Biden-subsidized offshore wind developer stories large losses in newest blow to business – What’s occurring?
From THE DAILY CALLER
Owen Klinsky
Contributor
A Danish renewable energy group took huge impairment losses on Thursday after postponing the launch of one of its offshore wind projects in the United States, according to its earnings report for the first half of 2024.
Orsted estimated that the value of its assets fell by $472 million in the first half of 2024, mainly due to delays at the onshore substation for its 704 megawatt (MW) Revolution Wind project off the coast of Rhode Island and Connecticut, the report showed. The company also reported a number of other issues, including losses related to the suspension of its Ocean Wind projects in New Jersey and its abandoned attempt to produce environmentally friendly methanol in Sweden.
“Despite encouraging progress on our US offshore wind project Revolution Wind, the construction of the onshore substation for the project has been delayed,” said Orsted CEO Mads Nipper regarding the delay. “This is of course unsatisfactory and we continue our committed efforts to de-risk our portfolio.”
The delay at Revolution Wind was due to soil contamination at an onshore substation and resulted in an impairment of $310 million, or approximately 65 percent of the total impairment amount.
According to Reuters, Orsted's share price fell as much as 9 percent after the earnings announcement.
The U.S. offshore wind industry has been hit by a wave of project delays, missed production targets and public backlash over the past year.
New York state abandoned three offshore wind projects in April after failing to reach power purchase agreements with the project developers. The failed efforts contributed to New York's Democratic governor, Kathy Hochul, launching an official review in July and admitting that the state would miss its goal of generating 70% renewable electricity by 2030.
According to a July report by the American Clean Power Association, offshore wind energy production capacity will be just 14 gigawatts by 2030, less than half the Biden administration's target.
The industry also came under criticism in July after a broken wind turbine off the coast of Nantucket sent debris into the sea, leading to the closure of several beaches. (RELATED: 'A bunch of suits trying to cover their tracks': Beach town residents criticise offshore wind developers for polluting coasts)
The Biden administration has provided billions of dollars in subsidies to the offshore wind industry, including Orsted.
“We attach great importance to minimising risks in project execution and giving priority to growth options with the highest value creation potential,” said Nipper on Orsted’s first-half results.
Orsted and the White House did not immediately respond to requests for comment.
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