America’s Wind Industry Implodes: More Offshore Projects Scrapped

In the US the offshore wind industry is completely underwater, in every sense. The insane cost of attempting to (occasionally) generate electricity with no commercial value in hostile marine environments has finally caught up. Projects are being scrapped in the same way that punters rip up their betting slips when their long-shot nag fails to place.

Hubris is never far away when it comes to crony capitalists and rent-seekers promoting projects that were always too good to be true. That hubris worked a treat while gullible governments were merrily forking out endless streams of taxpayer’s money to prop up one of the greatest Ponzi schemes, of all time.

However, in recent times the politics of power have turned toxic. Power consumers are increasingly hostile to their ever-escalating power bills. With one eye firmly on the ballot box, politicos have rejected calls for even more massive subsidies from wind power outfits in the form of fixed-priced contracts at ludicrous prices – that would ultimately be added to those already crippling power bills.

All of that means wind power outfits are being squeezed on both sides – with rising construction and operating costs and shrinking subsidies (in real terms, at least).

Call it the beginning of the end, but things look less than rosy for the cats who have been wallowing in oodles of other people’s money for almost 20 years – as these pieces from the New York Post explain.

Collapse of projects shows again that wind power is not affordable
New York Post
James Hanley
2 November 2023

The renewable-power fantasy is being blown apart by furious financial headwinds.

Already this year projects have tumbled in Rhode Island, Connecticut and Massachusetts, and now Danish wind-power giant Ørsted has canceled two wind farms in New Jersey.

Over and over, the litany of causes is the same: inflation, higher interest rates that drive up capital costs and severe kinks in the supply chain.

These same problems are slamming proposed offshore-wind projects in New York as developers make final decisions on whether to start building turbines or cut their losses before they get worse.

Seeing that the wild cost increases threaten to make their projects unprofitable, these companies went hat-in-hand to the state’s Public Service Commission asking for increases of 35% to 65% on the price of electricity they hope to generate.

But the commission declined to dig deeper into ratepayers’ wallets, sending them away empty-handed.

The four companies behind these prospective wind farms have all taken big hits to their balance sheets. Equinor has written its value down by $300 million.

All this chaos caused a top BP executive to lament that the offshore-wind industry is “fundamentally broken.”

Indeed — and yet this broken industry is what New York’s climate activists have pinned their clean-energy hopes on.

If offshore wind had to compete on the free market, we wouldn’t even be talking about it.

The levelized cost of energy from natural gas is around $37 per megawatt hour.

The contracts the wind-energy companies struck with the state sets offshore wind’s price at $118 per megawatt-hour, three times as expensive as gas but still not enough to make turbines turn a profit.

To get out of the red, the firms had begged the PSC to jack up the price to between $140 and $190 per megawatt-hour.

These wind farms will almost certainly be built someday, even if the current contract-holders back out and the state has to rebid them.

And if it does, every bidding company will demand higher prices, socking ratepayers across the state with higher bills to subsidize them.

This is the danger of letting the government pick winners and losers. Watch the show “Shark Tank,” and you’ll see real investors having to decide whether to risk their own bankroll.

When experienced people are playing with their own money, they don’t care whether an idea sounds exciting or ticks the proper ideological boxes. They only care whether they’re likely to make money off it.

But when government provides subsidies to businesses, the investment decisions are made by folks who get to play with other people’s money.

Not having anything of their own at stake dulls their judgment, making them care more about the ideological appeal of a proposal than whether the money picked from the public’s pocket will provide a real return on their (unwilling) investment.

And while an investor will walk away from a project that’s going down the tubes, government agencies will keep throwing good money after bad — there’s no cost to them, and it hurts to publicly admit you’re wrong.

New Yorkers are capable of choosing the future they want. They don’t have to have it forced on them.

It’s time to shove the cost-immune policymakers to the side and let the market work. Let firms innovate to find affordable sources of clean energy, and climate conscious New Yorkers will beat a path to their door. [Note to James: it’s called nuclear power and New Yorkers have enjoyed it for more than 50 years.]
New York Post

The wheels are coming off New York’s insane alternate-energy plans
New York Post
Editorial
15 October 2023

New York state’s insane renewable-energy plan is starting to implode, and the sooner Gov. Kathy Hochul and other leaders admit the truth, the better.

On Thursday, the state Public Service Commission nixed a request for vastly greater subsidies — about $12 billion worth — for 90 alternate-power projects that are supposed to provide a quarter of the state’s electricity.

That would have doubled public support, most likely meaning huge increases for ratepayers in a state where power already costs far above the national average and rates are even now rising to help pay for this “transformation.”

The companies involved say they’re facing far higher costs, thanks to inflation, supply-chain issues and other developments since they inked the original deals.

Many, likely most, will now look to exit.

Hochul, meanwhile, released a new “10-Point Action Plan” that rhetorically doubles down on the state’s commitment its goals but doesn’t hold a hint of how to pay for it.

The state’s 2019 Climate Leadership and Community Protection Act requires cutting fossil-fuel emissions 40% by 2030 and 85% by 2050.

Solar and (mostly offshore) wind plants are supposed to replace that electricity.

Oh, and cover the natural growth in demand for power.

Plus, New York wants everyone switching to electric cars, electric heat and electric cooking, so these green dreams require even more growth in electricity generation.

Again, the PSC’s (wise) ruling means the wheels are coming off the entire alternative-energy scheme.

Nor is that the only blow.

For example, part of the supply-chain issue is the utter lack of ships that can actually build the vast fields of offshore wind towers that New York’s leaders want.

The only vessels with that capability are foreign-flagged, and so prohibited under the federal Jones Act, a sacred cow for the American labor movement.

Then, too, plans for a battery factory in the Hudson Valley are on the brink of collapse after its CEO resigned, its stock cratered and its workers got laid off.

Vancouver-based Zinc8 Energy Solutions had won $68 million in state tax credits for a Kingston plant to manufacture long-duration energy storage systems.

Its implosion means the imagined renewables-heavy electric grid would lack crucial help in maintaining service when the sun isn’t shining or wind isn’t blowing.

Meanwhile, the folks in charge of overseeing the state electric grid have warned that this “transition” risks leaving New York City facing blackouts as soon as 2025.

By the way, statewide conversion to electric heat would mean peak power demand will come in the coldest months, not the hottest: So the blackouts won’t leave people sweating uncomfortably but instead freezing in the dead of winter.

The entire US and Western drive to end carbon emissions is a ruinous wild-goose chase.

New York’s rush to lead the way, begun simply to boost then-Gov. Andrew Cuomo’s presidential hopes, only guarantees that Empire Staters will suffer the worst ruin before reality comes crashing down.
New York Post