U.S. Offshore Wind Plans Are Utterly Collapsing

U.S. Offshore Wind Plans Are Utterly Collapsing

https://www.windtaskforce.org/profiles/blogs/u-s-offshore-wind-plan...



.

This story originally was published by Real Clear Wire

By David T. Stevenson

Real Clear Wire

Offshore wind developer Ørsted has delayed its New Jersey Ocean Wind 1 project to 2026. 

Previously, the company had announced construction of the project would begin in October 2023.

The delay was attributed to supply chain issues, higher interest rates, and a failure to obtain enough tax credits from the federal government.

For now, they are not walking away from all their U.S. projects, but will reconsider long-term plans by the end of this year. 

Ørsted’s stock price has fallen 30% in 5 days. This is just the latest bad news for offshore win.

Ocean Wind 1 had one of the highest guaranteed prices among the 18 projects currently in the approval queue.
.
The actual wholesale price guarantees for Ocean Wind 1 start at $98.10/MWh, increasing at 2%/y to $145.77.
.
Over twenty years, revenue will average $126.47/MWh , according to the New Jersey Board of Public Utilities (BPU).
.
Ørsted is seeking higher guarantees from the BPU, PLUS an increase in federal Investment Tax Credits from 30% to 40%.
.
Recognizing the potential financial problems, New Jersey’s largest public utility, Public Service Electric & Gas Company sold its 25% share of the project to Ørsted in January.

.

Oersted said, it is “reconfiguring” Ocean Wind II in New Jersey, and its Skipjack Wind project off the coasts of Maryland and Delaware, because they do not currently meet its projected financial standards.

The Maryland Public Service Commission guaranteed Skipjack Wind $146.42/MWh average over twenty years and also gets to keep revenue from sales to the regional grid.

Apparently, the higher guarantee is still not enough to meet the company’s financial goals. Ørsted is working to renegotiate guaranteed prices on two other projects, Sunrise Wind and Revolution Wind, that would need a 30% increase just to meet the current Ocean Wind 1 guaranteed price.

Meanwhile, projects off New York are asking for an average 48% increase in guaranteed prices that could add $880 billion a year to electric rates, or almost $18 billion over twenty years (see table below).

In North Carolina, the latest long-term energy plan from Duke Energy drops offshore wind entirely in favor of nuclear, solar, and onshore wind.

Furthermore, Duke has committed to close any existing power plants, after replacement plants are in operation, an idea that other states and regions, such as New England, should follow, to ensure reliable electric service, 24/7/365.

Two new offshore wind lease areas in the Gulf of Mexico failed to attract a bid. 

NOTE: In the UK

About 7,000 MW of offshore wind bids were awarded by the UK 4th Auction, in 2022

No bids were submitted for the UK 5th Auction, in 2023; European Big Wind companies protesting against low UK subsidies.

Vineyard Wind off Nantucket has begun construction but faces three unresolved lawsuits.

Wind turbine manufacturers are faring no better. 

Siemens Gamesa has announced almost $5 billion in 2023 losses from warranty repairs for turbines much smaller than those planned in the US.

The company also faces price pressure. The stock price has dropped 30% since June.

This is not the time for ANY STATE to be considering offshore wind.

Clearly, the industry is in disarray, facing rising costs, durability, and legal issues.

An 800 MW project, similar in size and current guaranteed price to Skipjack 2, may raise Delaware residential electric prices by $400 to $545/year , and for businesses by the tens of $thousands.

A Monmouth University poll shows a major decrease in public support for offshore wind in New Jersey, falling from 84% to 54% with 40% opposed.

David T. Stevenson, Center for Energy & Environmental Policy, Caesar Rodney Institute. 

This article was originally published by RealClearEnergy and made available via RealClearWire.

Views: 103

Comment

You need to be a member of Citizens' Task Force on Wind Power - Maine to add comments!

Join Citizens' Task Force on Wind Power - Maine

Comment by Willem Post on October 1, 2023 at 4:15pm

BIDEN 30,000 MW OF OFFSHORE WIND BY 2030; AN EXPENSIVE FANTASY  

 

The Biden administration announced on October 13, 2021, it will subsidize the development of up to seven offshore wind systems (never call them farms) on the US East and West coasts, and in the Gulf of Mexico; a total of about 30,000 MW of offshore wind by 2030.

 

This is part of the “Inflation Reduction Act”, which CBO estimated at $391 billion, but Goldman Sachs estimated at $1.2 trillion, due to Biden’s handlers “liberally interpreting” the various open-ended measures. 

This deficit spending will be added to the national debt, which would increase inflation. See URL for explanation.

https://www.windtaskforce.org/profiles/blogs/biden-s-green-energy-policy-may-end-in-tears-1

 

High Prices of Goods and Services: Biden's offshore wind systems would have an adverse, long-term impact on US electricity wholesale prices, and the prices of all other goods and services, because their expensive electricity would permeate into all economic activities.

 

High Visibility: The wind turbines would be at least 800-ft-tall, which would need to be located at least 30 miles from shores, to ensure minimal disturbance from night-time strobe lights.

 

Damage to Fisheries, Whales and other Fauna: Any commercial fishing areas would be significantly impacted by below-water infrastructures and cables. The low-frequency noise (less than 20 cycles per second, aka infrasound) of the wind turbines would adversely affect marine life, including whales, and productivity of fishing areas.

https://www.windtaskforce.org/profiles/blogs/feds-finally-admits-offshore-wind-can-kill-whales

 

Offshore Wind Electricity Production and Cost

 

Electricity production about 30,000 MW x 8766 h/y x 0.40, lifetime-average capacity factor = 105,192,000 MWh, or 105.2 TWh. The production would be about 100 x 105.2/4000 = 2.63% of the annual electricity loaded onto US grids.

 

Electricity Cost: Assume a $55 million, 10 MW project consists of foundations, wind turbines, cabling to shore, and installation at $5,500/kW.

 

- Production 10 MW x 8766 h/y x 0.40, CF = 35,064,000 kWh/y

- Amortizing bank loan for 50% of the project at 6.5%/y for 20 years, 7.017 c/kWh.

- Paying Owner of 50% of the project at 10%/y for 20 years, 9.082 c/kWh

- Offshore O&M, about 30 miles out to sea, 8 c/kWh.

- All other items, 4 c/kWh 

- Total cost 7.017 + 8.468 + 8 + 4 = 27.961 c/kWh

- Less 50% subsidies (tax credits, 5-year depreciation, interest deduction on borrowed funds) 13.981 c/kWh

- Owner sells to utility at 13.981 c/kWh

 

Not included:

- Cost of onshore grid expansion/augmentation, about 2 c/kWh

- Cost of curtailment/counteracting/balancing, 24/7/365, about 2 c/kWh

- Cost of decommissioning, i.e., disassembly at sea, reprocessing and storing at hazardous waste sites

 

Floating offshore wind

 

Electricity Cost: Assume a $75 million, 10 MW project consists of foundations, wind turbines, cabling to shore, and installation at $7,500/kW.

 

- Production 10 MW x 8766 h/y x 0.40, CF = 35,064,000 kWh/y

- Amortizing bank loan for 50% of the project at 6.5%/y for 20 years, 9.568 c/kWh.

- Paying Owner of 50% of the project at 10%/y for 20 years, 12.385 c/kWh

- Offshore O&M, about 30 miles out to sea, 8 c/kWh.

- All other items, 4 c/kWh 

- Total cost 9.568 + 11.547 + 8 + 4 = 33.953 c/kWh

- Less 50% subsidies (tax credits, 5-year depreciation, interest deduction on borrowed funds) 16.997 c/kWh

- Owner sells to utility at 16.997 c/kWh

 

NOTE: If li-ion battery systems were contemplated, they would add 20 to 40 c/kWh to the cost of any electricity passing through them, during their about 15-y useful service lives! See Part 1 of URL
https://www.windtaskforce.org/profiles/blogs/battery-system-capital-costs-losses-and-aging

 

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:

 

1) Natural gas-fueled CCGT plants, that have low-cost, low-CO2, very-low particulate/kWh

2) Uranium-fueled nuclear plants, that have low-cost, near-zero CO2, zero particulate/kWh

3) Hydro plants, that have low-cost, near-zero-CO2, zero particulate/kWh

Comment by Willem Post on October 1, 2023 at 4:13pm

It is well known, wind and solar electrons bounce around much more than regular electrons.

Just kidding! As far as PHYSICS is concerned all electrons are the same

If you have too many wind and solar electrons, chaos ensues on the grid, which takes very expensive large scale battery systems to bring back under control.

So, if you have a solar bulge each day, as they do in dysfunctional California (I would be embarrassed/disgusted to be a Governor there), the cost of taming the midday bulge costs about 37.6 c/kWh passing through the batteries.

GO WOKE, GO BROKE AT THE SPEED OF LIGHT

Comment by Willem Post on October 1, 2023 at 4:12pm

BATTERY SYSTEM CAPITAL COSTS, OPERATING COSTS, ENERGY LOSSES, AND AGING

https://www.windtaskforce.org/profiles/blogs/battery-system-capital...

PART 8

Grid-scale Battery System Owning and Operating Cost for Solar Bulge Control

 

Battery systems perform various functions during a day, including absorbing the heavily subsidized, expensive, midday solar bulge, and discharging about 81% of it during the peak hours of late-afternoon/early-evening; the other 19% are system losses. The utility paid at least 10 c/kWh to the Owner, but that was reduced by about 50%, due to various financial tax shelter gimmicks, including the upfront 30% ITC. See Part 4

 

Owners want a return on investment of at least 10%/y, when bank loans and long-term Bonds are 6.5%/y.

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

 

Assumptions for Analysis

 

Assume, in the morning, the batteries are charged at about 20% full, so they can absorb the bulge to about 80% full.

On days, with little or no bulge, the batteries are charged with low-cost, night-time electricity

 

- Bank loan 50%

- State governments want Owners to have at least a 50% investment

- Megapack li-ion systems, $575/kWh for 2023. See Part 1  

- Capacity factor, 0.6

- Owner return, 10%/y for 15 years

- Amortize bank loan, 6.5%/y for 15 years

- Cost of government subsidies, 50% of total costs

- System loss, 19%, from HV AC to HV AC. See Parts 2 and 3 

- System loss, based on from HV grid at 20 c/kWh, to HV grid at 8 c/kWh

- System aging, 1.5%/y is ignored. See Part 7

 

The $0.519/kWh of throughput is significantly understated, because it is based on a very high CF = 0.6, and excludes the cost of system aging

 

All project costs are paid by ratepayers, taxpayers, and added to government debts.

http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-na...

 

NOTE: Owners of grid-scale battery systems have the real owning/operating numbers, which they do not make public, because they are “proprietary”  

 

Capacity, 1.0 MW/4 MWh

2023 pricing

Megapack li-ion, $/kWh

575

Capital cost, excludes aging, $

2300000

Energy rating, kWh

4000

Subsidies

50%

Cycles/d

365

Owner return, 10%/y for 15 y

50%

CF

0.6

Amortize bank loan, 6.5%/y for 15 y

50%

Fr. HV grid kWh/y as AC

1081481

Owner return, $/y

148296

In battery, kWh/y as DC

973333

Payment to bank, $/y

120213

To HV grid, kWh/y as AC

876000

Total payments, $/y

268509

System loss, kWh/y

205481

Other costs, O&M, insurance, etc., $/y

40000

Total cost, $/y

454725

System loss, $/y

146216

Total costs, $/y

454725

Cost, $/kWh of throughput

0.519

Paid to Owner by:

Government, as subsidies, $/y

227363

0.260

Utility ratepayers, etc., $/y

227363

0.260

Total, $/y

454725

0.519

Fr HV grid

1081481

$/kWh

0.2

$/y

216296

To HV grid

876000

$/kWh

0.08

$/y

70080

$/y, loss

146216
Comment by Willem Post on September 27, 2023 at 9:38am

Floating offshore wind is the most expensive.

It costs about $7000 to $8000 per installed kW, so 144 MW of ten 850-ft tall wind turbines will cost at least $1.2 billion, plus onshore grid expansion/reinforcement to integrate the new power, which could be about 140 MW on a very windy day or near-zero on a calm day.

Those wind turbines will be visible by anyone on shore even if they are 30 miles away, and at night they will have highly visible strobe lights. The underwater cables will render those areas off limits to fishing and lobstering.

The current state of disarray has the Owners and state governors of at least 15 offshore wind projects on the East Coast begging for even more than the current  50% of subsidies, because costs have gone from $3500/installed kW in 2021 to at least $5500/installed kW in 2023, and bank and bond interest rates have gone from 3% for 20 years in 2021 to 6.5% for 20 years in 2023, plus there  are years of project delays due to a lack of wind turbine building capacity in Europe, and a lack of specialized ships and cranes to erect these 850-ft tall wind turbines.

Comment by Dan McKay on September 27, 2023 at 6:00am

Wind power in Maine is no breeze as regulators move slowly

A deliberate move by the Maine PUC to wear down the opposition?

Comment by Dan McKay on September 25, 2023 at 5:21pm

Massachusetts and Connecticut, the two largest electricity consumers in the New England Region recognize nuclear as a renewable resource and apply certificates of renewable credit to their output. 

Build, baby, build. Save the grid.

U.S. Sen Angus King

THE UNTOLD STORY OF RECORD HILL WIND

The Untold Story of Record Hill Wind, continued

 

Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power

 

Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT

******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********

(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

Not yet a member?

Sign up today and lend your voice and presence to the steadily rising tide that will soon sweep the scourge of useless and wretched turbines from our beloved Maine countryside. For many of us, our little pieces of paradise have been hard won. Did the carpetbaggers think they could simply steal them from us?

We have the facts on our side. We have the truth on our side. All we need now is YOU.

“First they ignore you, then they laugh at you, then they fight you, then you win.”

 -- Mahatma Gandhi

"It's not whether you get knocked down: it's whether you get up."
Vince Lombardi 

Task Force membership is free. Please sign up today!

Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

© 2025   Created by Webmaster.   Powered by

Badges  |  Report an Issue  |  Terms of Service

Sign in to chat!