Nov 2, 2023 - Energy & Environment

Where it stands: offshore wind's rocky shoals

Illustration of a wind turbine with a thumbs up on one side and a thumbs down on the other

Illustration: Sarah Grillo/Axios

Ørsted's decision to scrap New Jersey offshore wind projects has major implications for renewable tech's U.S. future.

State of play: The global wind giant took a roughly $4 billion impairment when announcing earnings, mostly from those projects. The stock swooned 26% on Wednesday.

The big picture: Ørsted's woes come as several other developers' U.S. projects are facing delays and potential cancellations amid higher interest rates, inflation and supply chain problems.

  • It also imperils the White House goal of 30 gigawatts of offshore capacity installed by 2030.

Threat level: ClearView Energy Partners estimated 30% of planned offshore wind capacity contracted through state procurements has been canceled to date.

  • That could grow after New York regulators recently denied petitions to alter contracts, but the research firm notes some of these projects are likely to re-bid in future rounds.

The intrigue: Nonetheless, ClearView sees long-term growth and floated the idea that current project crises have a "silver lining."

  • Their demise may prompt Biden officials to ensure developers can tap the full suite of credits available under the climate law.

What they're saying: The White House is also emphasizing industry progress despite today's tough project economics, citing steps like federal approval this week of Dominion Energy's big offshore Virginia plan.

  • "While macroeconomic headwinds are creating challenges for some projects, momentum remains on the side of an expanding U.S. offshore wind industry," Biden spokesman Michael Kikukawa said via email.
  • He added this means "good-paying union jobs" and other U.S. benefits.
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