Ørsted abandons Norway offshore wind consortium as cost crisis continues (OTCMKTS:DNNGY) - Seeking Alpha
Ørsted abandons Norway offshore wind consortium as cost crisis continues (OTCMKTS:DNNGY) | Seeking Alpha
Ørsted abandons Norway offshore wind consortium as cost crisis continues
Ørsted A/S (DNNGY) By:
Carl Surran, SA News Editor
6 Comments PARETO/E+ via Getty Images
Ørsted ( OTCPK:DNNGY) has pulled out of a group that was due to bid for offshore wind projects in Norway, one of its partners said Monday, in the latest effect of the company's struggles from sharply higher costs.
Ørsted ( OTCPK:DNNGY) told Reuters it decided not to prioritize offshore wind development in Norway for now as it seeks to adjust its business development and bidding activities.
The world's largest offshore wind developer had teamed with Fred. Olsen Seawind and Norwegian power producer Hafslund to form the Blaavinge consortium in 2021 to take part in planned offshore wind tenders in Norway.
The government had set a November 15 deadline for submitting interests to pre-qualify for a bottom-fixed offshore wind tender, where it plans to offer support for building up to 1.5 GW of capacity.
Ørsted ( OTCPK:DNNGY) recently killed two U.S. offshore wind projects, as costs ballooned due to rising interest rates and supply bottlenecks.
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Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.