The following article was in today’s Bloomberg. It is copied below.
Biden’s 2030 Wind Goal Looks Like It Simply Won’t Happen
By Will Wade and Jennifer A Dlouhy
October 18, 2023
As the price of construction climbs, developers are rapidly revising their plans — at great cost.
When President Joe Biden in 2021 laid out a target of deploying 30 gigawatts of offshore wind capacity during the next nine years, the plan was deemed bold and ambitious. Best of all, many saw it as within reach.
Two years later, the industry has another word for it: impossible.
After a cascading series of setbacks, from sobering cost revisions to billions in possible impairment charges, the US offshore wind industry’s 2030 generation goal now looks further away than ever.
One figure of interest in the article is in the caption below, in italics. I had mentioned in an earlier email that the Bid price in the UK for offshore wind was about $75/MWh to make it viable, however it would likely be higher in the US because of the lack of Jack Ships to do the installation and the longer supply lines to get material from Europe to the US. The caption from Bloomberg says that it’s $114/MWh, 52% higher than in the UK and almost triple what the current wholesale electricity cost is in NY State. On my most recent Con Ed bill, I paid $.0822/KWh or $82.20/MWh for retail electricity. That is $32/MWh less than what the wholesale cost of offshore wind is, at present. When I checked, the wholesale cost was $42.30/MWh, 37% of the cost of the Offshore wind.
In an industry where weather puns run rampant, developers have called America’s challenging environment for offshore wind a “storm of inflation” battered by “headwinds.” Although the more than a dozen sites planned off the coast of the Eastern US made financial sense when they were first modeled years ago, costs for every component of the multi-billion-dollar projects have skyrocketed, from the raw materials that go into the towering structures to the corporate credit that finances them. Just two years ago, companies were making plans — and signing massive power purchase agreements — based on a projected cost of $77 per megawatt hour, BNEF calculates. Today, it’s jumped 48% to $114.
Another line from the article states the following:
Companies may participate in a new round of auctions, though whether the developers can square their costs with households’ needs remains to be seen.
On my most recent Con Ed bill, I paid $.0822/KWh or $82.20/MWh for retail electricity. That is $32/MWh less than what the wholesale cost of offshore wind is at present, according to Bloomberg. When I checked, the wholesale cost of electricity in NY State was $42.30/MWh, 37% of the cost of the Offshore wind. It will be extremely difficult to nearly impossible for Offshore wind to be a cost effective alternative in the current economic climate
Additionally, it discusses major delays in these projects which will leave polluting fossil fuel plants running far longer.
Rich