Costs keep mounting for U.S. offshore wind
Rising costs keep weighing down America's nascent offshore wind industry.
Why it matters: A host of issues, from supply chain constraints to broken turbines, have developers threatening to pull the plug on projects unless they get more money.
Driving the news: Danish developer Ørsted told New Jersey regulators this month that it needs more money for its Ocean Wind 1 project off the South Jersey coast.
- It's seeking a $1.50 increase to the average resident's electric bill — a move that's inflamed local opposition.
- Co-owner PSEG has washed its hands of the project. The electric utility unloaded its 25% stake to Ørsted in January.
Meanwhile, developer Avangrid this winter took steps to scrap and re-bid contracts for its 2+ GW Commonwealth Wind project serving Massachusetts.
What they're saying: "The process takes so long that a lot of things can happen in the middle and there should be some adjustments,” Avangrid CEO Pedro Azagra Blázquez told analysts in February.
Plus: The Trump administration's reticence to greenlight offshore wind projects means some power contracts were negotiated years ago.
The big picture: No one's saying this will halt offshore wind investment. The U.S. last summer had more than 40 GW in development.
Yes, but: With policymakers focused on energy security — and offshore wind opponents getting more organized — repeated delays and price hikes aren't ideal.
Our thought bubble: Ørsted and Avangrid are savvy developers. Ørsted is among the world's largest offshore wind developers and built the first offshore wind farm in the U.S. If they're having trouble, so too will the rest of the sector.