Out of masterresource
By Kennedy Maize
This post provides information on the financial problems of Danish utility Ørsted, the recent BOEM auctions, and the resistance to Maryland Governor Wes Moore. Today, operational offshore wind capacity is less than 50 megawatts, while the Biden-Harris administration aims to reach 30,000 MW by 2030.
Orsted
Denmark's Ørsted, the world's leading developer of offshore wind turbines, reported a loss of $575 million in the second quarter, partly due to disappointing developments in the United States.
The company has postponed commercial operations of its 704 MW Revolution Wind project off the coast of Rhode Island and Connecticut from 2025 to 2026. Ørsted's ambitious US offshore wind program has stalled despite solid support (subsidies, permits) from the Biden administration.
A year after an auction for leases in the Gulf of Mexico conducted by the Interior Department's Bureau of Ocean Energy Management (BOEM) failed to attract significant interest, the BOEM continues to delay another attempt to find suitable bidders off the East Coast.
Reuters summed up Ørsted’s concerns as follows:
Ørsted's impairments are also related to the Ocean Wind project in the US, which the company halted development last year, a rise in US interest rates and the company's decision to halt development of its green e-methanol project FlagshipOne, which was due to open in Sweden next year. Shares in Ørsted, once a darling of green investors, closed down 7.2% after previously falling as much as 9.3%. They are still less than a third of their value since their peak in early 2021.
BOEM Auctions
In March BOHEMIA interest in another auction in the Gulf of Mexico, causing a yawn in the industry. The agency announced on July 26 that it
received 25 comments in response to March 2024 [Proposed Sale Notice]where one company has expressed interest in participating. As a result, BOEM is canceling this sale due to lack of competitive interest. BOEM may elect to conduct a lease sale at a later date depending on industry interest.
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BOEM held a lease auction last week (August 14) for the Mid-Atlantic region off Delaware, Maryland and Virginia, for which there were interested bidders.
Norway's Equinor Wind won a preliminary lease for 101,443 acres 26 nautical miles off Delaware for $75 million. Dominion Energy's subsidiary Virginia Electric and Power won a preliminary lease for 176,505 acres 35 miles off the entrance to the Chesapeake Bay for $18 million. Six companies participated in the auction.
The Equinor lease is not far from where Baltimore-based US Wind holds a federal lease for a proposed two-phase 2 GW project off the coast of Maryland's Ocean City. BOEM issued a final environmental impact statement for the Maryland project last month (July 29). Maryland has also issued renewable energy certificates for the US Wind project.
US Wind, reports BOEM,
proposes to install up to 114 turbines, up to four offshore substation platforms, a weather tower, and up to four corridors for offshore export cables that would come ashore in the Delaware Seashore State Park. The lease area is located at the closest shore points approximately 8.7 nautical miles off the coast of Maryland and approximately 9 nautical miles off the coast of Sussex County, Delaware.
US Wind is also developing a facility to manufacture monopile foundations for wind power projects in partnership with Spain's Haizea Windgroup at Baltimore's Sparrows Point, the former site of Bethlehem Steel, then the largest steel mill in the world. According to the company,
“Sparrows Point Steel is well on its way to becoming the premier offshore wind logistics and manufacturing facility on the East Coast. Haizea’s extensive knowledge and expertise will solidify Maryland’s role as a hub for offshore wind production in the U.S.”
MD Governor Wes Moore against critics
Maryland Democratic Governor Wes Moore faced opponents of his aggressive push for offshore wind energy in Ocean City last week (Aug. 16). Local TV station WBOC spoke with Moore about the growing local opposition on the Eastern Shore of Maryland, Delaware and Virginia. Earlier this month, Moore signed a memorandum of understanding with BOEM to open up more offshore federal land for wind energy use. Last year, Maryland passed a new law that increased the state's goal for offshore wind energy use to 8.5 GW.
Moore told WBOC, “You're talking about being able to power three million homes in the state of Maryland and making us a net exporter of clean energy. That's exciting, it brings new jobs and new opportunities.”
Many people on the East Coast, especially those who make their living in the Chesapeake Bay, see the growing wind farms as a potential disruption to their way of life. Jimmy Hahn, a commercial fisherman from the Ocean City area, told the television station: “They're trying to steal our territory, they've stolen the seabed, they've stolen the area where we fish. Their last resort is to buy the place where we sell our fish, and once they do that, we'll have no place else to work.”
Moore responded: “All of these conversations need to be had with local leaders and local communities. There needs to be measures of transparency and accountability, which is what we hope to see and what we will achieve.”
Vineyard wind: Yellow flag
The Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE) has Avangrid a yellow flag to continue limited work on its Vineyard Wind project off the coast of Massachusetts.
BSEE shut down the 804-MW project last month after a 107-meter-long blade failed on one of its turbines, scattering debris as far as the beaches of the nearby island of Nantucket and as far as the mainland beaches of Cape Cod. Reuters reported that the Interior Department confirmed the updated shutdown order last week (Aug. 13) while Avangrid and blade manufacturer G Vernova continue to investigate the cause of the massive blade failure.
“The updated suspension order still does not allow further blade installation or power production at this time, the companies said,” according to Reuters. Vineyard Wind and GE Vernova said they would remove portions of the damaged blade that remained on the wind turbine to avoid the risk of further marine pollution.
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