Global warming, climate change, all these things are just a dream come true for politicians. I deal with evidence and not with frightening computer models because the seeker after truth does not put his faith in any consensus. The road to the truth is long and hard, but this is the road we must follow. People who describe the unprecedented comfort and ease of modern life as a climate disaster, in my opinion have no idea what a real problem is.
The world’s largest offshore wind developer, backed by the government of Denmark, is on a deliberate collision course with the Trump Administration.
The battleground is Sunrise Wind, a 924 megawatt (MW) offshore wind project located roughly 30 miles east of Long Island’s Montauk Point. Orsted just raised almost $10 billion, two-thirds of which is reportedly aimed at building Sunrise.
Sunrise has all its federal permits, but offshore construction has yet to begin, or, as the industry puts it, there is no “steel in the water.” The Trump administration has vowed to stop all offshore wind projects that are not already under construction, so Sunrise must be in the federal crosshairs.
One would think Orsted would simply hold off on Sunrise until Trump leaves, but their financial condition looks perilous, so they likely need Sunrise to survive. This makes the looming battle very interesting.
Even more interesting is that Orsted’s majority shareholder is the Government of Denmark. In a very real sense, this is two national governments facing off.
The fundraising exemplifies Orsted’s distress. They basically sold their existing stockholders a bunch of new stock at a hefty discount. TheMaritime Executive puts it this way:
“Danish offshore wind giant Orsted has raised $9.4 billion by selling new shares to existing stockholders at a steeply discounted price. With 99 percent of the new shares sold immediately and the remaining one percent swiftly sold to the public, the firm is now on firmer financial ground as it faces market headwinds and political risk in its core markets.”
“Orsted sold the shares at a price of 66 Danish kroner each ($10.30), a fraction of the stock’s publicly-traded price of about 120 kroner and a third of the most recent peak, 180 kroner, reached in early August. Just five years ago, when Orsted’s prospects seemed brighter and it was expanding into new markets, its stock briefly traded above 600 kroner.”
That the Trump administration will try to stop Sunrise Wind before it begins offshore construction is almost certain. In fact, the administration is already trying to stop Orsted’s $6 billion Revolution Wind project which has a lot of steel in the water. Many of its monopiles have been driven, and a few turbines erected, so it is maybe 50% along (unlike much higher press reports).
The Revolution Wind stoppage is in litigation, which has been widely misreported. A federal judge issued a temporary injunction blocking the administration’s stop work order pending trial, but this has been wrongly reported as the judge having quashed the order.
The judge merely ruled that there was a reasonable possibility of Orsted winning the lawsuit against the stop-work order, so preorder status quo was maintained pending that action. This is standard equity law, so no judgement has been made in the actual stop work lawsuit. Orsted is rushing to get as much built as possible in the interim.
As my CFACT colleague Collister Johnson points out, the Revolution Wind case is basically a federal contract dispute and there is a separate court for hearing these. Thus, the Revolution Wind stoppage case is far from over; in fact, it has yet to begin.
If the administration can stop Revolution Wind, it can certainly stop Sunrise, which has no steel in the water. Revolution and Sunrise, while struggling, look to be Orsted’s best bet for new cash flow, so this issue may be critical for them.
What this $10 billion battle with the Trump administration means for Orsted’s Danish government owner remains to be seen.
Stay tuned to CFACT as this international drama unfolds.
Last month Claire Coutinho wrote to the new Chair of the CCC to complain that their costings for offshore wind power used in Carbon Budget 7 were woefully understated:
Last month Claire Coutinho wrote to the new Chair of the CCC to complain that their costings for offshore wind power used in Carbon Budget 7 were woefully understated:
Topping has now replied with an object lesson in obfuscation, failing to address the issues raised. This is they key part of his response:
We have known for years that the LCOE costings produced by BEIS in 2023 were highly flawed where wind power was concerned. I won’t go into detail, as it has already been well covered by Andrew Montford and others. Suffice to say, BEIS used impossibly optimistic assumptions about the capital costs and load factors.
In addition, they also assumed a 30-year life for offshore wind, with no loss of efficiency. Above all, they worked on a hurdle rate – i.e. Return on Capital – of 6.3%. Interest rates when the report was written were still rock bottom, as they had been since the 2008 crash. Since then, they have gradually returned to historic norms. The LCOE measures not just “costs” but also finance costs/profit margins.
There is simply no way that Orsted or anybody else could finance wind farms at 6.3% anymore. That is why they pulled out of Hornsea earlier this year, even with a current price of £85/MWh.
There’s a useful tool on the BEIS website, here, in Annex B, which allows you to tweak the model. Their costing for offshore wind worked out at £43.17/MWh, at 2021 prices.
Increasing the hurdle rate to 10%, reducing life to 25 years and load factor from 64% to 45% increases that cost to £79.54/MWh – equivalent to £102/MWh at today’s prices. It is no coincidence that this is the sort of price AR7 will likely end up at.
Which all goes to show that you can make up pretty much whatever numbers you want! BEIS quite deliberately understated costs. In turn this has allowed successive Ministers and the CCC to gaslight the public and claim that renewables are cheaper than gas power.
The bottom line, of course, is that if the CCC’s costings really are correct, why is Ed Miliband offering to pay wind farms twice that cost, which already includes their profit margin?
If Miliband’s plans go ahead, we will soon be paying for 200 TWh a year of offshore wind, meaning the CCC have understated the cost of Carbon Budget 7 by £7 billion a year.
Orsted shares crashed more than 25% on Monday morning, after the wind farm developer said it plans a 60 billion Danish kroner ($9.4 billion) rights issue, following a “material adverse development” in the U.S. market.
Update August 11, 2025Shares of Orsted, the world’s largest offshore wind developer, plummeted today.
Orsted shares crashed more than 25% on Monday morning, after the wind farm developer said it plans a 60 billion Danish kroner ($9.4 billion) rights issue, following a “material adverse development” in the U.S. market.
The company said this turn of events left it unable to raise funds from a planned partial divestment of its Sunrise Wind project off the coast of New York.
Given the market conditions, Orsted’s board of directors decided to end the process of selling a stake in Sunrise Wind, which would have provided the “required strengthening” of its capital structure to support its investment and business development programs. Source: CNBC
Orsted had planned to sell part of its Sunrise Wind project off the coast of New York to free up capital. However, recent adverse developments in the US offshore wind sector have made completing the partial divestment on favourable terms impossible, the company said. This setback means Orsted will have to fully fund the construction of Sunrise Wind itself, creating an additional 40 billion kroner in financing needs. The project has already been hit by supply chain and construction delays that caused hundreds of millions of dollars in impairments.
Gary Abernathy reports on progress securing the U.S. grid from the load of entanglements from adding wind and solar power supplies. His Empowering America article is Climate Science is Not the Law in the U.S. Exerpts in italics with my bolds and added images.
While not everyone is on board with President Trump’s “America First” philosophy, its importance when it comes to energy is brought into sharp focus when considering where the U.S. would be if it capitulated to the whims of global organizations like the United Nations or obeyed the verdicts of world courts.
The frightening attitudes of believers in global rule were recently on display courtesy of a New York Times opinion piece headlined “Climate Science is Now the Law,” penned by three writers who are all part of something called the Center for International Environmental Law. In their article, the authors claim, “The science on climate change has long been settled. Now the law is, too.” [See post: ICJ Issues Biased Advice on Climate Change]
At about the same time that the International Court of Overstep was issuing its decree for nations to kneel at the feet of the wind and solar gods, the Trump administration took another giant leap in its race to reverse Biden’s disastrous energy policies. On July 7, the Energy Department unveiled its “Report on Evaluating U.S. Grid Reliability and Security,” as required under President Trump’s April executive order to examine the topic. DOE reported:
“This methodology equips DOE and its partners with a powerful tool to identify at-risk regions and guide federal interventions to prevent power outages, accelerate data center deployment, and ensure the grid keeps pace with explosive load growth driven by artificial intelligence and reindustrialization.”
Rather than follow international directives and judgments to rid itself of energy sources like natural gas, which is necessary to power technology, manufacturing and the coming AI data centers, the DOE is, fortunately, doing the exact opposite. Among the biggest DOE findings:
If current plant retirement schedules and incremental additions remain unchanged “most regions will face unacceptable reliability risks within five years.”
Radical change is necessary because otherwise, the magnitude of projected demand from AI data centers and other manufacturing “cannot be met with existing approaches to load addition and grid management.
The coal and gas plant retirements previously planned by 2030 “could lead to significant outages when weather conditions do not accommodate wind and solar generation.”
Even with plans to replace 104 gigawatts of plant retirements with 209 gigawatts of new generation by 2030, “only 22 (gigawatts) come from firm baseload generation sources,” meaning that “the model found outage risk in several regions rises more than 30-fold.” (A gigawatt is equal to 1 billion watts.)
In other words, replacing firm baseload sources like natural gas with alternative sources like wind or solar is not an apples-for-apples proposition, since “renewables” put the grid at greater risk. Establishing arbitrary end dates for our most affordable and reliable energy sources is both illogical and reckless.
On the heels of the international court’s irresponsible and (thankfully) unenforceable decree, and the DOE’s astute recommendation to do the opposite of what the court prescribed, came a story from Reuters declaring that the Trump administration’s actions to end or curtail Biden-era subsidies and credits for “renewables” are, fortunately, having an impact. Boom fades for US clean energy as Trump guts subsidies
“Singapore-based solar panel manufacturer Bila Solar is suspending plans to double capacity at its new factory in Indianapolis. Canadian rival Heliene’s plans for a solar cell facility in Minnesota are under review. Norwegian solar wafer maker NorSun is evaluating whether to move forward with a planned factory in Tulsa, Oklahoma. And two fully permitted offshore wind farms in the U.S. Northeast may never get built,” the news agency reported.
These are among the major clean energy investments now in question after Republicans agreed earlier this month to quickly end U.S. subsidies for solar and wind power as part of their budget megabill, and as the White House directed agencies to tighten the rules on who can claim the incentives that remain.
The key provision in the new law is the accelerated phase-out of 30% tax creditsfor wind and solar projects: it requires projects to begin construction within a year or enter service by the end of 2027 to qualify for the credits. Previously the credits were available through 2032.
The policy changes have also injected fresh doubt about the fate of the nation’s pipeline of offshore wind projects, which depend heavily on tax credits to bring down costs. According to Wood Mackenzie, projects that have yet to start construction or make final investment decisions are unlikely to proceed.
Two such projects, which are fully permitted, include a 300-megawatt project by developer US Windoff the coast of Maryland and Iberdrola’s 791 MW New England Wind off the coast of Massachusetts.
Neither company responded to requests for comment.
President Trump is putting America first and leading an energy renaissance that should be in full bloom on our nation’s 250th birthday on July 4, 2026. It’s difficult to imagine a greater Independence Day gift to the American people than freedom from the cold, dark landscape that would result from following the directives of global agencies and the rulings of international courts.
Postscript: Saving U.S. Farmland from Transmission Lines
Robert Bryce adds the canceling of transmission lines dedicated to wind and solar power in his blog article Transmission Unplugged.
From Missouri and Colorado to Germany and Spain, high-voltage transmission projects are being stopped by fierce local opposition, soaring costs, and permitting delays.
The Grain Belt Express project aimed to carry wind-generated electricity from Kansas to the Indiana-Illinois border. Map credit: grainbeltexpress.com
Invenergy neglected to mention that if the project gets built, it will saddle ratepayers with about $500 million in costs to integrate the power it will be delivering into grids on the eastern end of the line. In other words, Invenergy wants to build a merchant high-voltage transmission line and force its way onto the US electric grid. But it doesn’t want to pay any of the costs that its project will impose on the system. Furthermore, Grain Belt Express has faced fierce opposition in Missouri for more than a decade. Earlier this month, Missouri Attorney General Andrew Bailey announced a civil investigation into Invenergy for its “misleading claims and a track record of dishonesty” about the project.
Last week, the Department of Energy gave Polsky some high-amperage clarity from the Trump administration when it canceled a $4.9 billion loan guarantee for the Grain Belt Express that the agency’s Loan Programs Office made last November in the waning days of the Biden administration.
As we know, Orsted cancelled their massive Hornsea 4 offshore wind farm the other day. This has left Mad Miliband’s 2030 Clean Power policy in tatters.
By Paul Homewood
h/t Ian Cunningham/ Philip Bratby/ Ian Magness
As we know, Orsted cancelled their massive Hornsea 4 offshore wind farm the other day. This has left Mad Miliband’s 2030 Clean Power policy in tatters.
Hornsea 4 would have been the UK’s biggest wind farm, with its 2400 MW of capacity. Its withdrawal from last year’s Allocation Round 6 (AR6) leaves just the East Anglia Two scheme with 963 MW from that auction. There were no contracts awarded at all to offshore wind in AR5 the previous year.
Remember as well that Vattenfall cancelled their huge Boreas wind farm two years ago for the same reason as Orsted.
We have about 15 GW of offshore wind capacity operational, plus another 10 GW in the pipeline, which already have CfDs. This latter includes 1080 MW from Hornsea 3, which Orsted switched from AR4 to AR6, piggy-backing on Hornsea 4 in order to procure a higher price. I cannot see how this can still retain its CfD, given that the main project has been cancelled. (I have asked the LCCC to clarify).
Labour is targeting 50 GW by 2030, which is plainly unattainable, given the project timescales involved. Nevertheless, Miliband is determined to get as much offshore wind contracted as possible in AR7 and AR8, before Labour are booted out of power.
To do that, he is going to have to offer much higher strike prices. Remember that Orsted are taking a half billion hit for pulling out of Hornsea 4, so their strike price, currently £85/MWh, is plainly far too low to make any money.
Also bear in mind that no other projects other than East Anglia Two bid as low as Orsted. My guess is that the new prices will come in around £100/MWh. As the top bid is paid to all successful bidders, strike prices will inevitable rise higher.
This presents Miliband with another problem, because the current system has a budget pot of subsidy money for each Allocation Round. The higher the prices offered, the less capacity he gets.
Which is why he is now considering changing the system to a capacity budget, not a subsidy budget. the Telegraph report:
Ed Miliband is plotting a surge in the wind farm subsidies added to electricity bills to prop up his ailing green power target.
The Energy Secretary is preparing to ditch key limits on the cash diverted from bills to turbine developers, The Telegraph can reveal.
The manoeuvre, uncovered in official documents, is expected to allow Mr Miliband to bankroll thousands of extra turbines in the next few years.
To accelerate wind farm construction, Mr Miliband wants to scrap limits on the total subsidy on offer to offshore developers in Whitehall auctions.
Instead a target would be set for the amount of electricity to be generated, with the cost to households only worked out afterwards.
Such a move would destroy once and for all claims that renewable energy is cheaper than gas. As the Telegraph report, even DESNZ are now dropping the pretence that bills will come down, (at least not until some unidentified time in the distant future!)
A Whitehall insider agreed costs could rise initially, suggesting that the investment in renewables now would bring prices down in years to come.
“It means short-term pain in energy bills, for long-term gain,” he said.
But more importantly it would be political suicide for Labour, as it would be very easy to calculate how much extra their obsession with renewables will cost the public.
Miliband needs an extra 25 GW of offshore wind. An increase in price from £85 to £100/MWh for this would add £1.5 billion a year to bills.
But much more damning would be the cumulative cost over the 15 year contract period, a total of £22.5 billion.
Could Miliband survive the charge that he had handed a £22 billion bung to his renewable chums?
John Constable’s comment in the Telegraph says it all:
“With a small tweak to the green subsidy rules Ed Miliband can give himself the freedom to quietly and quickly add many billions of pounds a year to national electricity bills.
“If the Chancellor were to propose tax increases of this scale affecting every household and business in the country there would be a storm of criticism in Parliament and elsewhere.
Yesterday I discussed the likelihood of Orsted pulling out of Hornsea 4, as part of their retrenchment. And with Vattenfall already opposed to joining future CfD auctions, there is now an enormous gap between Miliband’s 2030 plans and reality.
Yesterday I discussed the likelihood of Orsted pulling out of Hornsea 4, as part of their retrenchment. And with Vattenfall already opposed to joining future CfD auctions, there is now an enormous gap between Miliband’s 2030 plans and reality.
As NESO’s Clean Power 2030 makes clear, we will need to increase offshore wind power from 14.7 GW to 50.6 GW by 2030:
Assuming Orsted do pull out of Hornsea 4, there is about 12 GW of new build offshore wind capacity due on stream, which already have CfDs. That takes us to about 27 GW.
East Anglia 2, which along with Hornsea 4, won contracts in last year’s AR6 CfD auction, is targeted to come on stream in 2028/29. It is therefore likely that if projects do not get CfDs this year will not be ready by 2030 anyway.
But more to the point, are we honestly going to find anyone prepared to build another 23 GW in the next five years?
“Trump’s executive order bomb, followed by Congressional action to limit funds from the IRA and IIJA, promise to gut, or profoundly reshape, the U.S. green energy movement. January 2025 may begin a long decline for green energy and a return to sensible energy policy.”
“Trump’s executive order bomb, followed by Congressional action to limit funds from the IRA and IIJA, promise to gut, or profoundly reshape, the U.S. green energy movement. January 2025 may begin a long decline for green energy and a return to sensible energy policy.”
President Trump has long been a supporter of traditional, consumer-driven energy. During his campaign, he spoke negatively about electric vehicles, wind, and other renewable energy sources. But in his first day in office, the new president began a historic shift in US energy policy, away from “green” energy and back to hydrocarbon energy.
On January 20, 2025, President Trump signed five wide-ranging executive orders that radically change United States energy and climate policy. These actions restore efforts to promote coal, natural gas, oil, hydropower, nuclear, and biofuels, while curtailing support for wind and electric vehicles. The Trump executive orders also rescinded orders issued by President Biden and closed federal departments established to promote climate change policies and green energy.
The executive order regarding “offshore wind” and “wind projects” immediately impacted the world wind industry. The US government owns all land from three miles to 200 miles offshore, so wind companies require a federal lease to build offshore systems. The order withdrew “all areas within the Offshore Continental Shelf” from wind leasing. The order also requires that the new Secretary of the Interior, Doug Burgum, “conduct a comprehensive review” to determine the necessity for “terminating or amending any existing wind energy leases” and to submit a report to the President. The order also put a hold on the Lava Ridge Wind Project in Idaho, pending a review by the Secretary of the Interior, a project which was approved by the Biden Administration in December.
Wind energy markets were shocked by Trump’s order. The stock price of Orsted, a Danish wind system supplier, dropped 17% to its lowest price in seven years. Orsted proposed to build Sunrise Wind, the largest planned US offshore wind system, to be located southeast of New York City. The company immediately took a $1.69 billion impairment charge on US wind projects.
Wind suppliers RWE of Germany, Equinor of Norway, Renovaveis of Portugal, and Vestas of Denmark also suffered stock price declines. Italy’s Prysmian announced that it would abandon a plan to build a plant in the US to make cables for offshore wind systems.
Wind energy plans for several states have been crippled. California planned to install 25 gigawatts of offshore wind energy by 2045, with initial projects at Morro Bay and Humbolt Bay, but these plans are on hold for at least the next four years. Maryland, Massachusetts, New Jersey, New York, North Carolina, South Carolina, Rhode Island, and Virginia are constructing or planning east coast offshore systems, but these programs will be reviewed, limited, or halted if not yet started.
The “Unleashing American Energy (UAE)” executive order calls for elimination of the “electric vehicle (EV) mandate” to promote consumer choice and access to gasoline-powered automobiles. It’s true that we have no formal EV mandate, but 22 states have zero-emissions vehicle laws or executive orders prohibiting sales of gasoline cars by a future date, typically 2035. On March 20 of last year, the Environmental Protection Agency (EPA) issued updated emissions standards that would force auto manufacturers to sell an increasing number of EVs, rising from about 8% last year to about 56% of new light vehicle purchases by 2032.
The Trump orders also call for termination of state emissions waivers “that function to limit sales of gasoline powered automobiles.” The 1970 Clean Air Act established the federal government as responsible for regulating pollution, except where a waiver is granted by the EPA to a state. For years, California has set emissions standards, receiving EPA waivers to do so, with other states following California’s lead. The orders seek to terminate these waivers to California and restore emissions control to the EPA. Earlier this month, California withdrew their request for a waiver for regulations to electrify heavy trucks and locomotives because it appeared that Trump’s EPA would not grant that request.
The order also calls for the “elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs.” This probably refers to coming efforts to eliminate the $7500 tax credit on new EV sales and also efforts to eliminate the Corporate Average Fuel Economy standards issued by the Department of Transportation, which force auto manufacturers to sell a larger share of EVs.
The US economy today includes several green energy industries which probably would not exist without the vast array of federal and state subsidies and tax credits. Wind, solar, EV charging, carbon dioxide (CO2) capture, and green hydrogen receive a limitless stream of subsidies and tax credits from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA), both of which were passed during the Biden Presidency. The CATO institute estimates that renewable energy will receive about $80 billion in federal funds during fiscal year 2025.
During his campaign, Mr. Trump vowed to eliminate the money flow from these two acts, and his first-day executive orders reflect this. The UAE order calls for “termination of the Green New Deal,” and a halt to the disbursement of funds from the IRA and IIJA. President Trump will probably need to pass Congressional legislation to permanently reduce the flow of IRA and IIJA funds.
Wind and solar systems are intermittent, use 100 times the land area, and require at least double the transmission infrastructure compared to traditional coal, gas, or nuclear power plants. Few utilities would build wind and solar systems if not for the fear of human-caused global warming. But the new executive orders make it clear that the US will no longer pursue efforts to “mitigate” climate change.
In the executive order titled “Putting America First in International Environmental Agreements,” the President directs the US Ambassador to the United Nations, nominee Elise Stefanik, to notify the UN in writing that the US withdraws from the Paris Climate Agreement, effective immediately. The order also states that the US will immediately cease financial payments under the Framework Convention on Climate Change.
The orders direct executive branch officials to cancel at least five Biden executive orders on climate change, and to disband the Climate Change Support Office, the American Climate Corps, and The Working Group on the Social Cost of Greenhouse Gases. The orders also call for the EPA to review the 2009 Endangerment Finding for “continuing applicability.” That finding concluded that carbon dioxide endangered US citizens and is the basis for regulating CO2 emissions in the US.
The Trump actions also seek to boost the development of hydrocarbon energy in the spirit of “drill, baby, drill.” Key actions include re-opening the licensing of liquified natural gas terminals, opening federal lands for onshore and offshore oil and gas production, reopening Alaska lands for energy production, and reducing efficiency regulations on dishwashers, stoves, and furnaces. The President also declared a national energy emergency to speed the deployment of pipelines and other energy infrastructure. The Trump EPA and Department of Energy will roll back regulations on oil and gas to expand US production.
Trump’s executive order bomb, followed by Congressional action to limit funds from the IRA and IIJA, promise to gut, or profoundly reshape, the U.S. green energy movement. January 2025 may begin a long decline for green energy and a return to sensible energy policy.
——————————-
Steve Goreham is a speaker on energy, the environment, and public policy and author of the bestselling bookGreen Breakdown: The Coming Renewable Energy Failure. His previous posts at MasterResource can be found here.
A Danish renewable energy group booked huge impairment losses Thursday after it pushed back the launch of one of its U.S. offshore wind projects, according to its first-half 2024 earnings report.
A Danish renewable energy group booked huge impairment losses Thursday after it pushed back the launch of one of its U.S. offshore wind projects, according to its first-half 2024 earnings report.
Orsted estimated the value of its assets declined $472 million in the first half of 2024, largely due to delays at the onshore substation for its 704 megawatt (MW) “Revolution Wind” project off the coast of Rhode Island and Connecticut, the report showed. The company also reported a variety of other problems, including losses related to its cancellation of its Ocean Wind projects in New Jersey and its abandoned effort to produce eco-friendly methanol in Sweden.
“Despite encouraging progress on our US offshore wind project Revolution Wind, the construction of the onshore substation for the project has been delayed,” Orsted’s CEO Mads Nipper said in reference to the delay. “This is, of course, unsatisfactory, and we continue our dedicated efforts to de-risk our portfolio.”
“Offshore wind turbines provide zero reliability, increase utility costs, and will devastate our coastal community.” https://t.co/pnOFP4NpHx— Save Jersey (@SaveJersey) August 15, 2024
The delay at Revolution Wind was driven by soil contamination at an onshore transformer station, and resulted in an asset markdown of $310 million, or roughly 65% of the total impairment amount.
Orsted’s stock fell as much as 9% following the earnings announcement, according to Reuters.
The U.S. offshore wind industry has had a wave of project delays, missed production targets and public backlash in the past year.
New York State scrapped three offshore wind projects in April after failing to finalize power purchase agreements with developers. The failed efforts contributed to Democratic New York Gov. Kathy Hochul issuing an official review in July admitting the state was going to miss its goal of 70% renewable electricity by 2030.
A July report from the American Clean Power Association found there will only be 14 gigawatts of offshore wind production capacity deployed by 2030, less than half the Biden administration’s target.
The Biden administration has provided billions of dollars in subsidies to the offshore wind industry, including to Orsted.
“We maintain a strong focus on de-risking project execution and prioritizing growth options with the highest potential for value creation,” Nipper said of Orsted’s first-half earnings results.
Orsted and the White House did not immediately respond to requests for comment.
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The tumult in US offshore wind development has taken several steps lately, some forward, some not so much. Here is a quick overview of three serious events that are worth careful consideration.
The tumult in US offshore wind development has taken several steps lately, some forward, some not so much. Here is a quick overview of three serious events that are worth careful consideration.
First is the question of whether the developers will be able to bring forward their cost crisis and stick it to the ratepayers. As regular readers know, a lot of offshore wind project contracts with the client States have been pulled by the developers. They hope to come back with a higher price to cover their suddenly increased costs. The big Danish developer Orsted just pulled another contract in Maryland.
Well, the first of these new high-cost offers has indeed been accepted, in this case, by New Jersey. After all, the governor says, they want to go the impossible 100% renewables route as quickly as they can, making costs politically irrelevant. New Jersey ratepayers be damned.
There is a good chance that the other North Atlantic states will follow New Jersey, especially New York, Massachusetts, and Rhode Island, which have huge offshore wind construction targets.
This suit alleges something that is obviously true, having been widely discussed here at CFACT. The Federal agencies that have quickly issued the offshore wind permits have simply ignored the destructive environmental effects. This is especially true for the collective impact of combinations of nearby projects.
Thus, the argument is procedural rather than substantive. Plaintiffs are not asking the Court to rule on the environmental science, which Courts are reluctant to do. They just want the Feds to do the proper job as mandated by the applicable environmental protection laws, of which there are several.
The complaint has two dimensions of consideration. One is the adverse impact of wind development on fish and, therefore, on the fishing industry. Thus, one of the complainants is a fishing trade association. One of my favorite legal maxims is “Never argue substance when you can argue procedure.”
The other dimension is the adverse impact on endangered species, especially whales. One of the plaintiffs is the Save the Right Whale Coalition. Here, the narrow issue is the threat posed by enormous offshore wind development to the severely endangered North Atlantic Right Whale.
The noise of this pile driving is extremely loud, disrupting the lives of whales and other endangered species. This disruption is not only recognized by the Feds, it is specifically authorized by NOAA. The disruption is called harassment, and every offshore project has a pile driving harassment authorization, which typically includes thousands of hapless marine mammals.
That this systematic harassment can cause deadly behavior on the part of the thousands of harassed critters is one of the top ongoing complaints against offshore wind development. For example, scaring whales into heavy ship traffic where they can be struck and killed.
Which brings us to our third big event. The Feds have just released the final version of their so-called “North Atlantic Right Whale and Offshore Wind Strategy”. I say so-called because there is no strategy.
The Federal plan is to drive the thousands of piles on a bunch of big projects, many at the same time, and see what happens to the whales. The word “harassment” does not even occur in the document. Deadly harassment is simply ignored.
If the Right Whales go extinct, there is no way to bring them back, so watching and waiting is not a protection strategy. This is the kind of systematic denial that the lawsuit calls out.
So there it is. The price of offshore wind may be going way up, but a lawsuit is asking for a more complete look at the adverse impacts. Meanwhile, the impact of offshore wind on severely endangered whales continues to be ignored by the development agencies.
The times they are a changing. Stay tuned to CFACT.
The renewable energy industry is in full collapse mode this week. First, Orsted A/S, the world’s largest offshore wind farm developer, abandoned two major US projects due to supply chain and interest rate impacts, and now solar stocks are being clubbed like a baby seal in US premarket trading on Thursday after solar equipment-makers SolarEdge and Sunrun reported dismal guidance amid waning demand.
Keep cranking up power prices and watch your economy slowly disappear. Subsidised wind and solar guarantee the former and the latter simply follows.
Every country that has tapped into the so-called wind and solar transition is suffering from power prices that are simply out of this world. Australia is a case in point.
Having just been whacked with 20-30% increases in their power bills – on top of increases of between 10-20% in retail power prices that took effect throughout the financial year – many Australian households and businesses will see a 50% jump in their power bills in less than 12 months.
And yet, Labor party apparatchiks reckon that the solution to the unfolding disaster is simply more of the same; much, much more. As Nick Cater explains below.
Labor’s renewable ‘investments’ are just blowing in the wind The Australian Nick Cater 6 November 2023
The floundering offshore wind turbine industry received some welcome news from Australia last week with a strong hint from Jim Chalmers of more sugar on the table for renewable energy.
The promise of what the Treasurer euphemistically called “more decisive action across all levels of government” is a sign of increasing desperation as the government’s emissions-reduction timetable falls hopelessly behind.
The giant boring machine crawling beneath the Snowy Mountains is an apt metaphor for the government’s progress towards its 2030 target. Both projects were based on heroic assumptions, neither were adequately surveyed, and both have turned into giant sinkholes for capital that could be better spent elsewhere.
It will be little comfort to know that ours is not the only government to discover that the carbon challenge cannot be overcome simply by setting targets.
Joe Biden’s dream of deploying 30 gigawatts of offshore wind turbines by 2030 is in tatters after a string of cancelled projects. Last week, Danish wind energy company Orsted dropped two projects that would have installed more than 200 giant turbines off the New Jersey coast. Orsted’s stock has fallen 60 per cent this year and The New York Times estimates it will have to write off billions of dollars in investments in the two projects. Orsted is not the only company encountering headwinds.
Britain’s target of 50GW of offshore wind by 2030 can only be met with substantial subsidies and revenue guarantees. The Swedish company Vattenfall abandoned a giant offshore wind project off the Norfolk coast earlier this year, blaming a 40 per cent rise in costs. The latest auction for offshore wind licences failed to attract a single bid.
Anja-Isabel Dotzenrath, BP’s head of low-carbon energy, told a Financial Times conference on Wednesday that the US offshore wind industry was “fundamentally broken” and required a “fundamental reset” to help the nascent market grow. Mounting problems included approval delays, long timelines and escalating interest rates that have caused financing costs to soar.“There’s really not a Plan B right now,” environmentalist Jeff Tittel told the New York Times. “It’s a political disaster.”
Enter Energy Minister Chris Bowen who told the Asia Pacific Offshore Wind and Green Hydrogen Summit in August that Australia had big ambitions for offshore wind. “We aren’t just building an industry from scratch,” he said. “We are building an industry in which we want to be a world leader.”
Bowen has announced five offshore wind zones in the past year, with a sixth between Bunbury and Perth expected to be formally announced this month.
The numbers, sprinkled like fairy dust in the minister’s press releases, are too silly to believe. The Hunter, Illawarra and Southern Ocean zones alone will provide enough electricity to power 16 million homes, according to the minister. In a country of 9.7 million households, that would be impressive if it were true, rather than a scribble on the back of an envelope.
We are told that the energy capacity of the five offshore wind zones in the eastern states will be 43GW. That means constructing 5400 turbines with a boilerplate capacity of 8MW, or one a day for the next 15 years. On a conservative installation cost assumption of $US1.3m a megawatt, that would require a capital investment of $86bn.
“We need you,” Bowen told the industry gathering. “We need your capital. We need your investment. We need your experience.
“The Australian government is deadly serious about our journey to become a renewable energy superpower.”
Reducing emissions is not as easy as Labor seemed to assume when it announced its 82 per cent renewable-energy target two years ago. The construction of onshore wind, grid-scale solar and transmission lines has fallen way behind the government’s timetable. Offshore wind, with its long lead time and significant capital costs, is an even larger challenge.
Yet building the extra generation capacity to meet the government’s 2030 target is only the beginning. The additional power that would be needed to manufacture green hydrogen on an industrial scale has barely been discussed. Yet the amount is considerable.
Plans for the proposed renewable energy hub in Gladstone, Queensland, for example, include a facility to export 4MT of green hydrogen a year. That would require 110GW of renewable energy capacity, according to a presentation by Gladstone Ports Corporation chief executive Craig Haymes at a recent engineering conference. It means an extra 10,000 wind turbines or 2500sq km of solar panels, an area the size of Fraser and Mornington Island combined.
Some attendees thought Haymes may have been trying to can the project by putting the figures on the table. Yet in a statement, the Corporation said Haymes had merely wanted to illustrate “the potential for renewable energy for Queensland and the opportunities this presents”.
Green hydrogen is at a nascent stage. It is an inefficient and hazardous way of storing electricity, and there is no serious industrial demand. It comes with huge capital constraints.
Yet governments in the US, Europe and Australia are investing billions of dollars of seed capital into hydrogen produced by renewable energy without a care in the world as to where the energy will come from.
In a speech to The Australian’s Economic and Social Outlook Conference last week, Chalmers flagged a “uniquely Australian” revamp of energy policy to prise an extra $225bn in capital from the hot little hands of private investors. He promised measures in the 2024-25 budget “to get private capital flowing towards our priorities effectively and efficiently”.
The hubris in this statement bodes poorly for our future prosperity. Diverting the flow of such huge sums of private capital to government pet projects, however noble the intentions, is the road to economic ruin. The investors withdrawing from renewable energy projects are responding to price signals. Private investors have a keen nose for snake oil. They are trading off costs and benefits and assessing the technical feasibility of projects with rigour this government has failed to match.
“Australia is, to be honest, a bit like the kid who forgot to study for an exam early in the process and is pulling all-night study sessions,” Bowen told the August conference. “But now we are working 24/7 to catch up.”
The tragedy is that Australia was gifted the chance to learn from the mistakes of others. Bowen’s obstinacy comes at a price. The Australian
A prominent energy project in the UK is reportedly considering the option of engaging in private agreements to secure its future. This potential shift towards private power agreements is driven by mounting concerns regarding the project’s escalating financial costs.
Ørsted has confirmed it may give up some government support that would apply to Hornsea 3, off the coast of Yorkshire, amid concerns that the subsidies it has been awarded are too low.
Instead, a spokesman said the company may seek to sell 25pc of the scheme’s power on a so-called merchant basis – where it receives no state support but can potentially reap bigger returns.
This would amount to selling about 700 megawatts of the wind farm’s planned 2.8 gigawatt (GW) output, a total which is enough to power three million homes.
The move comes as Ørsted’s bosses scramble to boost the viability of the scheme ahead of a final investment decision, expected by the end of this year.
On Friday, bosses at Ørsted told financial analysts they were examining an option to pass over 25pc of the CfD contract so the company would instead be free to sell power from the scheme for a higher market rate.
This could potentially boost returns from the scheme – assuming the company can secure better prices for the power privately than what it is guaranteed under Hornsea 3’s CfD.
Ørsted, the world’s biggest offshore wind developer, has insisted it intends to press ahead with Hornsea 3 in “all scenarios” but has yet to take a final decision.
The project is scheduled to begin generating in 2026 and has been awarded a subsidy deal worth about £45 per megawatt hour in today’s prices – less than what was offered in the most recent subsidy auction.
The pool of potential buyers for the 700 megawatts of power on offer is likely to be confined to heavyweight companies with big electricity demands.
Kathryn Porter, an independent energy consultant and founder of Watt Logic, said Ørsted faced a difficult choice between “locking in at a really low level of return or taking bigger risks and being able to make more money”.
She added: “They may take a view that they can get the project over the line because electricity prices will be high enough that they can make a decent enough return.
“Experience to date, however, shows that UK power market investors do not have much appetite for risk.”
A key risk is whether the Government would extend the Electricity Generator Levy – which affects receipts from power sold at more than £75 per megawatt hour – beyond March 2028.
Ørsted was threatened with a credit downgrade by ratings agency S&P last week after taking huge writedowns on the value of its offshore wind projects in the US.
The terms of the CfD are quite clear – it is all or nothing. Orsted are under no legal obligation to trigger their contract, in other words take up their option to sell. However, if they do, they must sell all of the electricity they supply to the Grid under CfD terms. The only way to avoid this would be to transmit power direct to an end user, bypassing the Grid.
And, I suspect, the government will be loathe to amend the contract to allow what Orsted want.
With market prices as they are at the moment, there is no logical reason why Orsted should not sell all Hornsea’s power via PPA’s. But as Kathryn Porter points out, investors in offshore wind farms like certainty, not risk. And the Electricity Generator Levy, if extended past 2028, would take away a large chunk of any excess profits.
Work on installing the turbines is not expected to start till 2026. Despite Orsted’s protestations, there is an increasing likelihood that they will pull the plug on Hornsea.
But whether they do, or sell via PPAs, private consumers will not benefit from the low prices already contracted.
Dogger Bank
Meanwhile SSE’s Dogger Bank offshore wind farm, which began generating last month, has still not appeared to have triggered its CfD, currently priced at £49.77/MWh.
I’m waiting confirmation from the Low Carbon Contracts Company, but it seems that they too will sell at much higher market rates.
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