Jul 30, 2024
In the drive to generate more renewable power and simultaneously reduce dependence on fossil fuels, offshore wind projects have begun popping up all over the world.
In the drive to generate more renewable power and simultaneously reduce dependence on fossil fuels, offshore wind projects have begun popping up all over the world. Here in the U.S., we have seen a number of such projects in recent years. But all is not well. According to the Energy Information Administration (EIA) future offshore wind capacity has been reduced by project cancellations.
Their July 2024 report specifically cited two projects on New Jersey that recently got the ax. Orsted's Ocean Wind 1 and 2 projects have been canceled due to a combination of supply chain disruptions, higher interest rates, and inflationary pressure. The cancellations represent a loss of 4,800 MW of offshore wind capacity.
A Challenging Prospect
Needless to say, developing offshore wind capacity is a challenging prospect even under ideal conditions. Among all renewable energy options, offshore wind presents some of the most unique challenges companies face. A very complex ocean environment is the starting point.
Offshore wind developers must account for ever-changing wind patterns and the influence waves exert on offshore structures. They must pay attention to the dynamic relationship between atmosphere and ocean. All the natural challenges they face must be addressed while staying true to the sustainability principle of minimal environmental harm.
Additional challenges include:
Limited data to inform wind energy models.
Environmental impacts related to building and maintaining wind farms.
Connecting wind farms to an onshore grid.
Harsh marine conditions capable of damaging turbines.
Building wind farms under deep water conditions.
Noise and visual pollution affecting coastal communities.
The technical aspects of building larger and better turbines.
All these challenges are continually overshadowed by economic uncertainties. At a time when inflation continues to be a chief concern across nearly every industry, wind power producers need to watch every penny. They cannot afford to overspend on either developing new projects or maintaining existing offshore wind farms.
Projects Currently Under Construction
Despite the loss of the two New Jersey projects, the EIA reports that a number of other projects are currently in the construction phase. Their July 2024 report mentioned the South Fork project off the coast of Long Island. Another project is the Vineyard Wind 1 project at Martha's Vineyard, Massachusetts. Ten of the project's sixty-two turbines are already in place.
The EIA also says that additional projects are now in the planning stages. They cited several with a combined capacity of nearly 3,000 MW. Suffice it to say that the two New Jersey cancellations do not spell doom for the entire industry. Perhaps we will have less offshore wind capacity than planned over the next few years. But as the economy rebounds, we expect to see even more projects introduced.
One Piece of the Puzzle
Offshore wind is just one piece of the renewable energy puzzle. It is a valuable piece in the sense that ocean environments produce a nearly constant supply of wind. The ocean is one of the few places on Earth where the wind almost never ceases. And yet, building offshore is financially, legally, and environmentally difficult.
As the industry works to continue expanding offshore wind, onshore wind remains a viable option as well. Likewise for solar voltaic, solar thermal, and other technologies. Despite the setbacks in offshore wind capacity, now is not the time to take a less aggressive approach to renewable energy. Now is the time to continue pressing forward with the technologies that could very well free us from fossil fuel dependence within the next several decades. At Commonwealth Associates, we plan to be part of that future.
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