Despite strong support from the State, California’s offshore wind sector faces major challenges:
- Deepwater technology: California offshore wind development is totally dependent on expensive and still unproven floating turbine technology. Norway, once a world leader in floating wind, has lost enthusiasm and is now requiring floating projects to be ‘quality-assured.’
- Infrastructure: Major port upgrades, new transmission lines to bring power ashore, and specialized vessels are required. The supply chain is immature.
- Costs: High capital costs plus storage costs (e.g. batteries) for reliability.
- Environmental and stakeholder issues: Opposition to industrializing the coast.
- Worldwide struggles for the wind industry.
Two of the three Central Coast wind lessees (diagram below) have agreed to lease buyback deals. A lease cancellation letter is attached. The State is challenging the buyback agreements, and is thus in the difficult position of opposing deals that the wind developers voluntarily agreed to and believe are in their best interest. Does the State lose regardless of the outcome of their challenge?
The third Central Coast lessee, Equinor, is curtailing wind investments and has no plans to pursue new offshore wind projects in the US. A buyback deal with Equinor would be complicated by the company’s Empire Wind commitments, and is probably unnecessary given that Equinor has taken itself out of the game.
The two Northern California leases are still active, but the focus has been on regional planning. Funding for necessary infrastructure projects is uncertain and any wind lease development is far in the future.
Bud's Offshore Energy (BOE) 