“2023 is a difficult year for offshore wind power in the United States.”Troy Patton,Chief Operating Officer of Denmark’s Woesen Energy in North America,said at the recently concluded Houston International Offshore Oil and Gas Technology Conference and Equipment Exhibition that the company will cancel two wind power projects in the waters near New Jersey,with a total installed capacity of 2.2 gigawatts.In addition,according to US media reports,three offshore wind power projects with a total installed capacity of 3.2 gigawatts have also been cancelled in the United States.
The intensive cancellation of offshore wind power projects has raised concerns among many industry insiders.It is widely believed that due to the long development cycle of offshore wind power,the United States may find it difficult to meet the government’s 2021 target of installing 30 gigawatts of offshore wind power by 2030.
Objectively speaking,the coastal area of the Northeast United States along the Atlantic Ocean is an ideal area for developing offshore wind power.This area has a shallow continental shelf that facilitates the installation of wind turbines,developed ports and manufacturing industries,and a geographical location close to coastal population and economic centers.
In addition,the US government has introduced many favorable policies in recent years that are conducive to the development of the renewable energy industry,providing tax incentives and other incentives for offshore wind energy development.Many European wind power giants have also entered the US market and launched multiple offshore wind power projects.
So,why are offshore wind power projects in the United States currently in a predicament?What impact will this have on the energy transition in the United States?
Industry experts say that the current financial environment in the United States is one of the important obstacles facing offshore wind power development.The long-term high inflation combined with high interest rates has led to a significant increase in financing costs for many offshore wind power projects,making it difficult to maintain economic sustainability.”The sharp rise in commodity prices,including steel and copper,as well as construction operating costs,has made contracts signed years ago no longer financially viable,”said Christopher Nizrecki,an American energy expert
Nizrecki pointed out that factors such as labor shortages,upgrading of onshore power grids,and false information released by interest groups have all hindered the development of offshore wind power in the United States.
Meanwhile,the United States is developing slowly in supporting infrastructure construction and manufacturing industries necessary for offshore wind energy development.Currently,the supporting facilities for the US offshore oil and gas industry are mainly concentrated in the southern Gulf of Mexico,while the northeast lacks sufficient supporting facilities.In addition,the premise of US legislation requiring fiscal subsidies is to use”Made in America”,which creates artificial obstacles for offshore wind energy development.
From the market trend,due to the abundant natural gas resources in the United States,prices are far lower than those in Europe and East Asia,which objectively compresses the profit margins of offshore wind power development.The current policy benefits are not enough to bridge this gap.
This year is an election year in the United States,and the political game between the two parties has also brought uncertainty to offshore wind energy development.The Republican Party has stated that once they win the election,they will immediately stop the current government’s support for offshore wind power development,as offshore wind turbines”kill birds and whales.”.
Analysts say that in the long run,energy transformation is the trend to address climate change,and offshore wind power development can help the United States and other countries and regions with conditions around the world advance the process of energy transformation.However,currently it appears that the development of offshore wind power in the United States is facing difficulties,and the”favorable wind”that should have driven energy transformation has become the”unfavorable wind”.