2023-10-09 03:45:06
After the financial exuberance, the hangover. The renewable energy sector in the United States is disillusioned. With one activity particularly affected: offshore wind turbine projects. The Biden administration aims to install 30 gigawatts of offshore wind energy by 2030 – the equivalent of thirty nuclear reactors – mainly on the east coast. the United States. Enough to power around 10 million homes, compared to practically zero currently. France is aiming for 5 gigawatts by 2028. But the projects are on the verge of collapse. Rising interest rates for debt-financed programs, soaring manufacturing and raw material costs, lack of skilled labor, failure of turbine manufacturers, notably Siemens, shortage of cables… The bill adds up projects are soaring, to the point that their promoters, most often European industrialists associated with an American operator, threaten to throw in the towel.
Spain’s Iberdrola paid $60 million (€57 million) to withdraw from two offshore wind power production agreements in Massachusetts signed in 2021 and 2019. This summer, Norway’s Equinor and Britain’s BP asked to renegotiate electricity prices for three projects off the coast of New York. The Danish Orsted and its American partner Eversource did the same thing, explaining that otherwise “they would not be able to get a final investment decision.” Orsted lost a quarter of its value on the stock market when it announced at the end of August a potential loss of $2.34 billion on its American projects, or half of its investment.
In total, the increase in the bill presented by the operators to the public authorities is of the order of 50%. Anxious to save their local taxpayers, the six governors of the coastal states concerned, notably those of New York and Massachusetts, wrote to the White House to bail out the projects. “Alas, inflationary pressures…and continued supply chain disruptions have created extraordinary economic challenges. Without federal action, the deployment of offshore wind in the United States is at serious risk of stopping.deplore the governors.
Crank return
They are asking President Joe Biden to speed up the deadlines for granting permits – which take years in a country consumed by its administrative procedures – and above all to extend the credits of the Inflation Reduction Act (IRA), the federal program of energy subsidies. This decision would no longer cover 30% but half of the project amount. In particular, operators want the considerable cost of connecting to dry land to be subsidized. Consequence of this slump: at the end of August, auctions for installations in the Gulf of Mexico came to an end. Two projects off the coast of Texas did not find a buyer, while another was awarded for $5.6 million in Louisiana to a single bidder, the German RWE.
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