Regulatory Rebuff Blow to Offshore Wind Projects; Had Asked for Additional $25.35 billion

https://www.windtaskforce.org/profiles/blogs/biden-30-000-mw-of-off...

EXCERPT

New York State bureaucrats have signed contracts for offshore wind projects.

Some time later, the owners said, we request up to 66% more, for our spreadsheets to make business sense.

The increase for the below four projects amounts to $25.35 billion, per Wind Watch.

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, and bank loans for risky projects are about 6.5%/y.

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

Below contract prices, paid by Utilities to owners, are after a 50% reduction, due to US subsidies provided, per various laws, by the US Treasury to the owners. See Items 4 and 6

Oersted, Denmark, Sunrise wind, NYS contracted at $110.37/MWh, needs $139.99/MWh, a 27% increase

Equinor, Norway, Empire 1 wind, NYS contracted at $118.38/MWh, needs $159.64/MWh, a 35% increase

Equinor, Norway, Empire 2 wind, NYS contracted at $107.50/MWh, needs $177.84/MWh, a 66% increase

Equinor, Norway, Beacon Wind, NYS contracted at $118.00/MWh, needs $190.82/MWh, a 62% increase

https://www.windtaskforce.org/profiles/blogs/liars-lies-exposed-as-...

When the breezy dreams of offshore wind giants met the rocky shores of regulation.

In a move that left offshore wind giants like Orsted, Equinor, and BP staggering while looking forward to tens of $billions of losses on 4 Offshore wind projects, New York’s utility regulator has blown away pleas for contract relief.

“Nearly all of New York’s pacesetting 4.3GW of contracted offshore wind capacity is now in limbo following rejection of developers’ pleas for inflation relief by the state’s utility regulator.”

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Major European countries have given up on Net Zero by 2050, because it is much too expensive. For example, the UK and Norway are making huge investments in developing more oil and gas fields in the North Sea, and Sweden is make big investments in nuclear plants, and has put a stop to more wind turbines.

https://www.zerohedge.com/geopolitical/net-zero-ship-starting-sink

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European Wind Developers’ Request for $25.35 Billion of Additional Money was Denied

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The developers, caught in the turbulent winds of cost overruns, sought major increases to contract selling prices by a staggering average of 55%. However, the PSC was not swayed by their arguments.

“New York Public Service Commission (PSC) denied petitions by the state’s two offshore wind developers, joint ventures (JVs) of Equinor-BP and Orsted-Eversource, for increases to offtake contracts as high as 55%, which one PSC member reportedly described as ‘breathtaking’.”

Impact on Already-Overstressed Ratepayer a Major Concern, with Election Coming Up

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The PSC stood its ground, prioritizing the interests of ratepayers over the financial woes of developers.

The commission emphasized, the proposed contract increases were not in line with New York State policy objectives.

“Regulator said cost hikes of up to 55% would have substantial ratepayer impacts and were ‘fundamentally inconsistent’ with commission policy.”

The Uncertain Path Ahead

The decision leaves a significant portion of New York’s offshore wind capacity in a state of uncertainty.

The ambitious plans of these offshore developers now seem to be at the mercy of regulatory scrutiny and economic practicality.

The future trajectory of these projects remains unclear amidst this regulatory challenge.

Conclusion: Navigating the Regulatory Landscape

The PSC’s decision underscores an interplay of economic considerations and, (finally!) some regulatory prudence in the renewable energy sector.

Developers, perhaps for the first time, face the task of advancing their projects amidst economic fluctuations, having to deal with regulatory expectations and safeguarding ratepayer interests.

We’ll see how many walk away from projects, and what the penalties will be for reneging on signed contracts.

Source of this article:

https://www.rechargenews.com/wind/blow-to-orsted-equinor-and-bp-as-...

European Big Wind Conglomerates in Deep Financial Trouble

The above is an example of European Big Wind conglomerates trying to coerce additional funds from New York ratepayers and taxpayers for at least 20 years, because they keep bidding at lower prices, $/MWh, than they should

In addition, we are seeing the early stages of worldwide resistance against the constraints and costs of net zero policies

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