America's Bet on Wind Power Is Running Into a Big Problem
Story by Avi Salzman • Yesterday 1:15 AM
Crane ships and construction barges have joined the pleasure boats floating off the coast of vacation hot spots Montauk and Martha’s Vineyard this summer. The hard hats working on them aren’t there to catch some rays. They’re driving steel cylinders deep into the seabed to build America’s first large-scale offshore wind farms, a milestone decades in the making. Both projects are set to start sending electricity to the shore by the end of the year.
Public officials in New York and Massachusetts toasted the news last month when the first turbine foundations were installed. “The windmills that will power hundreds of thousands of homes are beginning to emerge from the water,” said Massachusetts House Speaker Ronald Mariano. Offshore wind is a crucial technology to decarbonize large coastal population centers, including cities like Boston and New York that probably wouldn’t be able to go green without it. So, its arrival is a major milestone in the nation’s energy transition.
But behind the scenes, the news about wind power is more sobering. Financially, the industry is teetering, with a parade of companies planning to renegotiate or pull out of contracts, jeopardizing plans for projects that were expected to provide electricity for millions of homes. Inflation is erasing profits, causing some of the largest energy firms in the world to back away. “Returns on offshore wind are becoming more and more challenged,” Shell CEO Wael Sawan told Barron’s last month, just days after a Shell joint venture said it would pull out of a power contract in Massachusetts. Shell won’t build renewable projects that can’t earn initial returns of 6% to 8%, he said.
https://www.msn.com/en-us/money/markets/america-s-bet-on-wind-power-is-running-into-a-big-problem/ar-AA1e9pmy?ocid=msedgntp&cvid=2c09b9863697430a8e6e9ec6d564dfeb&ei=23
