US offshore wind slammed by runaway costs
The U.S. offshore wind industry is facing major hurdles due to inflation, despite the Inflation Reduction Act (IRA). Over 10 gigawatts of offshore wind projects on the East Coast are at risk as costs rise. Orsted, a Danish wind giant, may abandon projects without additional government aid, while other developers are paying penalties to exit contracts. The IRA, which provides incentives for clean energy projects, is being outpaced by inflation and borrowing costs. The law's focus on U.S.-made parts has also driven up prices before the domestic supply chain can catch up.
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FAQ - US Offshore Wind
Q: What challenges are US offshore wind projects facing?
A: US offshore wind projects are facing challenges in the form of increasing development costs, difficulties in securing permits, regulatory uncertainty, and cost inflation. These challenges are slowing down deployment and threatening the buildout of offshore wind projects.
Q: How are rising costs impacting US offshore wind?
A: Rising costs are impacting US offshore wind development, with increasing development costs threatening the viability of several East Coast projects. The high capital costs associated with offshore wind projects are a significant challenge in the industry.
Q: What is the state of the US offshore wind industry?
A: The US offshore wind industry is still in its early stages and facing various obstacles. Challenges such as rising costs, regulatory uncertainty, permitting issues, and financial challenges are currently impacting the industry.
Q: What efforts are being made to address offshore wind challenges?
A: Efforts are being made to address offshore wind challenges. The US Department of Energy's Wind Energy Technologies Office has released a $28 million funding opportunity to address key deployment challenges and lower costs. Additionally, initiatives like the American-Made FLoating Offshore Wind ReadINess (FLOWIN) Prize aim to unlock the potential of cost-effective floating offshore wind.
Q: Are there any advantages to US offshore wind?
A: Yes, there are advantages to US offshore wind. It is a source of clean and renewable energy and has the potential to create jobs in the wind industry. Additionally, wind energy's cost competitiveness continues to improve, making it an attractive energy source.
For more information on US offshore wind challenges, you can refer to the following sources:
- "US offshore wind development challenges coming into focus as projects mature" - Provides insights into the increasing offshore wind development costs.
- "US offshore wind's growing pains: Permitting and cost inflation" - Discusses the challenges in securing permits and cost inflation that are constraining US offshore wind deployment.
- "Offshore Wind: Today's Challenges and Tomorrow's Opportunities" - Provides information on the obstacles and challenges faced by the US offshore wind industry.
- "Soaring Costs Threaten U.S. Offshore-Wind Buildout - WSJ" - Highlights the financial challenges faced by offshore wind developers in the US.
- "Why the Rise in Offshore Wind Costs is Temporary - Climate Nexus" - Discusses the recent challenges in US offshore wind costs and the temporary nature of the rise.