Growing turmoil in the offshore wind industry

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Posted by Ed Gooding (VA) on August 07, 2023 at 11:30:06 [URL] [DELETE] :

While two projects in New England’s waters are under active construction, and the Biden Administration’s Bureau of Ocean Energy Management is cranking out cookie-cutter approvals up and down the coast, major signs of financial stress are showing in many places. Some projects have been canceled, some are being renegotiated for higher prices, and the proposal near North Carolina’s Kitty Hawk still lacks a buyer for its power.

Here is how Barron’s summarized the situation recently:

At least eight multinational companies in three states have quietly started to back out of wind contracts or ask to renegotiate deals in ways that will pass more costs to consumers. Beyond Shell (ticker: SHEL), they include BP (BP), Denmark’s Orsted (DNNGY), Norway’s Equinor (EQNR), Spain’s Iberdrola (IBDRY), Portugal’s Energias de Portugal (EDPFY), and France’s Engie (ENGIY) and state-owned Electricite de France.

The projects those companies are building will collectively cost tens of billions of dollars to construct and connect to the grid. The cost problems they’re facing make offshore wind a dicey investment proposition today, with the potential for substantial write-downs ahead.

The issues go beyond rising construction costs. Siemens Energy saw its stock plummet in late June after reporting maintenance issues with its products. And there is growing recognition that the long-term threat in a salt-water setting has always been corrosion. It is cited as the leading cause of maintenance failures.

hmmmmmmmmmmmmmm........does anyone else think that putting so much priority, money, and time into wind/solar is not the answer to supplying dependable energy?

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