U.S. President Joe Biden’s administration is aiming to have 30 gigawatts (GW) of installed wind power capacity by 2030 in an effort to decarbonize the power sector and boost domestic manufacturing. Although the country currently has no large-scale commercial wind farms in operation, several projects have received federal approval, with the first two, Vineyard Wind 1 and South Fork, expected to deliver power by the end of this year. However, inflation, supply bottlenecks, and higher financing costs have led to profitability issues for many projects, with some canceling offtake agreements and others seeking to renegotiate terms.
According to a report by the U.S. Department of Energy, by the end of May, 27 power offtake contracts totaling over 17 GW had been signed. However, the report also highlighted that wind power costs have risen by 11%-20% in 2022, and in some cases by 30%. The levelized cost of energy (LCOE) for wind power in the U.S. ranges between $72 and $140 per megawatt hour (MWh), compared to $24 to $96 for utility-scale solar and $24 for onshore wind. Despite these challenges, wind power remains an important component of the country’s renewable energy transition.
One of the major offshore wind projects in the U.S. is Vineyard Wind 1, an 800-MW project off the coast of Martha’s Vineyard. It is expected to begin operations by the end of this year and will eventually supply clean energy to around 400,000 homes in New England. The project is owned by Avangrid and Danish green energy investor Copenhagen Infrastructure Partners.
Another significant project is South Fork, a 132-MW wind farm being developed by Denmark’s Orsted off the coast of Rhode Island and Massachusetts. It is also expected to be operational by the end of this year and will have the capacity to power approximately 70,000 homes.
Orsted is involved in several other offshore wind projects in the U.S., including Ocean Wind 1&2 off southern New Jersey. The company plans to take the final investment decision on Ocean Wind 1 by the end of 2023 or early 2024, with commercial operations expected to begin in 2026. Ocean Wind 2, with a capacity of 1,148 MW, is set to start operations in 2029.
Additionally, the Coastal Virginia Offshore Wind (CVOW) project, owned by Dominion Energy, is scheduled to begin construction in 2024 and complete by late 2026. The 2,600-MW project off the coast of Virginia Beach will significantly contribute to the country’s wind power capacity.
However, some projects are facing potential delays and challenges. Sunrise Wind, Empire Wind 1&2, Beacon Wind 1, SouthCoast Wind, and Commonwealth Wind are all seeking to renegotiate previously agreed strike prices due to inflation and cost increases. These projects are crucial for meeting the country’s renewable energy goals, but adjustments need to be made to ensure their economic viability.
Despite the obstacles, the U.S. is making significant progress in offshore wind development. These projects will not only help decarbonize the power sector but also create job opportunities and revitalize domestic manufacturing. The Biden administration’s ambitious target of 30 GW of installed wind power capacity by 2030 signifies the country’s commitment to clean energy and combating climate change.
Original Story at www.reuters.com – 2023-09-11 21:10:00
Comments are closed.