The Challenges Facing Offshore Wind: Supply Chain Issues, Ship Availability and Interest Rate Concerns

A few years back, interest in offshore wind energy was so high that developers suggested spending billions to plant hundreds of turbines the size of skyscrapers in the Atlantic Ocean from Maine to Virginia. However, some projects recently hit setbacks due to the impact of the pandemic and rising interest rates on supply chains. As a result, the offshore wind industry found manufacturing, transportation, and erection of turbines more challenging than expected. Instead of the hundreds of turbines proposed, only a few dozen have been installed in U.S. waters.

The cost of offshore wind energy will be higher than anticipated, and its climate and economic benefits may be delayed. Some wind farms may be delayed or never built. As a result, Eastern states have awarded contracts to build roughly two dozen offshore wind farms, but many developers have canceled or asked to renegotiate rates for almost half of that capacity. Analysts are now predicting about 15 gigawatts of offshore wind will be installed by 2030, which is lower than expectations.

Orsted, a Danish company that has built around two dozen offshore wind farms, has canceled some planned giant offshore wind arrays in the U.S. due to anticipated large write-offs. Similarly, BP recently wrote off a significant amount of its investment in the U.S. offshore wind market. States like New York and Massachusetts are acknowledging that they will need to pay higher prices for the electricity generated by offshore turbines than they had anticipated.

Despite these setbacks, President Biden’s administration plans to complete federal reviews for at least 16 offshore wind farms by 2025. Some executives in the offshore wind industry are hopeful that the investments currently being made will pay off in the coming years. However, the industry is currently facing a significant challenge due to the lack of a robust domestic supply chain for offshore wind projects.

News

The Media Industry’s ongoing struggle to stay relevant in a digital age

The career of Roger Fidler exemplifies a warning: Sometimes, you can predict the future but still fall victim to it. Three decades ago, Mr. Fidler was a media executive promoting a vision of the future for newspapers. The rise of digital technology would allow for news to be accessed on portable devices all day long, […]

Read More
News

The Continuous Decline of the Media Industry: A Losing Battle against the Future

Roger Fidler has had a front-row seat to the digital revolution in the newspaper industry. Thirty years ago, he was advocating for the future of newspapers as portable digital devices that would offer multimedia content to readers. While his vision has largely come to fruition with people constantly online and engaged with news, traditional media […]

Read More
News

Biden Takes Action to Limit Sale of Personal Data to China and Russia

President Biden will issue an executive order to restrict the sale of American data to China, Russia, and four other countries in an effort to protect sensitive information from being used for malicious purposes. The order aims to prevent personally identifying data, such as locations, health records, and genetics, from being obtained by these countries […]

Read More