The United States currently has no large-scale commercial wind farms, but President Joe Biden’s administration aims to install 30 gigawatts (GW) by 2030 to help decarbonize the wind sector. electricity and the revitalization of the national manufacturing industry.
The federal government has already approved several large-scale projects, the first two of which – Vineyard Wind 1 and South Fork – are expected to produce their first electricity by the end of the year, and a few dozen projects are in various stages of development .
According to a report from the US Department of Energy released on August 24, 27 power purchase agreements totaling more than 17 GW had been signed by the end of May.
However, inflation, supply bottlenecks and higher financing costs have eroded the profitability of many projects, forcing some to cancel purchase agreements, while others are still seeking to renegotiate the conditions, according to the report.
Some developers told Reuters they were also pressuring authorities to relax the conditions for obtaining subsidies under the year-old inflation reduction law.
While wind energy costs have fallen about 50% since 2014, a recent industry survey showed that costs will increase by 11% to 20% over 2022, and in some cases by 30%, according to the report.
The levelized cost of energy (LCOE), which compares the total cost of building and operating a plant to its lifetime output, was between $72 and $140 per megawatt hour (MWh). in the United States, according to an analysis carried out by the investment bank Lazard in April.
This compares to $24 to $96 for large-scale solar power, $24 for onshore wind power and $39 to $101 for combined cycle gas power.
For comparison, in 2022, wholesale electricity prices averaged $92 in New England, $90 in New York, and $83 at the PJM West Hub, which stretches from western Pennsylvania to Washington, DC, according to data from the U.S. Energy Information Administration (EIA).
One megawatt (MW) can power about 1,000 U.S. homes, but because wind is an intermittent resource, 1 MW of offshore wind can power about 500 U.S. homes, according to offshore wind proponents.
Below is a list of major offshore wind projects in the United States:
VINEYARD WIND 1
This 800 MW project off Martha’s Vineyard plans to begin operations by the end of the year. When fully operational in 2024, it is expected to provide enough clean energy for 400,000 homes in New England. The project is owned by Avangrid, part of the Spanish Iberdrola group, and by Danish investor Copenhagen Infrastructure Partners (CIP), specializing in green energy.
SOUTH FORK
Denmark’s Orsted, the world’s leading developer of offshore wind energy, is building this 132 MW project off the coast of Rhode Island and Massachusetts. It also aims to become operational by the end of the year and reach full capacity to power 70,000 homes in 2024.
OCEAN WIND 1&2
In January, Orsted became sole owner of the project offshore southern New Jersey by purchasing the remaining interest from Public Service Enterprise Group.
In June, state lawmakers agreed to have Orsted keep the federal tax credits the project receives instead of passing them on to customers.
Orsted said on August 29 that it expects to make the final investment decision (FID) for the first phase of the project around the end of 2023 or early 2024.
Pending the final investment decision, the commissioning of Ocean Wind 1 is scheduled for 2026. The second phase of the project, Ocean Wind 2, with a capacity of 1,148 MW, is expected to begin commercial operations in 2029.
WIND REVOLUTION
The 704 MW project owned by Orsted and New England power company Eversource Energy is expected to provide 400 MW of electricity to Rhode Island and 304 MW to Connecticut between 2025 and 2026.
Orsted said Aug. 29 that it expects to take FID for the first phase of the project in late 2023 or early 2024.
In March, Orsted and Eversource proposed building a second phase, 884 MW Revolution Wind 2, in Rhode Island’s latest wind RFP.
The state’s power company, Rhode Island Energy, however, decided not to sign a power purchase agreement with the project, citing costs that were too high for consumers.
COASTAL VIRGINIA OFFSHORE WIND TURBINES (CVOW)
The 2,600 MW project owned by US company Dominion Energy is expected to begin construction off Virginia Beach in 2024, subject to federal approval, and be completed by the end of 2026. Dominion has built the first phase of the project – a 12 MW twin-turbine pilot plant – in 2020.
SUNRISE WIND TURBINE
The first phase of the project, Sunrise Wind 1 (924 MW), was due to come online in 2025-2026, but its owner, Orsted, warned in June that it would not be able to make the final investment decision if the price agreed in 2019 was not adjusted for inflation.
New York energy agency NYSERDA said meeting Orsted’s request would mean raising the strike price by 27%, and the New York state regulator has yet to ruled on this request.
Orsted said on August 29 that it expects to make the final investment decision (FID) for the project in late 2023 or early 2024.
EMPIRE WIND 1&2
Two projects owned by Norway’s Equinor and British oil company BP, located south of Long Island, are also seeking to renegotiate the previously agreed purchase price to adjust for inflation and other price increases. costs.
The owners said these adjustments were necessary to maintain the project’s current schedule, with Empire Wind 1 (816 MW) and Empire Wind 2 (1,260 MW) scheduled to enter service in 2027-2028.
NYSERDA estimated that the request would result in an increase in strike prices for the two projects by 35% and 66% to $159.64 per MWh and $177.84, respectively.
BEACON WIND 1
Equinor and BP are also seeking to renegotiate the previously concluded agreement for the supply of electricity from their 1,230 MW Beacon Wind 1 project, located east of Montauk Point.
NYSERDA estimated that this request would cause the strike price to increase by 62%, or $190.82.
Beacon Wind 1 is expected to come online in 2028-2029 and provide enough electricity to power approximately 600,000 homes. A second part of the Beacon Wind concession area, Beacon Wind 2, is similar in size to Beacon Wind 1 and will be developed in the future.
SOUTHCOAST WIND
The project off Massachusetts, previously known as Mayflower Wind, is owned by oil company Shell and Ocean Winds, a joint venture between French company ENGIE and an arm of Portuguese energy group EDP specializing in renewable energy.
The project, whose first electricity production was planned for 2027, is at risk of delay as the owners canceled previously signed power purchase contracts citing bottlenecks in the supply chain and the increase in financing costs.
They paid about $60 million to local utilities to terminate contracts, but said they plan to rebid in the state’s next round of wind power bidding in sea.
COMMONWEALTH WIND TURBINE
The 1,232 MW project offshore Massachusetts, previously part of the larger New England Wind project, also faces potential delays. Its owner, Avangrid, part of Spanish energy company Iberdrola, agreed to pay about $48 million to local utilities to get out of the deal it previously signed. However, Avangrid also said it plans to issue a new tender in the next offshore operation tender to continue the project.
PARK CITY WIND
Avangrid owns this 800 MW project off the coast of Massachusetts, which was previously part of the larger New England Wind project.
In July, Avangrid said it was working to review the economic viability of the power purchase agreement previously signed with regulators and power distribution companies.
The project plans to enter service in 2025-2027.
ATLANTIC SHORES OFFSHORE WIND SOUTH
The joint venture between Shell and French EDF is developing a large offshore wind farm off the coast of New Jersey.
They plan to begin construction of its 1,510 MW first stage in 2024, with a goal of providing electricity in 2027.
In July, Atlantic Shores said it was in contact with state officials to gain additional support for the project, following the state’s decision to grant a tax break to Orsted’s Ocean Wind 1 project.
MARWIN
Maryland’s first offshore wind project is expected to come online in 2025-2026. This 270 MW project belongs to US Wind, a subsidiary of the Italian company Renexia SpA.
MOMENTUM WIND
The 808 MW project, also owned by US Wind off the coast of Maryland, is also expected to come online in 2026-2028 and produce enough clean energy to power more than 250,000 homes.
SKIPJACK 1&2
The project offshore Maryland is owned by Orsted and consists of two parts. The Skipjack 1 project, with a capacity of 120 MW, is expected to start producing electricity in 2026-2027, and the Skipjack 2 project, with a capacity of 846 MW, a year later.
2023-09-11 20:55:45
#U.S #offshore #wind #projects #face #inflation #headwinds
