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Posts Tagged ‘Atlantic wind’

Ørsted’s troubles and Atlantic wind decommissioning

Posted in decommissioning, Offshore Wind, tagged , , , , , , , , on August 14, 2025| 1 Comment »

Ørsted’s stock price plummeted on Monday following the announcement of a $9.4 billion rights issue to fund the Sunrise Wind project. The share price has remained depressed (chart below).

Also, although Ørsted attributes its financial woes to the change in US policies, it’s apparent in the second chart (5 year trend) that the decline in Ørsted’s valuation has been ongoing since 2021.

In March, Fitch downgraded Ørsted’s rating to BBB from BBB+, and its subordinated rating to BB+ from BBB-. Further downgrades would seem to be a distinct possibility.

Meanwhile, decommissioning financing for the 3 Ørsted projects under construction in the US Atlantic is far from assured:

  • Revolution Wind: As they did for Vineyard Wind, BOEM approved Ørsted’s request to defer full decommissioning financial assurance until 15 years after the beginning of construction (see attached letter). This approval was prior to the Renewable Energy Modernization Rule (effective June 29, 2024), which eliminated the need for such waivers.
  • Sunrise Wind: Ørsted is now solely responsible for funding and constructing this project given the company’s failure to find investment partners. Presumably, decommissioning financial assurance was not required given BOEM’s latitude under the so-called “Modernization Rule.”
  • South Fork Wind: As is the case with Sunrise Wind, BOEM presumably allowed Ørsted to defer financial assurance for decommissioning as permitted by the “Modernization Rule.”

According to Ørsted, almost 70% of the turbines are installed at Revolution Wind and the first foundations have been installed at Sunrise Wind. South Fork Wind, 12 turbines and an offshore substation, is complete.

Given Ørsted’s strained finances, will BOEM now opt to require decommissioning assurance as provided for in 30 CFR § 585.517?

Ørsted’s situation is atypical in that the Danish government owns a majority (50.1%) stake in the company and Equinor, which is 2/3 Norwegian govt owned, holds a 9.8% stake. How will government ownership factor into BOEM decisions regarding decommissioning assurance? Note that Norwegian govt lobbying may have been one of the factors influencing the decision to allow the resumption of construction on Equinor’s Empire Wind project.

Meanwhile, two Danish opposition parties are calling for the state to relinquish its ownership stake in Ørsted.

REV_0486_Fin Assur Decom Departure Appr LtrDownload

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Irrational exuberance revisited – the record breaking February 2022 Atlantic Wind sale

Posted in climate, energy policy, Offshore Wind, tagged , , , , , , , on April 21, 2025| Leave a Comment »

Bidding at the February 2022 Atlantic (NY/NJ) wind sale seemed incomprehensible given the economic and political uncertainties associated with offshore wind development.The 6 leases garnered bids ranging from $285 million to an astounding $1.1 billion, with total high bids of $4.37 billion! The Administration’s victory message correctly boasted that this was the “nation’s highest grossing competitive energy lease sale in history.”

The intense bidding was driven by the lure of subsidies, guaranteed power sales, unprecedented Federal and State promotion, peak climate activism, inattention to mounting public opposition, and irrational expectations regarding the role of offshore wind in powering the regional economy.

That wind bubble has since burst, as demonstrated by the lackluster (at best) August 2024 Atlantic sale, the disinterest in Gulf of America wind leases, and recognition of the costly realities of floating turbine projects in the Pacific. Any air that remained in the balloon was released following the Presidential election.

The table below summarizes the sale results and the current status for the 6 leases issued following the 2/2022 sale. One lease has been essentially terminated by the partners and the State. The other leases are in holding patterns in the planning phases.

high bidderlease #acresbid ($millions)status
Bluepoint Wind (EDP, ENGIE, Global Infrastructure Partners)053771,522765Site Assessment Plan (SAP) review
Attentive Energy
(Total and Corio Generation)		053884,332795Construction and Operations Plan (COP) review
Community Offshore Wind
(RWE, National Grid)		0539125,9641100no plans submitted
Atlantic Shores
(Shell, EDF)		054179,351780dead?
Invenergy
054283,976645no plans submitted
Vineyard Mid-Atlantic (Avangrid, Copenhagen Industy Partners)054443,056285COP review

The first US commercial offshore project, Vineyard Wind, has proven to be a major step backward for the wind industry. After being granted questionable financial and quality assurance waivers to reduce costs and “allow Vineyard Wind to adhere to its construction schedule,” the July 2024 turbine blade failure and subsequent lightning strike have raised new questions about the technology, industry, and regulatory regime. The report on the blade failure, which should arguably be a precursor to the resumption of Atlantic wind development, has yet to be released.

The one shining light, relatively speaking, for Atlantic wind development, has been Coastal Virginia Offshore Wind. That large project is on track to be completed at the end of 2026. Although the cost has risen about nine per cent, to $10.7 billion, that increase is understandable given the higher than anticipated costs for upgrading the onshore network.

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Atlantic wind: attention shifts to EPA

Posted in Offshore Wind, Regulation, tagged , , , , , , on March 25, 2025| Leave a Comment »

In February, EPA Region 2 asked the agency’s Environmental Appeals Board to remand Atlantic Shores’ air emissions permit back to the Region for reconsideration. That remand (attached) was granted on 14 March over the objections of Atlantic Shores Offshore Wind.

Atlantic Shores Offshore Wind still exists despite the exit of 50% partner Shell and a $940 million write down by the remaining owner EDF. The diagram depicts Atlantic Shores South (0499) and North (0549) lease areas.

EDF intends “to preserve the company and its future development.” Whether or not they can hold the leases indefinitely without pursuing development remains to be seen. BOEM’s diligence regulations for offshore wind projects are vague, and neither the Construction and Operations Plans nor BOEM’s Record of Decision (Atlantic Shores South) include work schedules.

Does EDF have the right to sit on the lease until the financial and regulatory environment is attractive? That is not allowed for oil and gas leases, and rightfully so. (See a related post on Total’s wind lease.)

Meanwhile, ACK for Whales has petitioned EPA Region 1 to reopen and reanalyze the air permits for permits for the New England Wind 1 and 2 projects asserting that:

  • The analysis does account for emissions related to and resulting from blade failures, which would warrant emergency repairs or replacement activities.
  • The decision to group Vineyard Wind 1, New England Wind 1 and New England Wind 2, as a single stationary source is both legally questionable and could have the effect of masking localized emission spikes.
  • Insufficient consideration of cumulative vessel emissions could lead to 1-hour NO₂ exceedances.
  • The emissions from pile driving are not adequately modeled in isolation or synergistically.
Atlantic Shores Order Granting Motion for Voluntary Remand, FINALDownload

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Letter requesting the withdraw of wind project permits

Posted in energy policy, Offshore Wind, tagged , , , , on February 21, 2025| Leave a Comment »

Groups and individuals opposing Atlantic wind projects sent the attached letter to Interior Secretary Doug Bergum asking for the withdraw of wind permits.

The groups cite serious problems with the National Marine Fisheries Service (NMFS) Letters of Authorization (LOA) for Incidental Take of endangered and threatened species. The LOAs authorized cumulative Takes of 548 individuals from a population of around 338.

The groups’ “no list” (project analysis deficiencies):

  • No EIS for the NMFS Incidental Take Authorization
  • No consideration of the impact of harassment in the Biological Opinion including cumulative impacts
  • No harassment authorization for the turbine installation ship
  • No consideration of using suction caissons instead of pile driving
  • No consideration of sediment plumes from ocean currents flowing through wind facilities
  • No assessment of a project’s contribution to the overall effects of multiple wind projects
  • No consideration of continuous operating noise
  • No consideration of physical presence-based harassment
CFACT-Letter-to-Secretary-Burgum-1Download

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Congressman Van Drew on offshore wind Executive Order

Posted in energy policy, Offshore Wind, tagged , , , , on January 14, 2025| Leave a Comment »

This confirms the second-hand information previously posted. The discussions and debate during the wind program review should be lively!

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US Offshore wind: from irrational exuberance to economic reality

Posted in energy policy, Offshore Wind, tagged , , , on August 20, 2024| 1 Comment »

In the wake of last week’s lackluster Atlantic wind lease auction (summarized above), an excellent Renewable Energy World article documents the sharp decline in participation and bidding since the massive February 2022 sale of 6 leases offshore NY and NJ. That sale garnered bids ranging from $285 million to an astounding $1.1 billion, with total high bids of $4.37 billion! The sale was touted as the “nation’s highest grossing competitive energy lease sale in history.” The extravagant bidding, which made little sense then, seems downright irrational now.

Even the December 2022 California offshore lease sale, where development will be dependent on more expensive floating turbines, attracted substantially higher bids for leases (5) smaller than those auctioned last week.

The highly promoted Gulf of Mexico wind auctions were busts with the first sale receiving only one bid for $6.5 million and the second being cancelled due to lack of interest.

Major oil companies like bp and Shell seem to have exited the market for new US offshore wind leases. That leaves Equinor (2/3 Norwegian govt ownership) as the only major oil company pursuing US offshore wind leases.

In just 2 years, cost increases, coastal resident opposition, a troubling blade failure, and developer uncertainty have dramatically changed the outlook for US offshore wind. Nonetheless, the Administration’s wind advocates continue to sing from the same song sheet:

“Today’s lease sale reflects the forward momentum we are seeing to power millions of American homes with clean energy and create good-paying, climate jobs,” said White House National Climate Advisor Ali Zaidi. “With nine commercial-scale projects approved in the last three years and more to go, we are using every available tool to grow the American offshore wind industry as we strengthen the nation’s power grid and tackle the climate crisis.”

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Offshore wind development is rich in structures. Are the financial assurance provisions adequate?

Posted in decommissioning, Offshore Wind, Regulation, tagged , , , , , , on July 10, 2024| 2 Comments »

BOEM’s land rush approach to offshore wind leasing will add up to 1086 turbine towers and 28 offshore substations (OSSs) in the Atlantic just from active projects with approved Records of Decision (RODs). (See the table below.) Another 17 active Atlantic commercial projects have yet to reach the ROD stage. Those projects should increase the total number of structures to >3000. Five more Atlantic wind lease sales are scheduled.

projectturbine towersoffshore substations
Coastal VA Offshore Wind2023
Revolution Wind1002
Sunrise Wind941
Atlantic Shores South200up to 10
Ocean Wind 198up to 3
Vineyard Wind 11002
Empire Wind 1 & 21472
New England Wind (phases 1&2)1505

Per the Construction and Operations Plan (COP) for Vineyard Wind, the topsides for a conventional electrical service platform (ESP) (also known as an offshore substation or OSS) are 45 x 70 x 38 m, which is larger in surface area than a typical 6-pile oil and gas platform (~30 x 30 m), and is comparable in size to a large jackup drilling rig.

The Atlantic Shores plan calls for 10 small, 5 medium, or 4 large OSSs. (Uncertainty regarding the number and types of structures seems rather common in wind COPs.) The large OSSs have topsides that are 90 m by 50 m and rise to 63 m above MLLW. These are large offshore structures whether for wind or oil and gas.

Vineyard Wind ESP

Despite the looming decommissioning obligations, BOEM’s financial assurance requirements have been relaxed to facilitate wind development.

Per BOEM, the “Rule to Streamline and Modernize Offshore Renewable Energy Development” is intended to “make offshore renewable energy development more efficient, [and] save billions of dollars. Unfortunately, the savings associated with relaxed financial assurance requirements translates to increased risk for power customers and taxpayers.

BOEM signaled their intentions on offshore wind (OSW) decommissioning three years ago when they granted a precedent setting financial assurance waiver to Vineyard Wind. Despite compelling concerns raised by commenters, the “streamlining” regulations codified this decision.

No one knows what the financial future will be for wind projects and the responsible companies. Financial assurance should therefore be established when the structures are installed, not years into the future as allowed by the revised regulations. What leverage will BOEM have then?

Nordsee One substation, Germany. Rystad Energy projects 137 new power substations offshore continental Europe this decade, requiring $20 billion in total investment.

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Comparing the operating restrictions for the Right whale (Atlantic wind) and Rice’s whale (Gulf of Mexico oil and gas)

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Offshore Wind, Regulation, tagged , , , , , on September 11, 2023| 2 Comments »

Right whale – Atlantic
Rice’s whale – Gulf of Mexico

Both species are endangered, but the operating restrictions differ significantly:

North Atlantic wind leases: right whale restrictions GoM Lease sale 261: Rice’s whale restrictions
No leasing prohibitions or turbine-free areas have been established despite concerns raised by NOAA (see attached letter)All of the expanded Rice’s whale area is excluded from leasing (i.e. the entire area between the 100 and 400 m isobaths across the GoM)
seasonal 10 kt max speed for vessels > 65′year round 10 kt max for all vessels
vessel separation distance of 500 m for any sighted right whale or unidentified large marine mammalseparation distance of 500 m for any sighted Rice’s whale; if unsure, must assume whale is Rice’s
no visibility restrictions for vessel operationsvessels must avoid transit between dusk and dawn and other times of low visibility
no automatic identification system (AIS) requirementsvessels > 65′ must have AIS functioning at all times
no documentation requirementsmust maintain records to document compliance

Note (below) the proximity of existing and planned wind leases to moderate to high density RIght whale areas compared to the more speculative expanded Rice’s whale area in the central and western GoM that is predicted based on passive acoustic recordings.

ur1-2023-000009_10_17_2022Download

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