In a Wall Street Journal article this week titled "Wind-Powered Projects Hit by Rising Costs" we learn that Big Wind is in trouble and backing away from projects.
Some firms have already eaten multimillion-dollar termination fees to pull out of East Coast projects or written down investments because of rising costs, battering clean-energy stocks. Analysts say New York’s attempt to find new price points acceptable to developers, regulators and investors suggests the broader market’s adjustment won’t be easy. “Does the market have the courage to kind of pay these higher prices for clean energy?” David Hardy, chief executive of energy firm Ørsted Americas, said at a conference in New York last month.
He added that ratepayers would ultimately be the ones ponying up. “But the question is, like: What’s the alternative?” he said.
If all you have is a hammer, everything looks like a nail. There are alternatives that are cheaper and way more reliable and way more safe for sea life and wild life. Here are the wind numbers that are rising by the week
The new group of projects comes with a projected strike price—a cost index that helps decide residents’ bills—of $145.07 per megawatt hour of electricity over their yet-to-be-finalized 25-year contracts. According to the state, that is about 28% higher than the older proposals’ average but 13% less than the rate developers collectively requested from regulators.
New York’s new proposals will boost ratepayers’ bills by about 2.7%, or more than $35 a year, for the lifespan of the projects, according to state projections. The expected sum is four times more than what officials estimated when the first round of contracts was struck in 2019.
And then the chickens come home to roost as they always do
Equinor last week told investors it wrote down about $300 million from its New York project, or roughly half of its value. Shares in Ørsted, which has projects off the East Coast, Europe and Taiwan, have plunged nearly 80% since early 2021. Other developers and suppliers have also taken hits. Shares in Siemens Energy, a key producer of turbines and other equipment, crashed to record lows last week after the company said it was in talks with the German government and banks about guarantees to back long-term projects. General Electric, meanwhile, said in its earnings results last week that it expects to book about $1 billion in losses from its offshore operations this year and next.
As we await the latest rate increases for PG&E at least California isn't going wind-crazy. I'm always amazed whenever I drive over the Altamont Pass how many wind turbines are still.
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