Columnist Terence Corcoran just announced “the current collapsing state of climate policy around the world” and the rout includes much-vaunted alternative energy systems crumbling fiscally. But it’s not just us, Corcoran or other usual suspects on the skeptical side. The calls are increasingly coming from inside the green house. Canary Media notes unhappily that “The US offshore wind industry faces a moment of reckoning” as a “wave of project cancellations, caused by periods of skyrocketing inflation, high interest rates, choked supply chains and financial troubles, have put hopes that the industry will play a major role in reaching decarbonization targets in serious doubt.” Even the New York Times is phoning it in.
The gray lady warned that “Wind Power, Key to Democrats’ Climate-Change Goals, Faces a Crisis” because “Instead of gathering momentum, the industry is confronting obstacles that could hinder its ability to realize the renewable resource’s promised benefits.” The publication North American Wind Power led off on Nov. 1 with “Orsted: Ocean Wind 1 and 2 Are Being Deep-Sixed; Revolution Wind Staying the Course”. And Heatmap Daily called it “Orsted’s debacle”. Fewer and fewer people are pretending it didn’t happen, or calling it progress.
Of course there’s always someone. Over at the New York Times “Climate Forward” David Gelles surveys the dismal state of the American electrification revolution and waves a magic wand:
“Unless the U.S. and other developed countries reinvent their electricity grids, the revolution in clean energy that has given us radically cheaper solar and wind power will be for naught. The clean energy will have nowhere to go.”
Right. The radically cheaper solar and wind power that can’t survive without subsidies that make power unaffordable. (Mind you another Canary Media piece trumpets that “The Biden administration has a multifaceted plan to speed construction of the transmission lines needed to decarbonize the U.S. grid. Part of that plan: offering loans to bridge the gap between securing financing to build transmission projects and lining up the buyers of the clean energy they’re meant to deliver.” One point three billion dollars’ worth. What the heck.)
We also note that one if by land, two if by sea, since another story out of CNBC says:
“Shares of Siemens Energy tumbled 35% on Thursday after the company sought guarantees from the German government. The wind power giant made headlines earlier this year, when it scrapped its profit forecast, citing a ‘substantial increase in failure rates of wind turbine components’ at its wind division Siemens Gamesa.”
Facing painful reality is always, well, painful. It’s still welcome, or should be, not because we’re savouring the Schadenfreude (though we are a bit) but because while knowledge can be painful, ignorance is dangerous. And as we’ve noted elsewhere, when the promised apocalypse and Green Revolution were a long way off you could afford to wave your arms about and make vague but grandiose claims. And you could call critics ugly names and move on. But now it’s time for frankness. As Reuters just wrote:
“BP’s renewables boss said on Wednesday the U.S. offshore wind industry is ‘fundamentally broken’ as BP and its partner Equinor (EQNR.OL) study options to develop huge projects off the coast of New York after writing down $840 million of their value. The offshore wind industry, one of the fastest growing energy sectors, has recently suffered a string of major setbacks due to equipment reliability issues, supply chain problems and sharp cost increases.”
Not its head of fossil fuels. Its renewables boss. They no longer want to mislead one another while looking dopey. They’re really smelling the coffee… or gangrene.
NAWP explained that on the ostensible grounds that “macroeconomic factors have changed dramatically over a short period of time,” the Danish-based firm in question, “the world’s largest offshore wind developer” according to Canary Media, was cancelling two offshore projects meant to bring 2,248 MW off the New Jersey shore and going ahead only with one aiming at just 704 MW off Rhode Island. And here we were told wind and solar were basically a licence to print money. So why is the largest EV charging station in the world powered by diesel generators? Oh, that’s awkward.
Under normal circumstances a firm postponing or even cancelling an investment would just be chalked up to the creative chaos of markets. But with the powers that be determined to get to Net Zero by 2030, and the existing trajectory dismally inadequate, firms need to be doubling or tripling their ambitions not scaling them back by 75%. Why aren’t they?
Well, the Times comes clean to its readers. They cost way too much:
“An assortment of recent obstacles to projects in New York, New Jersey and Connecticut are almost certain to delay – and possibly derail – Northeastern states’ grand ambitions to harness the winds blowing over the Atlantic Ocean. Four projects that were supposed to provide electricity to New York City and its suburbs are in limbo after being denied big increases in subsidies.”
Canary Media was upfront about the consequences:
“Now state and federal policymakers are grappling with how to respond. If they want to achieve even a fraction of the Biden administration’s goal of building 30 gigawatts of offshore wind by 2030 – a target most analysts say is out of reach – they’ll need to significantly increase their financial support to overcome cost increases and bolster an industry in turmoil.”
However, they add, “this course of action presents a significant dilemma.” And you can probably guess what it is. But it’s worth noting that if it were really true that alternatives were now competitive with, let alone cheaper than, traditional energy sources it couldn’t be happening:
“Northeast states from Massachusetts to New Jersey have made offshore wind a central part of their mandated decarbonization plans. But they’re also under heavy pressure to limit the impact of rising electricity costs. If state policymakers and regulators choose to provide more favorable terms for offshore wind developers, they risk driving utility bills even higher and having to face the economic and political consequences of doing so.”
Naturally they do their own math and say what a bargain it would be:
“energy analysts and environmental groups warn that the cost of failing to act could be much higher than the costs of intervening. Less offshore wind means more fossil-fueled generation, much of it relying on fossil gas, which can experience severe price spikes. And that calculation doesn’t include the climate change and human health costs of continued reliance on those dirty power plants.”
So as usual (drum roll please) we can’t afford not to. Or rather you can’t, since of course energy analysts, environmental groups and Canary Media aren’t putting their money where their mouths are.
Mind you the hat is still out from those who are, or were. The NAWP piece noted that a spokesperson said of the cancellation of the two big New Jersey projects “Make no mistake: Offshore wind’s future in the U.S. is strong” and added “We are encouraged by the governor’s resolute commitment to building a robust industry and look forward to the results of the state’s third solicitation round.” So they’ll take more subsidies to build power that isn’t commercially viable, if that’s what politicians and taxpayers want.