoustic-impacts-of-offshore-w...

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The dB values in air are referenced to 20 microPascal, or 20 microPa

The dB values in water are referenced to 1 microPa

The energy of a sound wave, SPL, in dB = 10 log (Pa^2/Pa ref^2) = 20 log (Pa/Pa ref )

Physical damage in air occurs at a measured Pa = 60, equivalent to 130 dB

In the image:

The circle has a measured diameter of 50 km (30 miles)

The dark-red band sounds, near the pile driver, are 170 dB

The green band sounds are 130 to 140 dB, 25 km away

Sound attenuation from 170 dB to 140 dB is 30 dB, after 25 km of travel in about 16 seconds

Each 10 MW wind turbine foundation requires a huge mono-pile

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A Guide to Sub-Bottom Profiling

https://www.aaetechnologiesgroup.com/news/guide-to-sub-bottom-profi...

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Bubble Curtains Protect Porpoises, Dolphins and Whales From Loud Sonic Mapping

BOEM, NOAA, etc., likely knew about the bubble curtains that minimize loud noises from solar mapping and pile driving, because those systems are used to protect whales, porpoises and dolphins in the Baltic Sea and North Sea, already for about 10 years.

Why was this not used before so many whales and dolphins were killed on the US East Coast, where 72 whales died since December 2022

The whales know what their nemesis is doing to their population

https://www.wind-watch.org/news/2023/11/08/72-whales-have-died-on-t...

BOEM, NOAA, etc., decided not to require them, because the bubble systems and suitable ships likely were not available in a timely manner, plus it would increase costs. 

BOEM, NOAA, etc., eager not to be accused of slowing down Biden's offshore wind projects, claimed, they ‘found no evidence linking sonar mapping detonations and the surge in whale and dolphin deaths”.

BOEM, NOAA, etc., enlisted the help of the lapdog US Media to spread the word.

However, Germany, etc., found the evidence more than 10 years ago, and did something about it.

In Germany, there is a saying: "Lügen haben kurze Beine", or "Lies have short legs".

Disparate New Jersey residents organized “Save the Whales” rallies, in defiance of those "official claims”.

https://www.bbc.com/future/article/20231106-the-big-bubble-curtains...

https://e360.yale.edu/digest/bubble_curtains_proposed_to_protect_wh...

This article is more than 12 years old

https://www.theguardian.com/environment/2011/aug/09/german-bubble-w...

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Above is an image of pile driving in the Baltic Sea. The specialized ships are about 400 ft long

Failure to use bubble curtains in waters off New England and off the New York/North Carolina shore likely killed a lot of whales and porpoises.

Below is a close-up image of bubble wall

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APPENDIX 1

Floating Offshore Wind Systems in the Impoverished State of Maine

https://www.windtaskforce.org/profiles/blogs/floating-offshore-wind...

Offshore Wind Capacity Placed on Operation in 2021

World: During 2021, worldwide offshore wind capacity placed in operation was 17,398 MW, of which China 13,790 MW, and the rest of the world 3,608 MW, of which UK 1,855 MW; Vietnam 643 MW; Denmark 604 MW; Netherlands 402 MW; Taiwan 109 MW

Of the 17,398 MW, just 57.1 MW was floating, about 1/3%

At end of 2021, 50,623 MW was in operation, of which just 123.4 MW was floating, about 1/4%

https://www.energy.gov/eere/wind/articles/offshore-wind-market-repo...

NOTE: Despite the meager floating offshore MW in the world, pro-wind politicians, bureaucrats, etc., aided and abetted by the lapdog Media, in the impoverished State of Maine, continue to fantasize about building 3,000 MW of 850-ft-tall floating offshore wind turbines by 2040!!

Maine government bureaucrats, etc., in a world of their own climate-fighting fantasies, want to have about 3,000 MW of floating wind turbines by 2040; a most expensive, totally unrealistic goal, that would further impoverish the already-poor State of Maine for many decades.

Those bureaucrats, etc., would help fatten the lucrative, 20-y, tax-shelters of mostly out-of-state, multi-millionaire, wind-subsidy chasers, who likely have minimal regard for:

1) Impacts on the environment and the fishing and tourist industries of Maine, and

2) Already-overstressed, over-taxed, over-regulated Maine ratepayers and taxpayers, who are trying to make ends meet in a near-zero, real-growth economy.

Those fishery-destroying, 850-ft-tall floaters, with 24/7365 strobe lights, visible 30 miles from any shore, would cost at least $7,500/ installed kW, or at least $22.5 billion, if built in 2023 (more after 2023)

Almost the entire supply of the projects would be designed and made in Europe, then transported across the Atlantic Ocean, in specialized ships, also designed and made in Europe, then unloaded at the Maine pre-assembly/staging area, then barged to specialized erection ships, for erection of the floating turbines.

About 200 Maine people would have short-term erection jobs. About 30 Maine people would have long-term O&M jobs

They would produce electricity at about 40 c/kWh, without subsidies, about 20 c/kWh with subsidies, the wholesale price at which utilities would buy from Owners (higher prices after 2023)

https://www.maine.gov/governor/mills/news/governor-mills-signs-bill...

The Maine woke bureaucrats are falling over each other to prove their "greenness", offering $millions of this and that for free, but all their primping and preening efforts has resulted in no floating offshore bids from European developers

The Maine people have much greater burdens to look forward to for the next 20 years, courtesy of the Governor Mills incompetent, woke bureaucracy that has infested the state government 

The Maine people need to finally wake up, and put an end to all the climate scare-mongering, which aims to subjugate and further impoverish them, by voting the entire Democrat woke cabal out and replace it with rational Republicans in 2024

The present course leads to financial disaster for the impoverished State of Maine and its people.

The purposely-kept-ignorant Maine people do not deserve such maltreatment

NOTE: The above prices compare with the average New England wholesale price of about 5 c/kWh, during the 2009 - 2022 period, 13 years, courtesy of:

 

Natural gas-fueled CCGT plants, with low-cost, low-CO2, very-low particulate/kWh

Nuclear plants, with low-cost, near-zero CO2, zero particulate/kWh

Hydro plants, with low-cost, near-zero-CO2, zero particulate/kWh