Just as the federal government is about to open the Gulf of Mexico to offshore wind projects, the industry is running into trouble, says Maria Galucci of Canary Media (a news outlet favorable to renewables).
“The August 29 [Gulf] auction comes at a deeply ambivalent moment for offshore wind. On the one hand, there’s unprecedented interest in the emerging U.S. industry, which has high potential but so far generates enough electricity to power just 20,000 American homes. On the other hand, developers are facing dire financial conditions that are threatening the viability of several major offshore wind projects.
“Recent supply-chain constraints, rising material costs, higher interest rates and permitting delays have all made it more expensive and less profitable to put towering turbines in coastal waters. Companies are struggling to maintain the financial agreements they signed years ago when market conditions were much more favorable, all while the domestic industry continues to hit new milestones.”
Galucci also says that long-term agreements between wind developers and electricity utilities are being renegotiated or scrapped altogether because of rising construction and financing costs.
Image of offshore wind power is by David Will on Pixabay.