Four NY offshore projects ask for almost 50% price rise
By Paul Homewood
We already know that some developers have pulled out of offshore wind projects off the US NE coast, as they are not viable.
Here is more news on developments off the New York coast:
The developers of four offshore wind farms in New York are seeking average price rises of almost 50% on their offtake agreements.
The New York State Energy Research and Development Authority (NYSERDA) calculated how the companies’ requested adjustment would impact strike prices, and found the average across all four was 48%.
The projects involved are Orsted and Eversource’s 924MW Sunrise Wind project, along with Equinor and bp’s 816MW Empire Wind 1, 1260MW Empire Wind 2 and 1230MW Beacon Wind.
Sunrise Wind previously agreed a price of $110.37 per MWh, and is now seeking a $139.99 price instead, a 27% increase, according to NYSERDA.
Empire Wind 1 requested increasing its strike price from $118.38 to $159.64, a 35% increase, while Empire Wind 2 asked for its $107.50 original price to be increased to $177.84, a 66% increase.
Meanwhile, Beacon Wind wants its $118.00 previously agreed price ramped up to $190.82, 62% more.
The three Equinor and bp projects combined have an average price rise of 55%.
The four projects are seeking a number of reliefs, including retroactively applying an inflation-adjustment mechanism similar to one included in New York’s recent third offshore wind solicitation, along with interconnection cost adjustments, though the exact specifications differ between the developers.
According to NYSERDA, including the inflation adjustment mechanism alone would raise prices for the four projects by an average of 31% (25% for Sunrise Wind and Empire Wind 1, 37% for Empire Wind 2 and Beacon Wind).
So we are looking at a range of prices demanded between $139 and $190/MWh.
In UK terms, that’s £114 to £155/MWh.
Do we need any further proof that offshore wind is not as cheap as made out?
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NOT A LOT OF PEOPLE KNOW THAT 
‘The New York State Energy Research and Development Authority’
This is what happens when a state involves itself with research and development.
To the corporations doing the development, their relationship with the government appears to them to be fascist cooperation. A partnership. They expect their price hike requests to be rubber stamped.
Oh, I imagine those crony capitalist (fascist) rubber stamps are waiving all over the chambers of power even as we write. Got to keep those donations and
politician family jobs rolling in.
This is only part of the story. There are 30% – or even 40% – investment tax credits available to these projects. The problem for the developers is that these are tied to the domestic content of the investments. So a part of the benefits of the tax credits are absorbed by the excess costs of using US-manufactured steel, turbines, etc. Even so the full costs of the projects, excluding protection for US industry, may be 20% or more higher the offtake prices quoted – i.e. £135-£185 per MWh.
Why is it now so difficult to leave a comment?
Beats me.
Any govt. or govt agency that commits itself to a policy for the wide adoption of renewables and seeks heavy political capital from such virtue signalling leaves itself at the mercy of the grant and subsidy farming opportunists.
Shell are doing the same.
https://www.offshorewind.biz/2023/08/01/bp-and-equinor-could-cancel-us-offshore-wind-projects/
BP say they are only looking for a 6%-8% return and can’t achieve that, to my mind, modest return at the old prices.
If BP & Shell are going to invest in a problematic area with plants likely to suffer short life times at 6%-8% then their accountants are quite mad. I would expect a 33% return is more prudent.
Nobody expects or gets a 33% return. That’s fantasy
The pharmaceutical industry certainly expects and gets a greater than 33% return!
Seems about right as a weighted average cost of capital, though recent interest rate rises might be pushing it up.
It comes to something when energy companies prefer to pay $48 million in penalties to reverse out of a wind project, rather than take it on.
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Massachusetts’s electric distribution companies Eversource Energy, National Grid and Unitil have agreed to terminate their power purchase agreements (PPAs) for the Commonwealth Wind offshore wind farm at the request of the project developer, Iberdrola-owned Avangrid, which will pay USD 48 million in penalties for the termination that is yet to be approved by the state’s Department of Public Utilities (DPU).
In pre-filed direct testimony with the Rhode Island Energy Facility Siting Board, where the SouthCoast Wind joint venture is also having hearings as one section of its infrastructure goes through the state, SouthCoast Wind’s CEO Francis Slingsby said that ”… termination, and payment of a financial penalty for termination, has become the prudent commercial course to realize the Project…”, even after factoring in potential tax incentives.
https://www.offshorewind.biz/2023/07/19/avangrid-terminates-long-fought-ppas-in-massachusetts-at-cost-of-almost-usd-50-million/
This shows that comments from the BBC, MPs and others that wind is getting cheaper are obvious lies. MPs probably rely on fake information so putting this information in front of them would act as a counter balance. Some hopes.
“This shows that comments from the BBC, MPs and others that wind is getting cheaper are obvious lies. “
No shit Sherlock!
In the Mail today there is a piece by the overrated Andrew Neil from his, thankfully brief, time at GB News when he interviewed Sushi as the then Chancellor in June 2021. He asked him a simple question, how much will Net Zero cost? Sushi wriggled and blustered to avoid giving an answer. After the interview he said it was the first time anyone had asked. I guess those of us here are not that surprised at the failure of the legacy media nor that the Treasury to have failed to give the Chancellor a figure.
So Sunak never thought to ask? Before voting for it perhaps? As Chancellor when looking at forecasts of the finances of the country?
Good news and bad news.
Green multi-millionaire Dale Vince abandons support for ‘counterproductive’ and ‘pointless’ Just Stop Oil protests to concentrate on giving all his financial backing to helping Labour take power from the Tories
https://www.dailymail.co.uk/news/article-12602641/Dale-Vince-counterproductive-pointless-Just-Stop-Oil-protests-Labour-Conservatives.html
And in return, Labour will give him whatever he wants.
Could it be that Dale Vince’s lawyers have told him that he may be charged himself for aiding and abetting criminal acts carried out by JSO that he funds?
I must ask my MP if she’s noticed the offshore wind castatrophe and the electric vehicle insurance catastrophe.
If you do you’ll likely get a smart-ass reply from one of her green spads.
(BTW: I once raised a FOIA request to find out how many MPs’ assistants were associated with the Green party – I expected that to be a question on their resumes – but was turned down on the grounds that it would be too expensive to trawl through all assistants’ CVs. The implication was that they were paper-based rather than computer-based which would have been a doddle to check).
Using AI this could be done in an afternoon
Just collateral damage, liardetg. EVs and windmills are Uniting Causes on the path to communism.
It’s the march that matters most.
Ask your MP if she wants TO SAVE THE WHALES .
https://nypost.com/2023/08/26/new-documentary-proves-that-offshore-windfarms-kill-whales/
But the whole Windfarm idea is not about saving cost , but about taking more and more money off everybody to destroy the economy .
https://www.investors.com/politics/editorials/climate-change-scare-tool-to-destroy-capitalism/
You are correct, ITRW.
I note how Investors showed their ineptitude in dealing with the communists – ‘destroy capitalism.’
‘Capitalism’ is Marx’s pejorative of free enterprise. Anti communist Westerners should not use the word. Communist sympathizers will read the headline and think, “Good.”
Communists use focus group tested words that evoke positive responses, like “justice” and “equity” and “democracy,” though they care about none of them. They are tools to be used against people who actually do care.
So, I wish Investors had said “scare tool to destroy freedom.”
Note that communists NEVER use “freedom,” even though focus groups would consider it positive. It is conspicuously absent from their vocabulary.
This is why they are bringing back ONshore wind of course.
Apparently a large majority of the population support it. Although I do suspect they only support it until they put a wind turbine near their house. At that point I’ve got a suspicion the support will evaporate.
The nature of the wind turbine beast is that it’s usually found in thinly populated areas.
But the greenafia keep telling us its magnitudes cheaper than fossil fuel & nuclear generation, surely not more lies?
3 big problems
1. That’s approx 4x regular commercial rate
2. Likely doesnt include the cost of major infrastructure to get the electricity to the grid.
3. Probably the worst, its intermittent power and difficult to predict.