Forbes
November 18, 2022
The hype about offshore wind energy keeps getting scuttled by reality. That’s the clear conclusion from last month’s announcement that Spanish utility company, Avangrid, was halting work on the proposed 1,200-megawatt Commonwealth Wind project because it was “no longer viable.” The company also announced it was delaying the start of another offshore project, the 800-megawatt Park City Wind project.
While Avangrid has since said it would still move forward on the Commonwealth project, here’s the undeniable truth: the fewer offshore wind turbines get built, the better it will be for ratepayers, the commercial fishing industry, and the critically endangered North Atlantic Right Whale.
As I reported in these pages last year, the history of the domestic offshore wind industry is chock-full of lofty goals and wrecked plans. Over the past two decades, numerous projects have set sail only to end up stranded on the shoals of despair. The problems today are the same ones that doomed the infamous Cape Wind project: cost and permitting.
In 2001, the backers of the proposed 468-megawatt Cape Wind project filed their first permit application. It would become one of the most contentious energy projects — of any kind — in US history. Despite getting approvals from the federal government, and the backing of many elected officials in Massachusetts, the project faced enormous opposition, including from anti-vaxxer Robert F. Kennedy Jr., whose family owns a vacation swankienda in Hyannisport. Cape Wind was officially deep-sixed in 2015.
In 2010, Google announced the Atlantic Wind Connection, an offshore transmission project that aimed to connect some 6,000 megawatts of proposed offshore wind capacity. Back then, GoogleGOOG -1.7%, “We believe in investing in projects that make good business sense and further the development of renewable energy.” Google (now Alphabet) and three other partners, including Marubeni Corporation, said they would spend some $5 billion on the project. But as one summary put it: “The proposal ran into significant regulatory and financial hurdles before it fell apart.”
In 2011, then-Interior Secretary Ken Salazar said the Obama administration had set a goal of “10 gigawatts of offshore wind generating capacity by 2020 and 54 gigawatts by 2030.” How has that worked? Well, 11 years after Salazar’s speech, the US has seven turbines operating offshore with a total of capacity of 42 megawatts — or some 9,958 megawatts short of the goal laid out by Salazar.
Why is offshore wind becalmed? The first reason is so obvious that Ray Charles could’ve seen it: doing anything in water increases costs. Adding saltwater to the mix sends costs toward the stratosphere. According to the Energy Information Administration, generating electricity with offshore wind turbines has always been one of the most expensive ways to generate power. There’s little reason to expect the high cost of offshore wind to come down. In fact, the opposite appears to be true. Gordon Hughes, a professor of economics at the University of Edinburgh, has found that the output of Europe’s offshore wind turbines has been declining by about 4.5% per year. In a report titled “Wind Power Economics: Rhetoric and Reality,” published by the London-based Renewable Energy Foundation in 2020, Hughes concluded that declining output will result in higher operating costs that will start to exceed revenues “after 12 or 15 years. Operators will either cease production or drastically cut operating costs leading to closure within a relatively short period. There is no way out of this trap because opex costs are linked to reliability; the decline in reliability with age means that high opex costs must be incurred to maintain production.” (Hughes was on the Power Hungry Podcast in November 2021.)
The financial and performance problems of offshore wind can also be seen with Dominion Energy’sD +2.5% planned 2.6-gigawatt Coastal Virginia project. In August, the company was ordered by the Virginia State Corporation Commission to provide a performance guarantee on the project. In September, Dominion said the guarantee “will prevent the project from moving forward and the company will be forced to terminate all development and construction activities.” Since then, the state and the company have reportedly agreed to cap cost overruns on the project to a mere $1 billion.
None of these facts has stopped the tsunami of offshore hype. In September, the White House issued a press release that said “President Biden’s vision and leadership has jumpstarted the American offshore wind industry and made America a magnet for clean energy investments. The President set a bold goal of deploying 30 gigawatts of offshore wind by 2030.”
But last month, Avangrid said its offshore project was being stymied by “global commodity price increases…sudden increases in interest rates, prolonged supply chain constraints, and persistent inflation.” All of those factors, the company said, require it to seek a new power production agreement with its customers, which would presumably include big increases in the price it would be paid for electricity produced by the project. On Wednesday, the Commonwealth Wind saga took another turn when Avangrid reversed course and said that it would go forward with the project. According to an article published by the news outlet Offshore Wind, Avangrid “notified the Massachusetts Department of Public Utilities that it decided to continue with the power purchase agreements for its Commonwealth Wind project that are currently undergoing review and approval proceedings. However, the developer has kept its position that under the conditions in the current PPAs the 1.2 GW project would not be economically viable.”
So, Avangrid is moving moving forward, maybe, with Commonwealth Wind even though the project isn’t economically viable? Call me confused.
In addition to the cost and supply chain problems, offshore wind projects are also facing a flotilla of litigation. On November 8, the Responsible Offshore Development Alliance (RODA), a national coalition of “fishery-dependent businesses and associations,” filed a motion for summary judgment in its lawsuit against the Bureau of Ocean Energy Management and other federal agencies, for their approval of an offshore wind project called Vineyard Wind 1. (Last year, Annie Hawkins, the executive director of RODA, appeared on the Power Hungry Podcast.) In a November 14 press release, the group said the federal approval of the Vineyard Wind project was “arbitrary, capricious, and contrary to law,” and that the approval violated several federal statutes “including the Outer Continental Shelf Lands Act, National Environmental Policy Act, Clean Water Act, Endangered Species Act, Marine Mammal Protection Act, Merchant Marine Act, and Administrative Procedure Act.” RODA’s lawsuit puts particular focus on the approval of Vineyard Wind even though federal authorities had “not yet determined whether the proposed action would jeopardize the endangered North Atlantic Right Whale.”
According to an October 24 article published by the Natural Resources Defense Council (which, by the way, has been a cheerleader for offshore wind development) “Fewer than 340 North Atlantic right whales remain. Right whales are rapidly declining because of vessel strikes and fishing gear entanglements, and the species faces all sorts of other threats, including underwater noise pollution.”
Of course, putting hundreds of wind turbines in the middle of whale habitat will increase the amount of underwater noise pollution and further stress the whale population. Last year, I contacted Jesse Ausubel, the director of the program for the Human Environment at Rockefeller University about the mad dash for offshore wind. Ausubel is among the world’s foremost experts on the ocean and the creatures that live in it. He was one of the early proponents of the Census of Marine Life, a 10-year, multi-nation project that resulted in some 540 expeditions that engaged some 2,700 scientists who discovered more than 1,000 new marine species and have several thousand more waiting to be described. I will repeat here was Ausubel told me then: “Environmentalists have not yet grasped the massive industrialization of the oceans now underway and proposed.”
Whether the issue is cost to ratepayers, grid resilience, or the preservation of North Atlantic Right Whales, it’s abundantly obvious that the entire notion of offshore wind is a boondoggle. Rather than industrialize the oceans, policymakers should paddle back to shore with a sober focus on scalable, low- or no-carbon sources of electricity generation, including, of course, natural gas and nuclear energy.
I have one more conclusion, and it’s one that I’ve earned after watching the development of the renewable-energy sector for more than a decade. It’s this: the only thing dumber than onshore wind is offshore wind.
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