Nick Pope
Contributor
The two firms behind a major offshore wind project decided to cancel a contract to supply power from the development on Wednesday, dealing a major blow to President Joe Biden’s massive green energy agenda.
Equinor and British Petroleum (BP), the firms working in a joint venture to construct the enormous Empire Wind 2 offshore wind farm, canceled a contract with New York state to sell power generated by the project, citing inflationary pressures, high interest rates and supply chain problems, Equinor announced. The cancellation stands as the latest sign of trouble for the offshore wind industry, which the Biden administration is counting on to produce enough energy to power 10 million American homes for one year by 2030.
“Commercial viability is fundamental for ambitious projects of this size and scale. The Empire Wind 2 decision provides the opportunity to reset and develop a stronger and more robust project going forward,” Molly Morris, president of Equinor Renewables Americas, said in a statement. “We will continue to closely engage our many community partners across the state. As evidenced by the progress at the South Brooklyn Marine Terminal, our offshore wind activity is ready to generate union jobs and significant economic activity in New York.” (RELATED: Offshore Wind Farms Are Killing Whales ‘In Numbers Never Seen Before,’ Trump Says)
Biden’s Climate Bill Boosted An Offshore Wind Giant, But His Economy Brought It To The Brink https://t.co/AF7SPT2FNu
— Daily Caller (@DailyCaller) November 3, 2023
The two companies had signaled that their projects were facing financial troubles, signing onto a petition to New York officials in September 2023 seeking to renegotiate their contracts to account for economic problems that are dogging the wider offshore wind industry. The contract’s cancellation does not necessarily mean that the project is permanently terminated, but the firms will have to renegotiate the development at a higher price from the state in order to get back on track, according to Reuters.
“Politicians may try to resuscitate it, but this extends offshore wind’s losing streak, which is quite impressive,” Dan Kish, a senior research fellow for the Institute for Energy Research, told the Daily Caller News Foundation regarding the project and its future prospects. “Even with Biden’s Green New Deal slathering cash all over these things, they can’t seem to grease the skids enough to make these things work.”
The problems facing offshore wind are widespread and severe enough that several energy policy experts previously told the DCNF that they expect the federal government to step in to effectively bail the industry out.
In October, Ørsted, the world’s largest offshore wind developer, pulled the plug on two major projects off the New Jersey coast, and several other developers have paid hefty fines to get out of agreements to sell power from their projects in other states.
A large proportion of the projected power output from industrial-scale offshore wind projects is under considerable financial duress, and Biden’s 2030 goal appears to be firmly out of reach at this point in time, according to Reuters.
The White House, the Department of Energy and the office of Democratic New York Gov. Kathy Hochul did not respond immediately to requests for comment. BP referred the DCNF to Equinor when contacted for comment, and Equinor did not respond immediately to the inquiry.
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Glad to see it crashing down! Years ago I just knew this stuff was not sustainable, it did not add up.
With any luck the winds of time will reveal the true reason as one of insufficient Government $$$ to provide financial viability for the High Cost Wind Fiasco. Perhaps their problems will blow over after the project is revealed to be Dust in the Wind
Not Government $$$, the Government doesn’t have any money, it is all taxpayers money that the Government is wasting.
probably temporary, unfortunately
Very few of the developing countries where around 90% of the people live are going along with the so-called “climate Chang” agenda.
They have said their priority is growth, not CO2.
China and India, the biggest two of the group have said they aren’t going along with the agenda any time soon.
If worldwide fossil fuel consumption has increased almost 60% during the last 28 years, it has become obvious to many renewable energy proponents that their products just can’t compete, particularly since they’re neither cheaper for consumers nor particularly reliable as well. The irony in all this is that this 28 year period coincides with the beginning of the COP conferences in 1995. So instead of reducing coal, oil and natural gas usage as well as their associated emissions, the COPs have seen the opposite happening, despite the billions that have been spent on these new climate initiatives. The projects like the above are being cancelled because the developers have been reminded that to continue with them would be yet another classic case of throwing good money after bad.
But without hydrocarbon energy, all those attendees could not get to the COP conferences via private and commercial jets.
If there were no crisis requiring such extravagant travel, they would have to invent one.
Just think if all that money had been wisely spent- or not taken from the taxpayers and they got to spend it- or, if much of it was debt, then we wouldn’t have the debt.
Bg failures like these for major offshore wind projects, or frankly, any complex heavy industry project. Sets gov plans off by years. A rush now to
A rush to meet an arbitrary gov deadline simply won’t be done. To start it going again, anyone who has to accept the risk will redo design/costing meticulously and probably would add a hefty contingency. These companies aren’t building for a client; they are essentially building for themselves. They are talking hikes of 40% or more than original estimates. Heads of state who run their economies into bottomless pits are scary to do business with.
Partly it’s contingency the other side is that the government will lock them into a max price. The big firms know this type of power generation will cash in massively in future as more intermittent generation is added.
They know shortages will become permanent and that means gold mines of future revenue
Contracts for future power produced by offshore wind turbines can’t meet the cost of the construction. Equinor and Ørsted probably can’t borrow the fantastic sum of money needed to get it done. Somebody needs to issue bonds for it that no one will buy because investors aren’t as crazy as the climate anxious.
It’s now a race to see if the wind turbine companies can restructure their bids and get more money out of New York or Federal financing before the elections. Biden might delay them in the vain hope of getting a Democrat as next President rather than risking this becoming another election issue.
Kill birds (mostly raptors). Kill whales. Windmills aren’t very environmentally friendly–are they?
Also kill bats and insects.
And reliable electricity grids
I won’t cry for the insects.
Insects are an extremely valuable part of the ecosystem. 🙂
The US government doesn’t have to do anytging for this project to get back on track. They just need to wait until the cost of wind energy – which we’re told is one of the fastest-falling numbers on the planet after Arctic ice (or was it polar bears or the Great Barrier Reef) – comes down enough.
Which will NEVER happen!
Moore’s Law or more Laws it’s all the same to leftist lizard brains.
As I’m sure everyone on this site knows, Moore’s Law only applies to the cost of solid state devices (computers, cell phones, TVs) and NOT to the costs that are involved in the construction of an industrial wind generating site in the ocean (or even the manufacture of EVs).
The costs of concrete, steel, hourly labor, transportation to the site, and rare minerals are NOT going to be significantly reduced as volume increases.
Maybe the cost for the turbines and blades is coming down- I don’t know- but the installation cost ain’t ever gonna come down. Same with solar- the panels could be free- won’t make much difference to the installation cost- on ever more expensive land, labor and grid costs.
Thanks Mike, I needed a grin this morning, now I can go walk the dog/
More good news.
Fire up all fossil fuel and nuclear generators. Build new fossil fuel and nuclear generators. Remove all wind and solar from the grid.
Everyone will have dependable energy at a reasonable cost and we can waste federal dollars on something else.
All those Green Jobs … Does removal, remediate or cleanup, and disposal of obsolete solar & wind refuse count as a Green Job?
Green or not it would be constructive.
Story tip
Big lithium battery fire in Sydney
Commercial building fire spreading smoke across Sydney’s inner west (msn.com)
ps, News is saying it right next to a petrol station….. Sounds like great fun .. not !
Another link
Authorities investigate cause of fire at Sydney e-bike workshop | Sydney | The Guardian
Too funny …investigate, when we know they won’t blame the batteries .
Just like the car park fire wasn’t blamed on an electric vehicle ….just like all the other previous car park fires that historically happened…..
Or the ship car carrier fires that were common before electric cars too. NOT
Close yer eyes and stick yer fingers in yer ears and go ting-aling-aloo!
Sydney: Delivery drivers hurt after fire sparked by e-bike (9news.com.au)
I think the fix is in. They can’t blame anything else for the fire so they are pointing the finger at ‘faulty’ lithium batteries, something that’s been echoed in reports into different fires. Point the finger at unspecified ‘faulty’ batteries (implying that genuine, high-end, properly produced lithium batteries would never start a fire), call for ‘more (unspecified) regulation’ of lithium batteries then do absolutely nothing until the next one, and the next and so on.
One little bump, and a lithium battery can become faulty.
Not a great idea to blame it on “faulty batteries” when “faulty” is a built-in feature.. !
We’ve all seen the Hollywood version of exploding cars a thousand times, and we know these spectacular events are just not possible, cars do not leap into the air when set on fire. Enter the EV (or do we call them “new energy” vehicles now?), now there’s no need for the SFX explosives guys to get involved!
I read somewhere BYD sell more EVs than Tesla in the UK (or somewhere outside China)
Seems they are trying to burn the country down, economically and literally.
Unfortunately they are still going to build this monster just at a much high price, say up 50% or more. The industry is passing through a global cost spike. The Brits have already agreed to the new high prices and NY will to. They really want this bitter green juice.
And here in upstate NY we are sitting on the Marcellus and Utica shale formations, which we could develop to increase our own natural gas supplies and install more CCGT units. And NY has a fracking ban in place. It is nuts.
Same as the UK. Utter madness 😒
And, I think, those shale formations are huuuge. Could be shipping cheap gas to New England. Instead, we get gas from boats from who knows where. Russia?
These very same formations extend into Pennsylvania and helped that state with its finances.
Canada’s supplying most of the gas that the US used to get from Russia but there’s still a lot that’s being supplied my ‘middle-men’ countries from Russia.
The US imports almost no gas from anywhere other than Canada. Trinidad provides an occasional LNG cargo for Boston. It used to be a major supplier in the past.
EIA data on imports:
https://www.eia.gov/dnav/ng/ng_move_impc_s1_a.htm
Net Zero is nuts. And getting nuttier as climate alarmists try to force the matter by throwing more money at it. I assume they will continue until it all falls down around their ears.
Net Zero is not going to happen, so if ones hopes are on Net Zero, you need to rethink your position.
All Net Zero will accomplish is to bankrupt those foolish enough to try to implement it. Which includes all the Western Democracies.
We are getting closer to Idiocracy every day. Let’s see if the 2024 elections change this course.
President Trump needs to get rid of a lot of idiocrats. Send them packing. And he will, if given the chance.
Blasphemy! You owe a gazillion hail Marie’s for that.
Thank God. The whales and our aerial animals have been spared. After years of government subsidies and still these companies face challenge’s. The business model was/is simply no good.
If anyone killed an eagle- by mistake or purposefully- you’d be in a heap of trouble. Unless it’s your wind turbine. I think killing an eagle is now a felony- unless, again, it’s your turbine.
Those companies should think about investing in nuclear electricity generation. It’s cheaper.
From the article: ““Even with Biden’s Green New Deal slathering cash all over these things, they can’t seem to grease the skids enough to make these things work
”The problems facing offshore wind are widespread and severe enough that several energy policy experts previously told the DCNF that they expect the federal government to step in to effectively bail the industry out.”
That’s always the Leftwing solution: Throw more taxpayer money at it. That way they look like they are doing something even if it doesn’t work.
The solution is rein in the federal government’s power as much as possible/necessary. You won’t get that with Democrat rule.
Most of the voters in polls in the US support finding alternative energy sources to fossil fuels. Even two-thirds of the Republicans under 30 support it. Playing to the voters is politics as usual.
The whole wind/solar thing is nothing more than rent-seeking by those able to influence politicians to fund their pipe-dreams. Solyndra was a prime example. It’s nothing more than the rich and powerful feeding their cronies with taxpayer dollars.
rent seeking: sucking at the taxpayer teat while providing no increase in productivity in return.
You sure do use a lot of words to say “Parasites”
David Wojick: “Unfortunately they are still going to build this monster just at a much high price, say up to 50% or more. The industry is passing through a global cost spike. The Brits have already agreed to the new high prices and NY will too. They really want this bitter green juice.”
Growing competition for the industrial resources needed to build new energy infrastructure — all classes of enegy infrastucture, not just wind, solar, and battery storage — that growing competition means that every dollar spent on low energy density renewables is a dollar which is not available for constructing new-build gas-fired and nuclear generation.
Which means that it will not be possible to fully replace our legacy coal-fired, gas-fired, and nuclear generation power plants as these are being systematically shut down without spending huge sums of money which far exceed the sums spent to originally acquire those legacy energy systems.
Take the permanent closure of the two Indian Point reactors in New York state with the loss of 2 GW of reliable generation capacity, a decision which is now impossible to reverse.
The two Indian Point units, completed in 1976, cost approximately 3 billion dollars to originally construct as stated in 2023 dollars. A replacement two-unit nuclear facility using cookie-cutter 1,100 Mw AP1000 reactor designs as used at Vogtle 3 & 4 would likely cost from 35 to 40 billion dollars, ten times what the equivalent legacy reactors cost in 1976.
It wasn’t NRC over-regulation which caused this steep rise in the real cost of building an equivalent nuclear energy facility. It was the systematic deindustrialization of the United States and of other western nations which destroyed the highly robust and diverse industrial base needed to support cost effective construction of all classes of energy infrastructure, not just nuclear.
The oncoming forced shutdowns of our legacy coal-fired and gas-fired power generation capacity without adequately reliable replacement is a looming disaster of considerable proportions.
Once those plants are gone, only a portion of the lost capacity can be recovered through new-build construction. Strictly enforced energy conservation measures must cover the gap, because there won’t be any practical alternative. Enforced energy rationing, in other words.
“power 10 million American homes for one year”
Aside from the normal problems of what to do when the turbines are becalmed or feathered, how are they planning to power those 10 million homes the following year???
(Yes, I know, as usual they don’t know the difference between megawatts and megawatt-hours)
I guess Bidenomics is working.
Don’t think for a minute that east coast US wind is down and out. This is just a little speed bump. Democrats have too much political investment in this save the planet grow the economy hoax. There’s never been an energy boondoggle that couldn’t be saved by federal loan guarantees that are like student loans: Repayment is optional. Watch for it. Sorry about that.
The federal loan guarantees didn’t help save Solyndra.
WORLD’s LARGEST OFFSHORE WIND SYSTEM DEVELOPER ABANDONS TWO MAJOR US PROJECTS AS WIND BUST CONTINUES
https://www.windtaskforce.org/profiles/blogs/world-s-largest-offshore-wind-system-developer-abandons-two-major
Empire 2 capacity is 2100 MW, turnkey cost of at least $10 billion.
It has been cancelled, because it was bid at $107.5/MWh, whereas it needs $177.84/MWh to be profitable, per corporate standards.
US fossil fuel, hydro and nuclear electricity costs an average of about $50/MWh, wholesale. It would be suicidal for the US to go the European wind/solar route.
Such low bidding shows the developers believed their own propaganda, which did not reflect market realities.
The US has trade deficits well in excess of one $TRILLION each year
The federal budget deficit is about two $trillion in 2023, because of Democrat “pump priming”
The open border adds at least $200 billion each year and growing.
Ukraine added $100 billion plus in 2023
It looks like the US is an out-of-control, drunken sailor regarding spending money.
New York State had signed contracts with EU big wind companies for four offshore wind projects
Sometime later, the companies were trying to coerce an additional $25.35 billion (per Wind Watch) from New York ratepayers and taxpayers over at least 20 years, because they had bid at lower prices than they should have.
New York State denied the request on October 12, 2023; “a deal is a deal”, said the Commissioner
Owners want a return on investment of at least 10%/y, if bank loans for risky projects are 6.5%/y, and project cost inflation and uncertainties are high
The about 3.5% is a minimum for all the years of hassles of designing, building, erecting, and paperwork of a project
The project prices, with no subsidies, would be about two times the agreed contract price, paid by Utilities to owners.
The reduction is due to US subsidies provided, per various US laws
All contractors had bid too low. When they realized there would be huge losses, they asked for higher contract prices.
It looks like the contract prices will need to be at least $150/MWh, for contractors to make money. Those contract prices would be at least 60% higher than in 2021
Oersted, Denmark, Sunrise wind, contract price $110.37/MWh, contractor needs $139.99/MWh, a 27% increase
Equinor, Norway, Empire 1 wind, contract price $118.38/MWh, contractor needs $159.64/MWh, a 35% increase
Equinor, Norway, Empire 2 wind, contract price $107.50/MWh, contractor needs $177.84/MWh, a 66% increase
Equinor, Norway, Beacon Wind, contract price $118.00/MWh, contractor needs $190.82/MWh, a 62% increase
https://www.windtaskforce.org/profiles/blogs/liars-lies-exposed-as-wind-electricity-price-increases-by-66-wake