I am sharing this information with regard to what is going on with offshore wind in the U.S. since it reflects for the most part what is happening with this market worldwide.
The following is a reposting of an article published by Reuters yesterday.
January 3, 202410:08 PM GMT • Updated 18 hours ago
Jan 3 (Reuters) - European energy firms Equinor (EQNR.OL) and BP (BP.L) terminated their agreement to sell power to New York state from their proposed Empire Wind 2 offshore wind farm, citing rising inflation, higher borrowing costs, and supply chain issues.
"This agreement reflects changed economic circumstances on an industry-wide scale and repositions an already mature project to continue development in anticipation of new offtake opportunities," Equinor said in a statement on Wednesday, in an apparent reference to a new offshore wind solicitation launched by New York in November.
The solicitation allows companies to exit old contracts and re-offer projects at higher prices. The winners of an expedited solicitation for offshore wind will be announced in February.
An Equinor spokesperson declined to comment on the bid strategy for the 1,260-megawatt (MW) Empire Wind 2 project, but said it was "carefully assessing" the solicitation and was "encouraged by the state's commitment to offshore wind."
The power sale agreement for the 816-MW Empire Wind 1 remains in place, the spokesperson added. One megawatt of offshore wind can power around 500 U.S. homes.
The offshore wind industry is expected to play a major role in helping U.S. President Joe Biden and several states, including New York, meet their goals to decarbonize the power grid and combat climate change.
But progress slowed in 2023 after offshore developers canceled contracts to sell power in Massachusetts, Connecticut and New Jersey, and threatened to cancel agreements in other states, as soaring inflation, interest rate hikes and supply chain problems increased project costs.
New York accelerated its solicitation in October after several developers, including Orsted (ORSTED.CO), the world's biggest offshore wind company, BP and Equinor, threatened to cancel contracts to sell power that were awarded in 2019 and 2021 before the Federal Reserve started hiking interest rates in March 2022 to fight soaring inflation.
"Empire Wind 2 has been 'at risk' since the project developers made clear in their June 2023 petition that they would not move forward under the current contract," said Timothy Fox, managing director at ClearView Energy Partners.
New York's first offshore wind farm, Orsted's 132-MW South Fork, provided its first power in December.
In Massachusetts, Avangrid (AGR.N) and Copenhagen Infrastructure Partners said on Wednesday their 806-MW Vineyard Wind 1 project produced first power for the New England grid.
Avangrid is majority-owned by Spanish energy company Iberdrola (IBE.MC).
Reporting by Deep Vakil in Bengaluru and Scott DiSavino in New York; Editing by Richard Chang
The following is a reposting of the Reuters article regarding “a new offshore wind solicitation launched by New York in November” 2023 as linked above.
November 30, 2023 10:25 PM GMT• Updated a month ago
Wind turbines operate at sunrise in the Permian Basin oil and natural gas production area in Big Spring, Texas, U.S., February 12, 2019. Picture taken February 12, 2019. REUTERS/Nick Oxford//File Photo
Nov 30 (Reuters) - New York released a new offshore wind solicitation on Thursday to keep the state on track to meet its renewable energy goals and support a nascent industry that has faced financial trouble in recent months.
Offshore wind is expected to play a major role in New York's plan to reduce carbon emissions by getting 70% of the state's electricity from renewable sources by 2030. It is also a pillar of President Joe Biden's plan to decarbonize the U.S. power grid and combat climate change.
The state said it is supporting the development of 9,000 megawatts (MW) of offshore wind by 2035, enough to power up to six million homes.
There are, however, no offshore wind farms operating in New York. The first - Danish energy firm Orsted's (ORSTED.CO) 132-MW South Fork project - is expected to produce its first power before the end of the year.
The New York State Energy Research and Development Authority (NYSERDA), which runs the renewable solicitations, welcomed "all project developers, including those that previously petitioned the New York State Public Service Commission for financial relief and new market entrants, to compete in the solicitation process."
Offshore wind developers have threatened in recent months to cancel contracts to sell power in New York after earlier dropping agreements in Massachusetts, Connecticut and New Jersey as soaring inflation, interest rates and supply chain problems led to much higher costs to build projects than anticipated.
European energy companies Orsted, Equinor (EQNR.OL) and BP (BP.L) have taken a combined $5 billion of writedowns on U.S. offshore wind projects that are mostly in development, in part because their existing power sales contracts would not cover the cost of building and financing the projects.
OPEN TO ALL BIDDERS
The new solicitation will be open to all bidders, including those with existing contracts. This would allow the companies to re-offer their planned projects at higher prices and exit their old contracts.
The companies had threatened to cancel their existing power sales contracts after failing to convince the New York Public Service Commission (NYPSC), the state's utility regulator, to renegotiate the old contracts at higher prices.
Those offshore wind contracts, which were awarded in 2019 and 2021 before interest rates and inflation soared, were for Orsted's 924-MW Sunrise, and the Equinor/BP joint venture's 816-MW Empire Wind 1, 1,260-MW Empire Wind 2 and 1,230-MW Beacon Wind.
"While we review the RFP and determine our next steps, we know that ready-to-build projects like Sunrise Wind are the only offshore wind farms that can be delivered within the next several years," said a spokesperson for Orsted and Eversource, partners in developing South Fork, the first U.S. offshore wind farm.
In a positive sign for offshore developers hoping to get more money for the power they will produce, NYSERDA awarded three offshore wind contracts on Oct. 24 at higher prices than the earlier projects bid by Orsted, BP and Equinor.
NYSERDA said final proposals in Thursday's solicitation are due by Jan. 25 with award announcements expected in February.
Reporting by Scott DiSavino in New York and Nichola Groom in Los Angeles, additional reporting by Deep Vakil and Sherin Elizabeth Varghese in Bengaluru; Editing by Stephen Coates and Barbara Lewis
How is it that big wind developers appear to be able to control government bodies in relation to the profits they will make from offshore wind contracts in the U.S.?
Are vested interests and thus conflicts of interest involved? I would be very surprised if there aren’t any.
great read! big wind developers seem to act in a similar way (bullying us, bribing politicians and being able to enforce policies) and have similar interests as Big Oil. same players too, no...? it's the newest scam du jour and it needs to be exposed by authors/researchers as yourself. big TQ for all the work you do!
"Renewables" are just the latest scam to promote wealth transfer. Taxpayers fund these projects while the uber-wealthy collect the subsidies paid for by taxpayers. No form of energy should be subsidized, then renewables will fade away except perhaps for small-scale (like a little windmill in your garden).
great read! big wind developers seem to act in a similar way (bullying us, bribing politicians and being able to enforce policies) and have similar interests as Big Oil. same players too, no...? it's the newest scam du jour and it needs to be exposed by authors/researchers as yourself. big TQ for all the work you do!
"Renewables" are just the latest scam to promote wealth transfer. Taxpayers fund these projects while the uber-wealthy collect the subsidies paid for by taxpayers. No form of energy should be subsidized, then renewables will fade away except perhaps for small-scale (like a little windmill in your garden).