Cost of Fixing Faulty Undersea Cables Makes Offshore Wind Even More (Insanely) Expensive

Who would have thought that trying to operate sophisticated machinery in hostile marine environments would require constant, costly repairs and maintenance?

Apparently, the wind industry missed that memo, and only now are starting to calculate the true, and truly staggering, cost of operating wind turbines miles offshore.

Then there’s the cost of connecting them; criss-crossing the ocean floor with a web of high-voltage DC cables to bring the power they occasionally generate, back to shore and market. Albeit a market that only exists thanks to massive subsidies and punitive, mandated targets.

With those costs fast catching up, dozens of proposed mega-offshore projects have been shelved.

Adding to their woes, when their undersea cables fail, as they inevitably do, repairs take several months, which prevents the operators from dispatching power, at all, while those repairs take place. Little wonder that the offshore wind industry is in absolute freefall.

Here are some updates from Francis Menton and the team from Jo Nova.

Update On Offshore Wind Projects Off The Mid-Atlantic And New England
Manhattan Contrarian
Francis Menton
5 October 2023

Offshore wind turbines — those are the magical solution to all our energy problems. The wind is clean and free. And way out in the ocean — where you can barely even see the towers — the wind blows steadily almost all the time. Just put up a few turbines to catch the breezes, and those evil fossil fuels will quickly be banished.

Anyway, that has been the talk for at least three decades. After 30 years of talk, the number of actual functioning wind turbines out in the Atlantic Ocean off the U.S. coast is now exactly seven: five off Block Island (part of Rhode Island), and two off Virginia. Those provide some tiny fraction of 1% of the electricity for the mid-Atlantic states and New England.

But the Biden Administration has much grander plans. According to this May 2021 piece from the Institute for Energy Research, Biden’s “net zero” plans include the construction of “some 30,000 megawatts of new offshore wind capacity by 2030, the equivalent of 1,000 Block Island projects.”

30,000 megawatts. Wow, that’s a lot. Or is it? According to the American Public Power Association, as of February 2023 the U.S. had some 1.3 million megawatts of electricity generation capacity. So the 30,000 MW of new offshore wind would be an increment of something between 2 and 3% to existing nameplate capacity. And since wind turbines only function about 30-40% of the time (optimistically) when averaged over the year, the 30,000 new MW of capacity of offshore wind would really be equivalent to at most 9-12,000 MW of dispatchable generation, so will at best add about 1% to existing capacity, and even that at random times that would require backup to assure reliability.

But is the 30,000 MW of new offshore wind capacity even real? Yes, big subsidy numbers got put into the fraudulently-named “Inflation Reduction Act” of 2022 for the purpose of getting the offshore wind projects built. Lots of offshore wind projects in the mid-Atlantic and New England areas then got put up for bid, and contracts for construction of the turbines were issued. Can we get an update on that? Is anything actually getting built?

For New York, it appears that both in the run-up to, and immediately after enactment of the IRA, the state put a collection of projects up for bid. The agency running this show has the lengthy acronym of NYSERDA (New York State Energy Research and Development Authority). At their website, NYSERDA reports on the status of their efforts. The plan is for some 9,000 MW of offshore wind for New York alone, of which some “4,300 megawatts are under active development.” Here is an excerpt from NYSERDA’s excited narrative on the status on how it’s going:

In July 2022, New York State launched its third competitive solicitation, ORECRFP22-1, to procure at least 2,000 additional megawatts of offshore wind energy for New Yorkers. This solicitation comes on the heels of a record-setting auction by the Bureau of Ocean Energy Management (BOEM) for leases in the New York Bight in February 2022. . . . In the State’s second offshore wind procurement, NYSERDA selected two projects for contract negotiation: Empire Wind 2 and Beacon Wind of Equinor Wind US LLC. Together, these projects total nearly 2,500 megawatts, enough to power 1.3 million homes. . . . New York now has five offshore wind projects in active development – the largest offshore wind pipeline in the nation totaling more than 4,300 megawatts. . . .

Here from NYSERDA is a map of where all of these projects will supposedly be built:

The information on that web page was current as of about last March. But since then things have gone rapidly south. ReNews.biz has an update dated September 1:

The developers of four offshore wind farms in New York are seeking average price rises of almost 50% on their offtake agreements. . . . The projects involved are Orsted and Eversource’s 924MW Sunrise Wind project, along with Equinor and bp’s 816MW Empire Wind 1, 1260MW Empire Wind 2 and 1230MW Beacon Wind. Sunrise Wind previously agreed a price of $110.37 per MWh, and is now seeking a $139.99 price instead, a 27% increase, according to NYSERDA. Empire Wind 1 requested increasing its strike price from $118.38 to $159.64, a 35% increase, while Empire Wind 2 asked for its $107.50 original price to be increased to $177.84, a 66% increase. Meanwhile, Beacon Wind wants its $118.00 previously agreed price ramped up to $190.82, 62% more. The three Equinor and bp projects combined have an average price rise of 55%.

Add up the capacity figures there, and it looks like of the 4,300 MW that NYSERDA was bragging about, the developers of at least 3,300 MW are about to back out without massive price increases. By the way, natural gas plants can typically sell electricity to the grid at around $50/MWh, or $0.05/kWh. The prices being talked about here for the offshore wind are in the range of triple to quadruple, and that’s before getting to the costs of extra transmission, let alone energy storage to back up the intermittency.

And up the coast in New England, the exact same thing is happening even as we speak. Robert Bryce has an update on his Substack post from yesterday, October 4. The headline is “Wind Blows.” Here is the lede:

The only thing dumber than onshore wind energy is offshore wind energy. The good news for ratepayers, taxpayers, birds, bats, landscapes, viewsheds, and the critically endangered North Atlantic Right Whale, is that both sectors are getting hammered by market forces that make their projects uneconomic.

And then there is a litany of essentially all the developers paying massive cancellation fees to walk away from what seems like every existing contract for offshore wind development in New England:

On Monday, Avangrid, a subsidiary of the Spanish utility Iberdrola, announced that it was abandoning the 804-megawatt Park City Wind project offshore Connecticut. . . . In August, Shell and Ocean Winds North America agreed to pay $60 million to cancel contracts to sell power to Massachusetts from the proposed 2,400-megawatt SouthCoast Wind project. In July, Avangrid agreed to pay $48 million to cancel its contract with Massachusetts to sell power from the proposed 1,200-megawatt Commonwealth Wind project. Also in July, Rhode Island Energy announced it was canceling a power purchase agreement with Ørsted and Eversource on the 884-megawatt Revolution Wind project. . . .

Will any of these wildly uneconomic offshore wind projects actually ever get built? Let’s hope not.
Manhattan Contrarian

Failing underwater cables “pose global threat to offshore wind”
Jo Nova Blog
Jo Nova
6 October 2023

Who knew high voltage cables running for kilometers in a deep electrolytic moving body of water would be expensive?

Despite offshore windfarms dealing in a kind of mechanical hell of high speed salt water spray, big waves and volatile wind conditions, surprisingly 85% of the insurance claims are because the underwater cables are failing.* If the subsea cables can’t be insured, it’s another unexpected cost threatening the economics of offshore wind.

The underwater cables needed for offshore wind are apparently so costly to repair, and the losses from lack of generation so steep, they are in danger of becoming uninsurable.

Subsea cable failures pose global threat to offshore wind 
Energy News Live

The race to harness offshore wind energy has hit a significant roadblock, with the reliability of subsea cables emerging as a critical concern.

Global Underwater Hub (GUH) has raised alarm bells about the escalating issue of subsea cable failures.

These setbacks not only disrupt power transmission but also incur hefty costs.

Imagine if an entire coal plant was connected to the grid through one long cable buried under the ocean and when the cable failed it took months to find and repair — during which time the plant could not earn a cent…

Subsea cable failure could derail global offshore wind projects
World Oil

GUH chief executive, Neil Gordon, said, “It’s estimated that around 85% of the total value of offshore wind insurance claims relate to subsea cables. Insurers are losing money underwriting cables with the average settlement claim in the region of £9 million. Brokers have warned that the high number of cable claims is affecting capacity and coverage and the cost of repairs typically runs into millions, with warranties rarely covering the high cost of business interruption.

“If these critical components become uninsurable, offshore wind projects around the world will be derailed, making global 2050 net zero targets completely unachievable.”

According to one developer, the cost of insuring a 1.2GW offshore wind farm over its lifetime is in the region of £350 million and insurance brokers estimate that the costs of floating offshore wind will be 30% higher than fixed bottom ones.

Global Power Marine fixes export cables and quotes one happy customer talking about needing “only” 32 days instead of 67 days to repair the cable. But all the while, part or all of the wind plant isn’t earning any income, and so much of any repair depends on getting good weather so a ship can hover and work uninterrupted while the cable is “dangling” and exposed.

Gulski et al estimate the duration of failure can be 1 to 3 or even up to 9 months:

“Last 20 years of experience shows that the power cables are the largest contributor to the failures of power supply from the offshore plants. “

For those who want the details on the challenges of engineering Gulski et al detail some of the problems with subsea cables like the need for armour that isn’t magnetic, sections that are 30-50 kilometers long to avoid “joints” underwater, and why most cables on the sea floor are called “wet structures” which allow water in (at least to the outer layers).

Wind energy might be free, but collecting it costs the Earth.

Late Update — Australia desperately needs to learn these lessons. Prompted by comments from David Maddison and Ross below:

There are no offshore wind plants in Australia but we are rushing to build them, so the tales of woe from the UK and US are especially relevant here now.

The Basslink Cable from Tasmania to mainland Australian has broken not once, but three times here in the last seven years. First in 2016 for 5 or 6 months (I believe Australia didn’t even have the right repair ship, we used the Ile De Re which was based in Jakarta). Then the cable was out again in 2018 for two months. And in 2019 for another month due to a problem on land at the Victorian end.

The Basslink repair in 2016 were delayed for weeks because of bad weather.

After three weeks of delay, the ship was finally able to leave Geelong last night and the repair team hopes calm conditions will last long enough to connect a new section of cable to the existing one. The repair team needs 16 calm days to work on the cable before it can be up and running again.

How could our BOM even predict 16 calm days on the Bass Strait…?

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*Admittedly, this percentage may be high because insurance companies don’t cover most of the other kinds of failures on wind “farms”, as we see with Siemens massive stock loss as they realized the true cost of maintenance.
Jo Nova Blog