According to the Nov. 17 edition of the Cape Gazette, Danish power company Ørsted is continuing to move forward with the Skipjack offshore wind farm off the Delaware coast despite no longer pursuing wind farms off the coast of New Jersey. Let’s take a step back to keep score, shall we? Working our way south from New England:
- Massachusetts – Shell and Ocean Winds North America agreed in August to pay $60 million to cancel contracts to sell power to the state from the proposed 2,400 MW SouthCoast Wind project. One month earlier, Avangrid forked over $48 million to cancel the 1,200 MW Commonwealth Wind project
- Rhode Island – In July, Rhode Island Energy canceled an agreement with Ørsted and Eversource to purchase power from the 884 MW Revolution Wind project
- Connecticut – Spanish utility Iberdrola announced in October it was abandoning the 804 MW Park City Wind offshore project
- New York – Ørsted, Equinor and BP announced in October they would cancel power sale contracts for the 924 MW Sunrise, 816 MW Empire Wind 1, 1,260 MW Empire Wind 2 and 1,230 MW Beacon Wind projects unless the state was willing to renegotiate the old contracts at higher power purchase prices. In response, the state is promising to issue a new offshore bid solicitation in January that will allow these companies to cancel their previous agreements
- New Jersey – Ørsted announced in October it was scrapping plans for Ocean Wind 1 and Ocean Wind 2 off New Jersey. This, despite the New Jersey Legislature passing a law this summer to allow the developer to keep federal tax incentives that would otherwise have been used to lower power bills for ratepayers.
We are told by these wind companies that the cancelations, both real and threatened, are due to macroeconomic factors. Perhaps so, and yet we have been constantly assured by industry and government that wind energy is cheap energy. Moreover, didn't the Inflation Reduction Act expand production and investment tax credits for offshore wind? Then why are these projects going belly up?
Well, I draw two conclusions. One, offshore wind is nowhere near as cheap as advertised, and two, these companies are low-balling bids to win contracts but with every intent to negotiate future concessions on power purchase prices. Not a bad strategy considering blue state gullibility for climate alarmism and naïve expectations of achieving carbon neutrality. New Jersey is holding firm, for now, but New York is caving, and it will be to the detriment of its ratepayers.
Meanwhile here in Delaware, we should hope Ørsted’s Skipjack project is on as precarious a footing as the rest of its mid-Atlantic wind disasters. When it comes to these wildly uneconomic wind fantasies, better they fail early than fail late.
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