World's biggest wind power projects are in crisis just when world needs them most - The Japan Times
World’s biggest wind power projects are in crisis just when world needs them most | The Japan Times
Bloomberg – Offshore wind projects are facing an economic crisis that erased billions of U.S. dollars in planned spending last week — just as the world needs clean energy more than ever.
A unit of Spain’s Iberdrola SA agreed to cancel a contract to sell power from a planned wind farm off the coast of Massachusetts. Danish developer Orsted A/S lost a bid to provide offshore wind power to Rhode Island, whose main utility said rising costs made the proposal too expensive. Swedish state-owned utility Vattenfall AB scuttled plans for a wind farm off the coast of Britain, citing inflation.
Soaring costs are derailing offshore wind projects even as demand for renewable energy soars. Extreme heat driven by climate change is straining electric grids all over the world, underscoring the need for more power generation — and adding urgency to calls for a faster transition away from fossil fuels. In Europe, the move to reduce reliance on Russian oil and gas has also given clean-energy projects momentum.
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.