Orsted Quits Norway Offshore Wind Venture as Cost Crisis Deepens - Bloomberg
Orsted Quits Norway Offshore Wind Venture as Cost Crisis Deepens - Bloomberg
Orsted Quits Norway Offshore Wind as Cost Crisis Deepens
- Company made third-quarter loss after cutting back US projects
- Entire industry faces higher costs for financing, components
Orsted is at the center of a crisis for the offshore wind industry with companies struggling to fund large developments. Photographer: Carina Johansen/Bloomberg
Orsted A/S has withdrawn from a partnership developing offshore wind projects in Norway as the company grapples with big losses resulting from rising costs.
Orsted quit a consortium with Fred. Olsen Renewables AS and Hafslund Eco citing “a prioritization of investments” in its portfolio, according to the company. The pullback is a further sign of how the world’s largest developer of wind farms is scaling back after being forced to cut some US projects, which resulted in a third-quarter net loss.
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Orsted Quits Norway Offshore Wind as Cost Crisis Deepens
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.