Desperate governors beg for offshore wind cost relief


By David Wojick 

Six Atlantic shore Governors are begging the Feds to bail them out of a huge looming offshore wind cost overrun. They sent Biden a joint letter asking for a list of relief measures ranging from tax breaks to revenue sharing.

The outcome is far from clear but my guess is the largess is unlikely to appear, especially given the ongoing federal budget battles. Maybe later. However most of the requests also likely require major regulatory changes, which could take years. They might even take legislation which could be never.

But the need is urgent as the offshore developers are demanding immediate power price increases of around 50% lest they leave for better opportunities elsewhere. They can do this because offshore wind is a global boom. Even mid-income developing countries like Indonesia are talking big offshore numbers.

Ironically, it is this boom that is driving some of the sticker-shocking price increases. There is even a shortage of highly specialized crane ships to erect these huge towers. The supply chain is a seller’s market, at least on paper. Rising interest rates are another big driver.

The letter is pretty vague, but there are basically. three kinds of federal relief requested. These are tax credits, revenue sharing, and streamlined permitting. I am sure there is lots of lobbying going on by the developers, as well as the Governors. Unfortunately, it is all secret so the specific issues are well hidden, making the following brief analysis somewhat speculative.

The letter is here:

There look to be two tax credit issues. The first, which the IRS might actually be able to do something about, involves the definition of the renewables energy project that gets the investment tax credits. At present, probably only the generating assembly counts. This likely includes the tower and monopile foundation as well as the turbine generator and enormous blades.

But it may not include the extensive undersea connector cabling, the massive offshore substations, the huge export cabling, and the costly onshore transmission upgrades. These system components make up a sizable fraction of the project cost.

The second issue is the bonus tax credits awarded under the so-called Inflation Reduction Act. This is a 10% credit bump that developers get if they meet certain domestic content specs. Offshore wind already gets a big break under IRA because their content requirement is just half that of all other renewable projects.

As near as I can tell, they want the presently measly requirement to be even less. This is likely because most of the components come from overseas. America has very little specialized offshore component production capability since we have never built any here. Building this kind of industrial capacity will take a long time.

However, since the specific domestic component requirements are in the law, the IRS may have very little leeway, and what they have should require rulemaking. How this works out will be very interesting to watch. It might take legislation, which is uncertain, to say the least.

On revenue sharing, the States want a piece of the billions of dollars developers are paying the Feds in offshore site lease payments. Single sites have paid over a billion. Some sites are at least partially within State waters, but most are not.

Here the question is why taxpayers in, say, Wyoming should, in effect, pay to lower electricity bills in New Jersey? The agency in charge of offshore leasing is the Bureau of Ocean Energy Management (BOEM) in the Interior Dept. They are gung ho for offshore wind, so might not mind sharing revenue if it keeps the project coming.

I have no idea what the legalities are here except they are likely to be complex. BOEM has been doing offshore oil and gas leasing in the Gulf for a long time, so there should be a big body of law to deal with.

Who gets how much is an interesting question, especially for projects set to sell juice to several States. Plus, the States expect to sell some to other States. Given that many of the power purchase contracts at issue are with utilities, not States, maybe they should get the money.

For that matter, if this revenue sharing happened, the Gulf states might want a piece of the oil and gas action. None of this is simple, for sure. (Aside: maybe the Feds should collect royalties on the harvested wind power, like the 18.75% they get on offshore oil production.)

As for speeding up permitting, that is already a hot topic in Congress, but there is no consensus on what it even means, much less how to do it. I think BOEM is already going as fast as it can, ignoring many issues in the process, such as whale deaths. And, of course, the Biden Executive Branch cannot speed up the Judiciary, where a lot of the project delay lies in litigation.

In short, this seemingly simple letter is pointed at some really hairy issues. The talks are going on in secret, and I have yet to see any detailed analysis of the potential policies and ramifications thereof. If the fate of Atlantic offshore wind really depends on taking these hairy steps, then we are in “Nobody knows land” for sure. This cannot be good from the investment point of view so more stocks may drop.

Stay tuned to CFACT to see how this wacky offshore drama plays out. It might be awhile.


David Wojick

David Wojick

David Wojick, Ph.D. is an independent analyst working at the intersection of science, technology and policy. For origins see For over 100 prior articles for CFACT see Available for confidential research and consulting.

For more on offshore wind boondoggles, see our ClimateTV page

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September 25, 2023 2:05 pm

Yes, you can just add to the stack of gold bars at the homes of these northeast Senators.

Rud Istvan
Reply to  ResourceGuy
September 25, 2023 2:34 pm

Menendez says those were withdrawn from his savings over the years. He forgot to mention the FBI has DNA and fingerprints from the bribers on the cash filled envelopes he stuffed into his Menendez labeled jackets in his closet. And he forgot to mention that the FBI has the Google queries on his devices where he Googled how much a gold Kilo bar was worth when he got them (as of yesterday, about $63k each). Lots of Latino chutzpah, not gonna work.
The SDNY DA did a nice Friday presser reveal announcing the indictment. Menendez escaped his last corruption trial (helping a crooked Florida ophthalmologist defraud Medicare) on a hung jury. Not this time.

Bryan A
Reply to  ResourceGuy
September 25, 2023 2:44 pm

You mean those Rich Men north of Richmond?

Reply to  ResourceGuy
September 25, 2023 2:50 pm

Getting bribes in gold bars, that you sock away in suitcase or safe, leaves no paper trail.

The Senator, who made his career hating Russia, goes for a lunch with a lobbyist, does the favor requested, gets his lunch paid for, plus some gold bars, worth say $100,000.
Nice and compact, fits in a padded envelope.

The Senator kept half a $million in cash and cold bars at home in his safe, he testified, for “emergencies”. Oh, does not everyone?
I think he will need not only a lawyer, but also a PR consultant

I wonder, who tipped off the FBI, etc.

Biden was able to do his grifting and grafting for decades without getting caught.

He and his son finally did get caught, because former close associates had been short changed and took revenge, and his crackhead son lost his computer.

Everything was safely covered up, until the US House flipped to the GOP.
Pelose could no longer obstruct Justice, so the US DOJ was enlisted

Reply to  wilpost
September 25, 2023 3:27 pm

Could Menendez be the DOJ’s sacrificial lamb that makes Hunter’s capers seem rather benign?

Reply to  Mr.
September 25, 2023 4:44 pm

Yep. He’s the lamb to be thrown under the bus so the bolshiecrats can say they’re policing their own. He’s not of the favored democratic immunity boys since he disagreed with bathhouse barry.

Rick C
Reply to  slowroll
September 26, 2023 12:44 pm

Just a sacrifice to try and show the DOJ is not just prosecuting persecuting republicans whose name starts with T. Also a nice distraction from the investigation into a much bigger and more damaging bribery case.

Reply to  Mr.
September 25, 2023 6:39 pm

I dunno….some demrats must not like Menendez…want him out of the way…he’s already played the race card.

Reply to  antigtiff
September 26, 2023 10:38 am

They are worried that if Menendez is the candidate, the Dems could lose that seat next November.

If Mendendez’s seat was safe, the DNC would be backing him to the hilt.

Reply to  wilpost
September 25, 2023 5:06 pm

Menendez’s family fled Cuba, so they get their hatred of communism naturally.

Chris Hanley
Reply to  wilpost
September 25, 2023 5:08 pm

In DC Menendez’s offence isn’t the alleged bribery per se but being so gauche and blatant about it.

Reply to  Chris Hanley
September 26, 2023 11:23 am

In DC, Menendez’s offence isn’t the alleged bribery per se but being so gauche and blatant about it but getting caught at it.

There, fixed for everyone. 🙂

Reply to  wilpost
September 26, 2023 11:19 am

Now it’s evolved from “the best”, to the worst, politicians and bureaucrats that money can buy.

Ron Long
September 25, 2023 2:22 pm

So, the Inflation Reduction Act participates in a 50% cost increase? Maybe it is the Increased Redink Act? Worser and worser.

Rud Istvan
Reply to  Ron Long
September 25, 2023 2:49 pm

Spoken in Bidenese. Aka Big Guyese. Maybe AI will learn to translate into plain English. But unlikely any time soon.

September 25, 2023 2:25 pm

Ongoing maintenance of offshore units is pricey, but sinking them to Davey Jones Locker at the end of their useful life is a big money saver compared to the return of onshore concrete bases to nature. And because of the high maintenance cost, those reclamation savings can occur much sooner in the project.

Rud Istvan
September 25, 2023 2:25 pm

Chickens coming home to roost.
Correctly computed LCOE of CCGT is about $58/MWh. Onshore wind (using ERCOT for transmission) is about $146/MWh. ~2.5x. (Details in older guest post ‘True Cost of Wind’ over at Judith’s.) Biased EIA says offshore wind is ‘only’ 3x onshore—probably an underestimate. So at least 7.5x CCGT.

These abjectly ignorant governors want a fed bailout from their wind stupidity? NOPE.

Much better for US that offshore wind goes elsewhere—Indonesia sounds good—-until they also figure it out. And as soon as offshore wind shows up there, they probably will. All they have to do is read WUWT.

Reply to  Rud Istvan
September 25, 2023 3:03 pm

The $146/MWh is after at least 50% subsidies, such as ITC, accelerated depreciation in 5 years, and deducting loan interest. So, the actual cost is $292/MWh, which agrees with analyses I made.

There is no way, the US can be intentionally competitive with such expensive electricity

This has been the high-level goal of the EU for decades, to shame the US, self-sufficient in energy, into the wind/solar/battery black hole, using UN IPCC for global-warming scare-mongering

Rud Istvan
Reply to  wilpost
September 25, 2023 5:02 pm

If you check my post, you will see it is after subsidies, so likely you are correct.

Reply to  wilpost
September 25, 2023 5:11 pm

Accelerated depreciation does not get them more money, it just means that they get the money faster.
Why shouldn’t a company, any company, be allowed to deduct loan interest?

Reply to  MarkW
September 25, 2023 6:56 pm

OMG, please take a course in accounting

Frank from NoVA
Reply to  wilpost
September 25, 2023 9:07 pm

Accelerated depreciation for tax purposes simply allows investors to defer taxes, not avoid them. I guess the relevant question is whether offshore wind projects have more favorable tax depreciation or interest deductibility than, say, building a CCGT.

Reply to  Frank from NoVA
September 26, 2023 2:24 pm

Here is a reality check from a professional

Depreciation are deductions from taxable income.

Some companies have so much depreciation, it wipes out their ENTIRE TAXABLE INCOME, which means you and I have to make the short fall, or the government adds it to the national debt.

Reply to  wilpost
September 26, 2023 10:41 am

In other words, you can’t back up your claims.

Reply to  MarkW
September 26, 2023 2:25 pm

See my above comment to Frank

Reply to  wilpost
September 27, 2023 1:26 pm

accelerated (instantaneous) depreciation?

On December 27, 2022 I buy an $85K truck on contract; I put $5k down and agree to pay for 6 years at 4%.

I use the truck only for work (although I don’t use it much).

I deduct 80K on my 2022 taxes and owe nothing at all. I still owe $80K on the truck.

If I sell the truck in June 2023 for $75K, and simply pay off my loan with the proceeds, do I then pay taxes on the $75K?

If the windmill guys take the accelerated deprec, and transfer/sell the make believe value of the windmills, do they get to somehow completely avoid taxes?

Reply to  Rud Istvan
September 25, 2023 4:26 pm

Given all those high costs, wouldn’t it be cheaper to use daytime solar electricity to pump water up to the top of the world at the north pole, and then pull the energy out as needed, because the water will naturally flow back down during all hours, both night and day?

(asking on behalf of Hank Johnson)

Dan Davis
Reply to  DonM
September 25, 2023 5:18 pm

Also install solar hot water at Santa’s place to provide assist to get the water flowing South again. ;>)
Even more Green Jobs!

Reply to  DonM
September 26, 2023 3:31 am

At the North Pole it would probably freeze befiore it flowed very far. Nice idea, though.

Reply to  atticman
September 26, 2023 9:21 am

There is liquid water under the ice. This means the ‘reservoir’ is already there … less initial costs.

Reply to  DonM
September 26, 2023 11:31 am

The problem with that idea, as Representative Johnson will attest, is that doing so might cause the planet to flip over.

NB: the fact that Hank Johnson is still in Congress “representing” the State of Georgia speaks volumes about the average IQ of the majority of Georgia voters.

Bryan A
September 25, 2023 2:36 pm

Offshore Wind is definitely one of the Most Expensive “Free Energy” sources going followed closely by Onshore Wind and Solar PV. Nothing is more expensive than Free-Energy™

Reply to  Bryan A
September 25, 2023 2:50 pm

Actually the energy is basically all free…its the burden of financial and societal cost to find, harvest, store, transport, utilize and clean up after that varies greatly.

Reply to  DMacKenzie
September 25, 2023 3:27 pm

Actually the energy is basically all free

I have doubts about that statement.

Sunlight would be better used growing trees that hold moisture to temper the environment than hitting solar panels where it is converted to mostly heat and some electricity.

Onshore wind is quite a precious resource in most parts of the world. Robbing the wind energy reduces the advected air from oceans to land, reducing precipitation making the land drier and hotter.

There is no free lunch.

Joseph Zorzin
Reply to  RickWill
September 26, 2023 3:45 am

“Sunlight would be better used growing trees that hold moisture to temper the environment…”

And those trees can grow into valuable timber which then gets processed by many workers including loggers, truckers, sawmills, furniture and paper factories, other wood using industries, firewood, etc. All that is real wealth- not phony “free energy”. When forest owners can make some money growing trees- some will keep their forest as forest.

Bryan A
Reply to  DMacKenzie
September 25, 2023 9:34 pm

Gasoline was initially discarded
Edwin Drake dug the first crude oil well in Pennsylvania in 1859 and distilled the oil to produce kerosene for lighting. Although other petroleum products, including gasoline, were also produced in the distillation process, Drake had no use for the gasoline and other products, so he discarded them. It wasn’t until 1892, with the invention of the automobile, that gasoline was recognized as a valuable fuel. By 1920, 9 million vehicles powered by gasoline were on the road, and service stations selling gasoline were opening around the country. Today, gasoline is the fuel for nearly all light-duty vehicles in the United States.

Reply to  DMacKenzie
September 26, 2023 11:39 am

Well, that statement carried to its ultimate conclusion, is that all the energy in the universe is available free to mankind . . . it’s just “the devil is in the details” as to how mankind goes about using it.

What’s then to worry about reserves of energy on planet Earth?

September 25, 2023 3:35 pm

This headline is a lie. Offshore wind power is absolutely free, and 100% reliable YEAR ROUND. Why would you tell a lie like this? And of course all those whales and porpoises and dolphins have to die! IT IS FOR THE CLIMATE!!!!!!!!!

Reply to  2hotel9
September 26, 2023 3:34 am

Clearly, there is FREE and there is free and they are not the same…

Curious George
Reply to  2hotel9
September 26, 2023 8:08 am

Bidenomics is no match for Indonesia.

September 25, 2023 4:18 pm

‘Revenue sharing’ sounds like a half ass pay off effort, to get the other more important subsidies approved.

Don’t … Ever … accept this type of deal. Not from the feds, not from a developer, not from your brother in law.

September 25, 2023 4:18 pm

I hope the Feds do not give in. These governors should remember the old adage “Once bitten, twice shy”. They should NEVER have believed any figures quoted by the “renewables shysters”!

September 25, 2023 4:54 pm

Had the plans actually worked (stop laughing everyone), were these governors prepared to share the savings with the rest of the country?

They sold this nonsense to their voters. They should be prepared to accept the cost of being wrong.

September 25, 2023 4:59 pm

No subsidies, no tax preferences, no bailouts period. Wind and solar are not suitable for the grid. Light up all of your fossil fuel and nuclear generators and build new fossil fuel and nuclear generators. The time for playing your silly games has passed.

September 25, 2023 6:25 pm

Give it up amateurs. We’re going to be the world’s renewables economic superpower-
‘Green energy guinea pigs’: Albanese government ‘doubling down’ on renewables (
There is the odd party pooper around of course-
‘Mad insane rush to renewables’ putting nation at risk of a ‘summer shocker’ (

Reply to  observa
September 25, 2023 7:14 pm

Matt always talks total sense…

One good thing, if it is a low wind year, bush fires hopefully won’t be as bad.

Local bush around here is looking like a tinderbox…

… long dry grass, rapidly drying eucalypt and wattle undergrowth…

… totally primed, with nothing being done about it.

September 25, 2023 7:02 pm

but, but… wind energy is FREEeee !

Isn’t it. 😉

Reply to  bnice2000
September 26, 2023 3:37 am

So are coal, oil, and gas. The cost is in “harvesting” them – just like with wind.

John Pickens
September 25, 2023 8:43 pm

I hate to keep having to point this out, but these wind energy systems, when you include the turbines, installation, maintenance, power transmission, and fossil fuel or battery backup, will never, ever produce as much energy as they take to construct and operate. Indeed, it is even worse, from a CO2 balance perspective, in that the CO2 produced in construction is “front loaded” so there is more CO2 produced earlier in time. Not that there’s anything wrong with producing CO2, but that is supposedly the reason these monstrosities are being built in the first place!

Reply to  John Pickens
September 26, 2023 3:39 am

And the warmunists wonder why CO2 levels keep rising despite all their efforts…

Joseph Zorzin
Reply to  John Pickens
September 26, 2023 3:53 am

When I saw a video of how much concrete goes into a foundation for a wind turbine- it was obvious that these monsters can’t be considered “clean and green” nor cheap. The foundations will be there thousands of years from now. Somebody should determine the cost to remove a foundation and add that to the true cost of the turbine.

general custer
September 25, 2023 9:19 pm

Existing contracts must be renegotiated or no offshore turbines.

Reply to  general custer
September 26, 2023 10:20 am

Oh dear.
So sad.
Never mind.


September 25, 2023 10:13 pm

You made your bed, lie in it.

Joseph Zorzin
Reply to  Shoki
September 26, 2023 3:57 am

Gov. Healey of Wokeachusetts is now whining about a housing shortage- partly as a result of a massive influx of illegals- which she and her cronies encouraged because they like and promote sanctuary cities. I’ve read that it now costs the state 45 million/yr to house the illegals in hotels and motels.

Joseph Zorzin
September 26, 2023 3:38 am

I see at the end of their letter:

In short, we urgently need prompt federal action to ensure that States can move forward now with offshore wind projects that will deliver significant domestic manufacturing, labor, and community benefits for both current and future generations.

Deliver significant …. benefits? That’s absurd.

September 26, 2023 4:59 am

Anyone notice Nick Stokes is missing from the discussion?

Michael in Dublin
September 26, 2023 6:45 am

I want to commend David Wojick and other writers on this site as well as commenters for giving links to sources and documents they refer to. The same cannot be said for many alarmist journalists and commentators. I find these particularly useful because when commenting on sites unfriendly to WUWT I refer to the primary sources and sometimes quote more fully from them. There are more ways than one to skin a cat and to outmanoeuvre alarmists. 😉

CD in Wisconsin
September 26, 2023 7:23 am

“Desperate governors beg for offshore wind cost relief”

Reminds me of the movie Jerry McGuire. SHOW ME THE MONEY!!

Dave Andrews
September 26, 2023 9:36 am

Re the shortage of ships to build offshore wind farms Wind Europe warned in June 2022 that there was a looming shortage of the three types of specialised ships required which “poses risk for project execution worldwide” –

  • Foundation Installation Vessels (FIVs)
  • Wind Turbine Installation Vessels (WTIVs)
  • Cable Laying Vessels (CLVs)

In a further press release in June 2023 they reiterated that ” FIVS were fully booked for several years” and that “foundation manufacturers” were also fully booked for years

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