Tag Archives: Ørsted

Ørsted suspends dividend, cuts jobs and exits offshore wind markets

Wind developer says moves needed to create ‘leaner and more efficient company’.

The world’s largest offshore wind developer Ørsted is suspending its dividend, cutting jobs and exiting several markets as the group plots a recovery from a calamitous 12 months.

Ørsted said on Wednesday it would “pause” dividends for 2023-2025, cut as many 800 jobs and retreat from markets in Norway, Spain and Portugal. The Financial Times has the story.

Chief executive Mads Nipper is battling to restore investor confidence after an overly aggressive expansion in US market and higher interest rates left the Danish group facing multibillion dollar impairments.

The measures announced on Wednesday are designed to make Ørsted a “leaner and more efficient company”, Nipper said.

As the group, which is 50.1 per cent owned by the Danish government, tries to stabilise itself, chair Thomas Thune Andersen will step down after almost a decade in the job. Andersen’s exit comes after former finance chief Daniel Lerup and chief operating officer Richard Hunter left in November.

Ørsted’s struggle reflects the pressures facing the wider industry, which investors had championed until higher interest rates, overly ambitious expansion plans and supply chain disruption hit the sector over the past two years.

However, Ørsted has been particularly exposed in part because of its large presence in the still embryonic US market, where it has struggled to get tax credits and complained of onerous requirements for parts to be made locally.

Read the full story here.

Ofgem to investigate claims of wind farms overcharging billpayers millions

Energy regulator Ofgem is investigating the claims that wind farms may have incorrectly added close to £51m to taxpayer bills since 2018.

A Bloomberg report found that 40 out of 121 studied projects overstated their output by ten per cent on average and one-sixth (27) wind farms were found to be overstating by at least 20 per cent. The CityAM has the story.

Ofgem said it was investigating the alleged behaviour and has asked the Energy System Operator (ESO) to look into the matter.

 “Ofgem will work closely with the ESO to consider all the facts and if it finds evidence of egregious action or market abuse, enforcement action will follow,” the spokesperson told City A.M.

“We will continue to work to protect market integrity and the best interests of consumers, as demonstrated by the recent cases we have concluded against generators who charged excessive prices behind transmission constraints.”

The report has reached government ears and parliamentary under-secretary of state for nuclear and networks Andrew Bowie said in response to its findings: “It is completely unacceptable to overcharge for people’s bills.

“British energy generators must operate at the highest standards,” he added.

Bloomberg caveated its report saying that while it is “impossible to determine precisely how much bill payers have had to pay due to such overstatements, but by assuming a similar rate of overestimation during the times that those 40 farms were paid to stop generating, consumers would have overpaid an estimated £51m ($65m) since 2018”.

Read the full story here.

Key Player In Biden’s Offshore Wind Push Withdraws From Deal With Blue State, Blames Inflation

From The Daily Caller

NICK POPE

CONTRIBUTOR

A major offshore wind developer announced Thursday that it withdrew from a deal with a state utility regulator for two offshore wind projects, citing inflation and other economic pressures.

Ørsted, a key corporate player in the Biden administration’s offshore wind agenda, has backed out of the Maryland Public Service Commission’s (MPSC) orders approving the company’s Skipjack 1 and 2 projects off the Maryland coast, the company announced Thursday. The company said that inflationary pressure, high borrowing costs and supply chain problems have combined to make the state’s subsidies economically unviable, but that it is not yet abandoning the projects and will continue to pursue permits, according to a regulatory filing with the MPSC.

“Today’s announcement affirms our commitment to developing value creating projects and represents an opportunity to reposition Skipjack Wind, located in a strategically valuable federal lease area and with a state that’s highly supportive of offshore wind, for future offtake opportunities,” David Hardy, the executive vice president and CEO of region Americas at Ørsted, said in a Thursday statement. “As we explore the best path forward for Skipjack Wind, we anticipate several opportunities and will evaluate each as it becomes available. We’ll continue to advance Skipjack Wind’s development milestones, including its construction and operations plan.”  (RELATED: Blue State Doubles Down On Offshore Wind After 2023’s Massive Failure)

“The statutorily-mandated caps on the residential ratepayer impacts have very little room left,” an MPSC spokesperson told the Daily Caller News Foundation. The state cannot raise those caps in the absence of legislative action, the spokesperson added.

The withdrawal is the latest sign of trouble for Ørsted, which pulled the plug on two major projects off the New Jersey coast in October 2o23 after many of the same underlying factors made those projects untenable. At one point, the company appeared poised to become a major beneficiary of the Inflation Reduction Act (IRA), President Joe Biden’s signature climate bill, but the mounting macroeconomic problems that have beleaguered the economy through his first term have weighed heavily on the company.

“Yesterday’s news from Ørsted is disappointing — the Skipjack project was an important component in advancing Maryland’s clean energy goals,” MPSC Chair Frederick Hoover said of the withdrawal. “However, the Commission remains optimistic about the future of the offshore wind industry in Maryland, and would note that the US Wind project continues to move through the federal approval process.”

The withdrawal is the latest sign of distress for the Biden administration’s offshore wind goals, especially if it turns out to be a precursor for the eventual collapse of the company’s Maryland projects. The White House is aiming for offshore wind to produce enough electricity to power more than 10 million American homes by 2030, but that goal now appears to be firmly out of reach, according to Reuters.

Neither Ørsted nor the White House responded immediately to requests for comment.

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Orsted Will Switch Part Of Hornsea 3 To Round 6

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

20.12.2023 14:46:10 CET | Ørsted A/S | Inside information

Ørsted has taken final investment decision (FID) on the world’s single largest offshore wind farm, Hornsea 3, which will have a capacity of 2.9 GW and is expected to be completed around the end of 2027. Hornsea 3 will be Ørsted’s third gigawatt-scale project in the Hornsea zone following Hornsea 1 (1.2 GW) and Hornsea 2 (1.3 GW), which are already being operated out of Ørsted’s operations and maintenance hub in Grimsby.

The UK is a core market for Ørsted and one of the world’s largest markets for offshore wind, building on strong political support and ambitious build-out targets. Ørsted currently operates 12 offshore wind farms in the UK.

In July 2022, Ørsted was awarded a contract for difference (CfD) for Hornsea 3 at an inflation-indexed strike price of GBP 37.35 per MWh in 2012 prices. The CfD framework permits a reduction of the awarded CfD capacity. Ørsted will use this flexibility to submit a share of Hornsea 3’s capacity into the UK’s upcoming allocation round 6.

Based on a well-established supply chain and synergies with Hornsea 1 and 2, Hornsea 3 has a robust risk-reward profile and a value creation around the bottom end of our targeted lifecycle project return range of 150-300 basis points on top of our weighted average cost of capital. This reflects part of the capacity being awarded a CfD in Allocation Round 6. The possible future addition of Hornsea 4 would create an offshore wind cluster in excess of 7 GW and unlock further cluster synergies.

We have all major contracts for Hornsea 3 in place, including an agreement with Siemens Gamesa for SG 14-236 DD offshore wind turbines, which have a capacity of 14 MW excluding power boost. Most of the capital expenditure for Hornsea 3 was contracted ahead of recent inflationary pressures, securing competitive prices from the supply chain and allowing time to work collaboratively on value creation opportunities. The larger wind turbines and the synergies with Hornsea 1 and 2 lead to lower operating costs than we have seen before in our portfolio.

In short, Orsted want to renege on part of their existing contract, in order to switch that capacity to double the prices in Allocation Round 6.

Given that they have already set up contracts for suppliers to Hornsea 3, they would have incurred huge write offs if they had simply cancelled the whole project.

The government needs to grow a backbone, and tell them they are excluded from Allocation Round 6.

Germany: Green hydrogen project in Heide stopped prematurely

The Heide oil refinery has decided to use green hydrogen. However, the “West Coast 100” electrolysis plant project was prematurely terminated three years after the project began. Raffinerie Heide, Ørsted Germany and Hynamics Germany have announced that they will not build an electrolyser. More than three years ago, they joined forces as “H2 Westküste GmbH” to produce green hydrogen on the premises of the industrial plant in Hemmingstedt. The main reason for the decision against the 30-megawatt plant is the high construction costs, the companies said in a press release (NDR: 17.11.23).

Green hydrogen plant in Heide stopped prematurely – economic profitability not given despite millions in funding

Since 2020, the project has been funded by the German Federal Ministry for Economic Affairs and Energy with 36 million euros as part of the “Living Labs of the Energy Transition” program. About one million euros of this was spent, according to a spokeswoman for H2 Westküste GmbH. The state government supported the project as part of its hydrogen strategy. Despite the subsidies, the economic viability of the plant for green hydrogen production on an industrial scale is not given, according to the investor consortium.

Green hydrogen plant in Heide stopped prematurely – economic profitability not given despite millions in funding

Environment Minister Tobias Goldschmidt (Greens) emphasized that the “large electrolyser project” called “Hyscale 100” is still running and is supported by the state government. Hyscale 100 is more than three times larger than West Coast 100 and is still in the planning stages.

The managing director of the Heide refinery, Roland Kühl, would like to use the knowledge gained from the research project. The goal is to decarbonize the refinery and promote the green hydrogen economy on the West Coast.

Green hydrogen: Project in Heide failed

Ørsted, an offshore wind company from Denmark, also planned to take a stake in the plant in Heide. However, Jörg Kubitza, Managing Director of Germany, emphasized that such projects depend on their economic viability, which is not the case in this case. The costs must be right and a market must be created, which is not the case in this case. Hynamics Germany, a subsidiary of Electricite De France, was the third partner in the consortium.

Stadtwerke Heide planned to participate in Westküste 100 as a regional energy supplier. Their focus was on the “Green Heating” sub-project, in which green hydrogen was to be mixed with natural gas. This project has now also been discontinued due to the demolition of the electrolysis plant.

Andreas Hein, Chairman of the Supervisory Board of Stadtwerke Heide, was disappointed and criticized the lack of a legal framework for such projects and the fact that little progress had been made on the topic of green hydrogen than three years ago.

Originally published by Blackout News.

Germany To Bail Out Siemens’ Struggling Wind Turbine Division

Siemens Energy, facing significant losses, is in talks for up to 15 billion euros in guarantees, with the German state covering 80% of the initial funding.

Siemens AG shares have plummeted over 70% since mid-June, with the company abandoning its 2023 profit outlook due to challenges in its wind turbine unit.

The UK government is set to offer higher subsidies for offshore wind projects, following a previous auction where developers backed out due to low pricing, indicating growing financial strains in the renewable energy sector.

From OilPrice.com

By ZeroHedge

Reuters reports the German government, Siemens AG, and other parties will provide billions of euros in project-related guarantees to support Siemens AG’s struggling wind turbine division. This financial assistance comes just weeks after the company warned about mounting losses amid a meltdown across wind and solar industries.

Three people familiar with the talks said that Siemens Energy’s top shareholder, Siemens AG, with a 25.1% stake, is prepared to provide some guarantees. Details are still scant, and nothing has been decided, as an agreement needs to be formally drawn up and supported by all stakeholders.

Last month, Reuters said Siemens Energy was discussing state guarantees with the German government. 

Here’s more on the report:

As a result, Siemens Energy fears it will struggle to secure guarantees from banks, and has approached the government and Siemens to obtain a guarantee framework, business news weekly WirtschaftsWoche said.

The weekly, which first reported the talks along with Spiegel magazine, said Siemens Energy is seeking up to 15 billion euros in guarantees.

The German state would assume liability for 80% of an initial 10 billion euro funding tranche, while banks would be liable for the remaining 20%, WirtschaftsWoche said.

Siemens AG spokesperson said the company remained in “very constructive talks to define the best possible solution in the interests of all parties involved.”

Siemens Energy shares in Germany have crashed more than 70% since mid-June as it has abandoned its 2023 profit outlook after a review of its wind turbine unit revealed a billion euro problem. Shares were up 5% on Reuters’ report today. 

Meanwhile, a financial crisis continues to accelerate across the wind industry, with the world’s largest offshore wind farm developer, Ørsted, pulling out of major US projects due to soaring inflation costs and a high-rate environment. And the renewable energy meltdown in wind has spread to solar as several solar power company stocks crashed on sliding demand. 

And so, hot on the heels of Germany’s bailout of Siemens, Bloomberg reports that the UK government is preparing to offer significantly higher subsidies for new offshore wind farms to get the country’s clean-power strategy back on track after developers shunned a previous auction, because the price was too low for offshore wind to be viable.

Denmark’s Orsted A/S, the world’s largest offshore wind builder, will decide by December whether to proceed with a UK development, while Sweden’s Vattenfall AB shelved a giant project off the English coast earlier this year in response to soaring costs.

While higher subsidies in the next auction round, known as AR6, may well reinvigorate offshore wind development, it will likely feed through to increased electricity costs for consumers still burdened with sky-high bills in the wake of last year’s energy crisis.

The energy transition to renewables across the Western world is cracking. Remember, the Biden Administration’s Inflation Reduction Act was all about ‘sustainable’ wind power… Time for another bailout? 

Offshore U.S. Wind: Childish Energy Policy

BP’s top renewables executive said last week that the U.S. offshore wind industry is “fundamentally broken.” If anything, the Big Wind industry appears to be in even deeper financial distress.

From Master Resource

By Robert Bradley Jr.

“The Biden administration’s preposterous plan to establish 30,000 megawatts of nameplate Offshore Wind capacity by 2030 was always a pipedream. It’s what you get when you put the children in charge.” ( – Joseph Toomey, below)

Talented amateurs are often better than the ‘professionals’ when it comes to dissecting U.S. energy policy. Or maybe I have it reversed. The pros are those in the trenches and the amateurs are the ones on high.

So let’s call Joseph Toomey, independent management consultant, an expert. Here is his recent post about the much-in-the-news problems of the offshore wind industry under Biden Energy Policy.

Not long ago, this thread reiterated a resolute, long-standing belief that Offshore Wind is neither practical nor affordable, even in high-tax Democrat-governed Blue States of the U.S. Northeast and Middle Atlantic regions. Four proposed Offshore Wind projects had collapsed into miserable failure after project sponsors demanded increased public subsidies of as much as 65% above the already wildly-inflated feed-in prices they had previously been promised by New York State.

Just this week, it was New Jersey’s turn to be left looking like adolescents for pretending that Offshore Wind could ever become a viable option for supplying the electricity needs of that state’s ratepayers at affordable levels.

Note the delicious fury from New Jersey’s Governor Phil Murphy who proclaimed that:

“Today’s decision by Ørsted to abandon its commitments to New Jersey is outrageous and calls into question the company’s credibility and competence.”

It was Murphy himself whose competence had been called into question by backing these wildly infeasible ideas.

If this sounds a little too much like a “Spike the Football” moment for our valuable readership, you have my deepest condolences. I just fell off my armchair laughing at the hilarious incompetence of our renewable energy-promoting political class. The day can’t come soon enough when real adults return into leadership positions to pull humanity back from the brink of extinction events that actually exist, as recent troubling global developments adequately demonstrate.
 
The Biden administration’s preposterous plan to establish 30,000 megawatts of nameplate Offshore Wind capacity by 2030 was always a pipedream. It’s what you get when you put the children in charge.

The badly-needed adult supervision delivered by marketplace realities has now demonstrated to sentient humans that there was never a chance in the whole universe that Biden’s absurd plan could ever be realized.

Activate to view larger image,

Comments on Post

Some of the many comments that followed either confirmed the obvious or suggested the way forward.

The obvious from Robert Borlick: “Notice how many days with no output? This is why wind needs to be backed up with dependable generators that can be ramped up to serve the load.”

The way forward from Ken Urkosky: “All this subsidy funding should go to building infrastructure capable of withstanding the harsher weather events we’re told to expect! That would be much more effective in reducing the impacts of climate change vs trying to control our Earth’s climate.”

And Borlick, an important voice in the electricity debate, has had enough with offshore wind:

I strongly opposed the OSW projects that were approved by the Maryland Public Service Commission in 2017 and again in 2021. Both awards violated Maryland law by not conducting valid cost-benefit analyses, which would have eliminated all but one project (US Wind). I tried to persuade the Maryland People’s Counsel to sue the MPSC but they wimped out – both times.

Now the crazies in the Maryland legislature want to approve even more OSW but this time they want to hide the huge subsidies by paying them out of general tax revenues, instead of through the more visible electricity rate increases.

My hope is that cost increases will kill the Maryland projects just as they did the New Jersey projects.

The last word goes to engineer Greg Gardner: “BUT, it made a lot of congresspersons rich… that was the real plan.”

Ørsted Abandons New Jersey Wind Projects

Offshore wind developer Ørsted said it is pulling out of its Ocean Wind 1 and Ocean Wind 2 projects off New Jersey, citing escalated financial difficulties and supply chain issues. 

“Ørsted has decided to cease the development of Ocean Wind 1 and 2,” said the company in its statement. The Ocean Wind 1 project would have been located about 15 miles off the shore of Atlantic City, and the Ocean Wind 2 farm would have been adjacent to it.

From Watts Up With That?

Ørsted, a major player in the offshore wind development sector, has decided to pull the plug on its Ocean Wind 1 and Ocean Wind 2 projects off the coast of New Jersey. Citing

“escalated financial difficulties and supply chain issues,”

https://www.nationalfisherman.com/mid-atlantic/-rsted-gives-up-on-new-jersey-wind-projects

Ørsted’s decision brings to light the tumultuous waters that renewable energy projects are now starting to regularly encounter.

“Macroeconomic factors have changed dramatically over a short period of time, with high inflation, rising interest rates, and supply chain bottlenecks impacting our long-term capital investments,”

said David Hardy, group executive vice president and CEO Americas at Ørsted. This statement reflects the vulnerability of such grandiose renewable projects to economic fluctuations and logistical nightmares.

The cancellation of these projects is not just a setback for Ørsted but also dents the ambitious renewable energy goals of the United States. It came shortly after the Biden administration announced the final approval of the Coastal Virginia Offshore Wind project, which was touted as a significant milestone in the U.S. renewable energy landscape.

Local officials and communities in New Jersey, who had been at loggerheads with Ørsted and other state and federal agencies, welcomed this decision. They had been voicing their concerns and opposition against the potential impacts of the Ocean Wind 1 project.

“This is a great day for the people and businesses of Cape May County,”

said Len Desiderio, director of the Cape May County Board of Commissioners, reflecting the relief and vindication felt by the local communities.

Despite this setback, Ørsted continues to express its commitment to the U.S. renewable energy market.

“We remain committed to the U.S. renewable energy market, building clean power that will create jobs across technologies and states from the Northeast to Texas,”

Hardy said. However, the abandonment of the New Jersey projects raises questions about the feasibility and practicality of such commitments in the face of economic and logistical uncertainties.

Ørsted’s decision to abandon its wind projects off New Jersey is a stark reminder of the unpredictable and challenging nature of renewable energy projects. It underscores the need for a more realistic and pragmatic approach towards planning and executing all energy projects, putting engineering and economics ahead of political dictates, taking into consideration the various economic, logistical, and community-related factors that can impact their success.

Source: https://www.nationalfisherman.com/mid-atlantic/-rsted-gives-up-on-new-jersey-wind-projects

Wind-power Investors abandon Siemens Energy — another shocking 37% fall, and it’s not alone

Shares of Siemens Energy crashed 37% in Germany. The German company said, “The Executive Board is evaluating various measures to strengthen the balance sheet of Siemens Energy and is in preliminary talks with different stakeholders, including banking partners and the German government.

From JoNova

By Jo Nova

Marketing fantasies from the Boom Times of Wind. Who were they kidding? | Siemens Gamesa

It’s dire. After suffering a 36% fall in June due to unexpectedly bad maintenance bills, Siemens Energy has lost another 37% on Thursday as it revealed orders and revenue would be even lower than the current subdued expectations. The share that sold for 24 euro in May is now selling for 7.

Frankfurt Borse

Things are so bad Olaf Scholz, Chancellor of Germany has even said Siemens Energy is “very important”.  Apparently talks are “intensive”, which presumably means the company is on death’s door and the German government is being asked to help save it.

And so we arrive at a point where a company selling products that depend on government subsidies is now asking to be subsidized itself. And the whole green industry depended on government pumped “science” and artificially low interest rates to exist in the first place. Like a pyramid scheme skiing on a two ponzi scams, sooner or later it has to collapse.

Tyler Durden, ZeroHedge

Siemens Energy Shares Crash 37% As Renewable Bust Sparks ‘Green Panic’

Siemens Energy shares in Germany crashed on Thursday after the company warned its wind turbine business is grappling with quality issues and offshore ramp-up challenges. The company said it’s evaluating various measures to strengthen its balance sheet and is discussing state guarantees with the German government. This comes as a financial crisis in offshore wind energy is brewing.

The word is Siemens Energy is asking for up to 15 billion euros in guarantees.

UPDATE: Siemens Energy is a spin off from the larger separate giant Siemens which has a market cap of  100b Euro and 300,000 employees. The smaller energy division has 90,000 employees and a market cap of only 7b Euro now, but it was 30b a few years ago.  Siemens still owns 25% of the spin off energy division.

The whole wind industry is down

Even the Guardian is asking if something is is wrong in the whole wind industry, albeit only as means of paving the way to ask for bigger subsidies.

The windmill business has not recovered from the Siemen’s June shock that bigger turbines was not always better, and ominously something was wrong which would cost an obscene amount to fix. It didn’t bode well that the problem was narrowed down to either the rotor, the bearings “or the design”– which covered pretty much everything. By August Siemens Energy announced a jaw dropping annual loss of €4.5 billion.

Confidence is gone. In July the Swedish energy giant Vattenfall stopped work on the offshore wind farm plans off Norfolk.  In August the Danish wind firm Ørsted lost 25% after it revealed it may have to write off ” the value of its US portfolio by nearly £2bn.”  The share market was so skittish it wiped off nearly £7bn in value that week. Overall the Ørsted share price has dropped by two-thirds from its peak in early 2021.

The latest headlines on Orsted, say it all:

Orsted: Sunrise Wind Project Likely to Be Ditched After Failure to Get Extra Subsidies; Shares Cheap

A week ago Deutsche Bank  “slashed its 12-month share price forecast for Danish energy giant Ørsted by 36%, citing supplier delays, lower tax credits and rising rates.” — CNBC

Things haven’t exactly been good for Vestas either:

Vestas is also down 30% this year.

Frankfurt Borse

Despite massive subsidies, bountiful good intentions and Draconian regulations on fossil fuel competitors green energy doesn’t work and Net Zero is pure fantasy.

This is the rotor of the newest, largest offshore Siemens SG 14MW . Look how big these machines are.

It will theoretically end up propped up on a stalk 140 meters high over the ocean waves, or something like that. The blades are 115m long. Imagine fixing it.

h/t StJohnofGrafton

‘Green’ Energy Nirvana Collides With Brutal Reality: Wind & Solar Are Pointless

From STOP THESE THINGS

The world runs on luck and credit. The wind and solar ‘industries’ are running out of both. What might have sounded a little hopeful 20 years ago, sounds utterly ridiculous today. Talk about an all-wind and sun-powered future these days smacks of a mixture of delusion and desperation.

Wind turbine manufacturers are bleeding cash, with their mounting losses already in the multiple $billions. Dozens of grand offshore wind projects are being scrapped, notwithstanding last-ditch attempts by governments to salvage them.

And energy consumers have worked out the promised ‘green’ energy Nirvana is a cruel fantasy put together by cynical, profiteering elites.

As Jonathan Lesser details in this comprehensive essay, hubris and overreach are fast being overtaken by a brutal reality, based on the fact that wind and solar will never amount to meaningful power generation sources.

Why wind and solar power are running out of juice
New York Post
Jonathan Lesser
2 September 2023

Fire breaks out at Volusia County solar farm

Green energy and the push to electrify everything have been in the news recently but for all the wrong reasons.

Instead of the green energy nirvana politicians and green energy advocates have promised, economic and physical reality has begun to set in.

Start with the economic realities.

Wind turbine manufacturers like Siemens and General Electric have reported huge losses for the first half of this year, almost $5 billion for the former and $1 billion for the latter.

Among other problems, turbine quality control has suffered, forcing manufacturers such as Siemens and Vestas to incur costly warranty repairs.

In Europe, offshore wind output has been less than promised, while operating costs have been much higher than advertised.

Offshore wind developers in Europe and the US are canceling projects because of higher materials and construction costs.

In Massachusetts, Avangrid, the developer of the 1,200 MW Commonwealth Wind project paid $48 million to get out of its existing contract to sell power to ratepayers.

That way, the company can rebid the project next year at an even higher price.

Close by, the developers of the 1,200 MW SouthCoast Wind Project off Martha’s Vineyard will pay about $60 million to exit their existing contract.

Rhode Island Energy, the state’s main electric utility, recently rejected the second Revolution Wind Project because the contract price was too high.

And Ørsted, the Danish government-owned company that is developing the Southfork Wind and Sunrise Wind projects off Long Island — as well as the Ocean Wind project off the New Jersey coast — last week announced that, without additional subsidies and higher contract prices, it will have to write-off billions of dollars in potential losses.

The result: Even though Siemens Energy CEO Christian Bruch insists that “energy transition without wind energy does not work,” 2022 saw 16% less new wind-power capacity than in 2021, according to the American Clean Power Association. 

In New Jersey, the legislature passed a law in July, which is likely unconstitutional, to bail out Ørsted.

The legislation will award the company with several billion dollars of investment tax credits that were supposed to go to consumers.

Back on dry land, opposition to siting land-gobbling wind and solar projects continues to grow.

Local governments in Iowa, Illinois, and Ohio have all rejected or restricted projects.

Rural communities, it seems, do not want to host massive turbine farms  — nor the high-voltage transmission lines needed to deliver electricity to power-hungry cities.

Then there are electric vehicles.

Ford, which has bet heavily on its electric Lightning pickup and Mustang and received a $9.2 billion government-subsidized loan in January, revealed that it has lost $60,000 for every EV it sold in the first half of this year.

Rivian, another EV company, managed to reduce its losses per EV to around $33,000, a big improvement over the $67,000 loss per EV in the first quarter of the year.

Proterra, a Bay Area-based manufacturer of electric buses and batteries that had a $10 million loan forgiven by the Biden Administration, just filed for bankruptcy.

Like the wizard in The Wizard of Oz, alternative energy proponents claim these are just temporary little potholes on the road to economic and climate nirvana — all of which can be filled with more money through renegotiated power purchase contracts and more zero-emissions mandates.   

Alternative energy madness – and that’s what it is – has had its biggest impact in California.

But New York and New Jersey have adopted most of that state’s mandates.

Sales of new internal combustion vehicles will be banned beginning in 2035 in the states.  All of the electricity sold to retail consumers will have to be “zero-emissions.”

Homeowners and building owners will be forced to replace gas- and oil-burning space and water heaters with electric heat pumps.

And, gas stoves will be regulated out of existence.

New York also will soon implement another California import: a carbon “cap-and-invest” program, which will impose a tax on fossil fuels sold by wholesalers and utilities.

The billions of dollars collected each year will provide a green slush fund, allowing the governor and legislators to hand out money to their politically favored cronies, as has so often been the case in the past.

Washington State began its “cap-and-invest” program in January of this year.

Modeled after California’s, Governor Jay Inslee promised the program would have “minimal impact, if any.  We are talking about pennies.”

Instead, the program has raised gasoline prices – almost 50 cents per gallon so far this year.  Washington State now claims the honor of having the highest gasoline prices in the nation:  In Seattle, for example, the average price of regular gasoline is over $5 per gallon.

Of course, the entire point of the program was to raise gasoline and fossil fuel prices to encourage consumers to switch to electric vehicles, mass transit, electric heat pumps, and so forth.

But politics being what it is, Governor Inslee, along with environmentalists and legislative proponents, now blames greedy oil companies for the price increases.

‘We won’t stand for’ corporate greed,” the Governor said at a July 20, 2023, press conference.

Once New York’s cap-and-invest program starts, probably next year, you can expect a similar outcome: higher gasoline and diesel prices, higher prices for natural gas and fuel oil used to heat homes and apartment buildings, and endless political demagoguery denouncing it all.

As the push toward electric-everything powered by green energy barrels along, proponents also refuse to confront basic physical realities.

Electricity accounts for just one-sixth of all energy use.

The rest is fossil fuels consumed for transportation, space and water heating, and manufacturing.

Convert everything to electricity and electricity consumption will increase.  A lot.

According to the New York Climate Action Committee’s Final Scoping Plan, New York will meet that increased demand by building almost 15,000 MW of offshore wind, like the Southfork Wind and Sunrise Wind projects, and over 40,000 MW of solar panels. (By comparison, the emissions-free Indian Point Nuclear Plant, which former Governor Cuomo forced to close, had a capacity of just over 1,000 MW.)

Because the wind doesn’t always blow and the sun doesn’t always shine, keeping the lights on will require far more backup resources.

This “reserve margin” – basically, the amount of generating capacity available to step in and meet electric demand – will need to increase from the current 20% to over 100%.

In other words, for every MW of generating capacity in 2040, there will have to be an equal amount or more in reserve.

That’s like having to buy a second car and keep it idling all the time in case the first one won’t start.

The Scoping Plan claims this will be accomplished by building over 20,000 MW of so-called “dispatchable emissions-free generating resources” (DEFRs) and installing over 12,000 MW of battery storage.

Those claims are fantasy.

Start with DEFRs, which are generators that burn pure hydrogen manufactured from surplus wind and solar power.

They have yet to be invented (we repeat – they do not yet exist). Nor do any large-scale commercial plants to manufacture green hydrogen exist either.

Hydrogen cannot be transported in existing natural gas pipelines.

An entirely new infrastructure will need to be built.

Assuming a new technology will be invented by whatever date politicians decree is foolish.

That’s not how technology works

Just ask everyone working on commercial fusion power, which has been just 30 years off for the last 50 years.

As for battery storage, 12,000 MW will provide at most 48,000 megawatt-hours of actual electricity.

That may sound like a lot but based on the New York Independent System Operator’s (NYISO) most recent forecast, on a windless and cold winter evening in 2040, it would keep the lights on for only one hour.

The materials requirements for batteries also are staggering, which is one reason why replacing existing internal combustion cars and trucks will be impossible. 

Batteries require large quantities of cobalt, much of which is now mined in the Congo using child and slave labor.

They also require lots of graphite, most of which comes from China – the same with the rare minerals needed for wind turbines and solar panels.

Ultimately, nothing New York does will have any measurable impact on world climate because the state’s carbon emissions are minuscule compared to the 35 billion metric tons of total global emissions.

As long as China, which accounts for almost one-third of world energy-related carbon emissions, India, and other developing nations focus policies on economic growth, rather than cutting emissions, New York’s efforts will have no environmental value.

Nevertheless, if politicians and environmentalists were serious about zero-emissions goals, they would abandon the electrification mandates, and abandon reliance on wind, solar, battery storage, DEFRs, green hydrogen, and other unrealistic and unreliable energy sources.

Instead, they would embrace the one existing technology that dare not speak its name: nuclear power.

Unlike wind and solar, nuclear plants run all the time.

New, small modular reactors will offer greater safety, lower costs, and easy scalability to meet increased electricity demand.

Storing spent fuel is a political issue, not a technological one, for which the best solution is to recycle and reuse it, as France has done for the last half-century without incident.

The country is also developing a permanent storage site for nuclear waste that can no longer be reprocessed.

The economist Herb Stein once quipped that anything that cannot go on forever, won’t.

That’s true of New York’s current alternative energy madness.

It won’t save the world, but it will grind down the state’s economy and its residents until the folly is too great to ignore.
New York Post