After a tough 2023, US offshore wind industry aims for a comeback in 2024 with major projects.
The U.S. offshore wind industry is gearing up for a promising 2024. This follows a challenging year with stalled projects and significant financial losses.
This industry is key to achieving decarbonization goals set by several states and President Biden. These goals are crucial in the fight against climate change.
However, 2023 saw a slowdown in progress. Rising costs led to canceled contracts in Massachusetts, Connecticut, and New Jersey. High inflation, interest rates, and supply issues were to blame.
Major European energy firms like Orsted, Equinor, and BP faced setbacks. They wrote off about $5 billion on U.S. projects. Existing contracts couldn't cover the soaring building and financing costs.
In 2024, developers plan to rejuvenate stalled projects. They aim to re-bid in state solicitations in New York, New Jersey, Massachusetts, and Connecticut.
Eli Rubin, a senior analyst at EBW Analytics, commented. "While prices may rise, states seem committed to clean energy," he said.
Ryan Ferguson of Danish firm Orsted highlighted the industry's future. "State actions and federal support will boost demand for offshore wind," he said. This will also create jobs, spur supply chain investment, and increase domestic energy production.
New York is already taking action. It recently launched a solicitation allowing for contract renegotiations. This will enable higher project prices. Winners for an expedited solicitation will be announced in February.
This move came after threats by developers, including Orsted, BP, and Equinor. They had considered canceling contracts due to rate hikes and inflation.
New York's first offshore wind farm, Orsted's 132-MW South Fork, started operating in December.
In New Jersey, Governor Phil Murphy directed a similar expedited solicitation for early 2024. This came after Orsted canceled two major projects.
Shell and France's EDF are progressing on New Jersey's 1,510-MW Atlantic Shores farm. It's expected to be operational by 2027-2028.
In Virginia, Dominion Energy's Coastal Virginia Offshore Wind project remains on budget. Costing about $10 billion, this 2,587-MW project is set to start construction in May 2024. It should be operational by late 2026.
Massachusetts is also seeing advancements. Avangrid and Copenhagen Infrastructure Partners' 806-MW Vineyard Wind 1 is nearing operational status.
Avangrid, facing setbacks in 2023, has plans to re-bid on two projects. These are the 1,232-MW Commonwealth Wind and 804-MW Park City in future solicitations.
Ken Kimmell of Avangrid expressed optimism. "2024 will see competitive bids leading to viable project contracts," he said.
Avangrid, majority-owned by Spain's Iberdrola, is preparing for a busy year ahead.
Orsted is also planning to start construction in spring 2024. Its Revolution Wind project will provide 704 MW to Rhode Island and Connecticut consumers.
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