Not an offshore wind project. Just a cool picture from Germany last week.

by Steve Haner

In recent days several proposed offshore wind projects, which unlike Virginia’s are not guaranteed by captive ratepayers, are showing cracks in their pylons.

Multinational developer Avangrid recently told Massachusetts regulators that its proposed 1.2 gigawatt Commonwealth Wind project is no longer economically viable. It seems to be seeking to renegotiate the power purchase agreement for more money because the electricity price it promised in the contract is being eroded by rising costs and interest rates.

Then the developer of a smaller Massachusetts project, 400 megawatt Mayflower Wind, made a similar announcement. An EE News Energy Wire story on both can be found here and included this:

Avangrid’s warning — echoed in part days later by Mayflower Wind, the developer of the state’s other upcoming offshore wind project — is the strongest signal yet that a chilling trend on renewable energy projects may migrate into the offshore wind sector.

That was before Monday brought another signal. New Jersey’s Public Service Enterprise Group (PSEG) announced it is considering pulling out its stake in the 1.1 gigawatt Ocean Wind 1 project. In that case, the utility does have a 25% equity stake in the project. Bloomberg reports on that here.

Higher prices and ongoing supply chain constraints are straining the project’s finances, the project’s lawyers said in an Oct. 20 filing.

The Biden Administration’s so-called Inflation Reduction Act shored up already fat subsidies for the industry, but with several conditions. There is a clear preference for domestic-manufactured content, for example, which might be of no value to these overseas-based contractors. Labor costs will now be dictated by unions. The full impact of all that is still unclear.

Here in Virginia, of course, Dominion Energy Virginia’s ratepayers can simply expect to pay more for its planned Coastal Virginia Offshore Wind project. That one project (2.6 gigawatt) is about the size of the three mentioned above combined, and of course the utility plans a second wave just as large.

This is why the discussion of risk is central to this debate. In private projects financed with power purchase agreements, the developer’s investors carry most of the risk. In Dominion’s projects, ratepayers do.

A proposed agreement pending in front of the State Corporation Commission seems to be premised on an expectation that the construction cost will rise to at least $11.3 billion from the previous $9.8 billion, with $1 billion of that to be repaid to the utility by its customers over time (and with annual profit.) The agreement mentions the possibility of a price tag up to $13.7 billion. Those numbers were not chosen at random.

An additional $1 billion from ratepayers amortized over decades will substantially increase the projected bill impact of the project, which began to show up on Dominion’s monthly bills in September. (Look on your bill for Rider OSW). The cost numbers reported earlier will be scrambled, and a new analysis may not appear before the SCC decides.

Avangrid, which has the Spanish firm Iberdrola as its majority owner, is also developer of the proposed Kitty Hawk project. It will be built off North Carolina’s Outer Banks, but the power cables are going to come ashore in Virginia Beach to connect with the transmission grid.

Defenders of the proposed settlement have claimed privately that it is a consumer victory to put Dominion on the hook for some (one-third) of the cost overruns up to $11.3 billion, and all of the cost overruns beyond that point.  Again, the unspoken premise is that cost overruns are coming. They also claim the SCC will have full power to stop the project if the costs explode.

Yes, but how likely is that? Once ten or eleven billion has been spent, will the SCC impose that sunk and stranded cost on ratepayers with the prospect of no electricity production or renewable energy credit sales? In another realm, does the Navy cancel ships when they are 80% built and costs rise? Not often.

The original condition imposed by the SCC, holding Dominion responsible for any marginal energy costs if the project fails to produce power at 42% capacity, did more for consumers. It also apparently imposed so much risk on the company that it was threatening to drop out, just like those other developers in other states.

Those other companies are taking steps to protect their shareholders. Under the original SCC condition, Dominion might have done the same. Absent that, it doesn’t have to.

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76 responses to “East Coast Ocean Wind Projects Faltering”

  1. “. . .no longer economically viable.”– WOW! Who would have thought? Oh yeah…. i remember who was warning about just this from the beginning….

  2. James Kiser Avatar
    James Kiser

    The interesting thing about electrical batteries is that once they drop to 20% they won’t power a load. Any one who has used a battery powered tool knows what I am talking about.

    1. how_it_works Avatar

      For longest life, lithium-ion batteries shouldn’t be discharged below a certain point, which may be 20%. I don’t recall. Not gonna look it up.

      1. Nancy Naive Avatar
        Nancy Naive

        Yes, 80% discharge. Of course, if you stick to less, say 60%, you get far many more cycles.

        One lithium-ion battery manufacturer, Renogy, claims that at 50% discharge you will get 10,000 cycles. Renogy also designed their batteries with load and charge balancing at the cell level communicating on the power lines so no additional wiring required.

    2. Nancy Naive Avatar
      Nancy Naive

      Well, most of know that we recharge it. No wonder you’re spending so much on batteries.

      Typical lead-acid can be discharged to only 50%, lithium to 80%, and have on the order of 300 and 3000 cycles, respectively. Lithium also weighs about 1/3 of a lead-acid.

  3. Dominion’s back is against the wall. The company is investing $500 million at its own risk to build the Charybdis, an offshore wind-turbine installation ship. Dominion was expecting that numerous East Coast offshore wind projects would allow it to pay off the cost of building the ship. Now Steve informs us some of those wind projects are in jeopardy. If Dominion’s own offshore wind project falls apart, Charybdis could be a financial disaster. So, there’s more to Dominion’s political calculus than just reaping profits from the offshore wind project. It has a $500 million investment, for which shareholders are 100% at risk, to salvage.

    This could turn into a repeat of the Atlantic Coast Pipeline imbroglio, which cost Dominion hundreds of millions of dollars. If the company has to take a giant write-off for Charydis, senior management will have a lot of explaining to do.

    1. These problems could be solved by a federal carbon fee. This is actually a “conservative” solution, as that word used to be understood…

      “Why Put a Price on Carbon? Because it’s the single most powerful tool available to reduce America’s carbon pollution.”

      1. f/k/a_tmtfairfax Avatar

        That’s the bottom line – get ahold of other people’s money. It’s the only game in town in Washington, D.C. and every state capital.

        How much more tax revenue would the feds and states have if every entity that lobbies, endorses candidates or positions on issues, or tries to influence public opinion were subject to state and federal income taxes? The proceeds could go to projects that help reduce energy consumption in housing, for example.

        1. This is the fossil fuel industry’s angle. They will try to paint the carbon fee as some sort of slush fund, and even lobby for the funds to be distributed to fringe groups. This is how they were able to kill the idea in Washington state, and there is every indication they’ll try to run the same play again, should it ever appear close to passing.

          The way to stop their meddling is to keep the plan very simple. Don’t allow them to divert the funds into “projects that help reduce energy consumption”. The money needs to either go back to the public in equal shares or pay for carbon sequestration at the same price per tonne.

          “A group of oil and gas companies pumped tens of millions of dollars into the campaign to defeat I-1631 [Washington State’s carbon fee], far dwarfing the money raised in support. But, cleverly, that campaign did not center on denying the science of climate change like companies have in years past. Instead, it poked holes in the specifics of the carbon tax proposal and played into the skepticism of how government might distribute the tax revenue.”

          1. DJRippert Avatar

            “The money needs to either go back to the public in equal shares or pay for carbon sequestration at the same price per tonne.”

            This perhaps the most naive sentence ever written on this blog.

            Anytime the government institutes a skim the money skimmed NEVER goes back to the people from whom it was skimmed.

            Our government, at all levels, is a massive deceit machine. I can still remember the government’s promise that the tolls on the Dulles Toll Road would be discontinued once the costs for the road were recovered. A complete lie. Senile Joe Biden’s “Infrastructure” bill only contains about 30% of the funds for anything remotely resembling “infrastructure”.

            Give the asshats in Gub’mint more money and it will never be rebated to the people who paid the money.

            The only way to control Gub’mint spending is to restrict the amount of money Gub’mint can take and restrict the amount of money Gub’mint can borrow.

          2. “Our government, at all levels, is a massive deceit machine.”

            If you vote for Republicans, sure!

            That’s sort of on you though, right?

            They’re committing the crimes right out in the open. You have no one but yourself to blame if you put criminals in positions of power and they end up picking your pocket…

            “Led by the oil and gas industry, this sector regularly pumps the vast majority of its campaign contributions into Republican coffers.”


          3. f/k/a_tmtfairfax Avatar

            “The money needs to either go back to the public in equal shares or pay for carbon sequestration at the same price per tonne.”

            Income redistribution. Create a large constituency to impose and increase more taxes and fees. And don’t forget those non-profits that will become “eligible for grants.”

            At a bare minimum, make all the money received taxable income.

          4. energyNOW_Fan Avatar

            Who cares about Washington State carbon tax legislation drafts? Presumably that could be half-baked.

      2. Stephen Haner Avatar
        Stephen Haner

        Carbon dioxide is not a pollutant. Period.

        1. … you typed with your head inside a plastic bag…


          “Scientists demonstrated the heat-trapping nature of carbon dioxide and other gases in the mid-19th century.”

          1. LarrytheG Avatar

            wasting your time citing NASA or NOAA… he’s a hard core denier on that…

          2. Is NASA lying about the history?

            This conspiracy keeps getting bigger and bigger… almost as if it’s completely fabricated and not real at all…

            “In the 19th century, scientists realized that gases in the atmosphere cause a “greenhouse effect” which affects the planet’s temperature.”


          3. Nancy Naive Avatar
            Nancy Naive

            Haner, an affable fella BTW, does indeed have his head in a plastic bag.

            Of course, at our ages neither of us will ever know for sure, and thus there is no penalty for his being wrong, nor advantage to my being more open minded.

            We, you see, he and I see one another as the planet’s or the economy’s worst enemies… respectively.

          4. “there is no penalty for his being wrong”

            …that he will pay, at any rate…

            Forcing other people to pay your debts is sortof the definition of criminality…

            “Fixing the planet could cost younger generations $530 trillion if nothing is done about climate change”


          5. Stephen Haner Avatar
            Stephen Haner

            What about that applies to the word “pollution?” Water vapor is the number one GHG (true), so it it pollution, too?

          6. “Water vapor is the number one GHG (true), so it it pollution, too?”

            …you type from within a rice cooker…

            The internet has answers to all these “questions” you pretend to be asking, you know… You think people might eventually figure out you aren’t interested in those answers?

            “Water vapor feedback can also amplify the warming effect of other greenhouse gases, such that the warming brought about by increased carbon dioxide allows more water vapor to enter the atmosphere.”


          7. Nancy Naive Avatar
            Nancy Naive

            Uh. Again, NASA. They follow the scientific method and thus are NOT a reliable source of knowledge to Mr. Haner. Try reading chicken entrails, or a Dominion power bill.

          8. And you would agree methane is a GHG? Then what do you want to do about the fact wetlands are responsible for about 30% of global methane emissions per usgs and per IPCC…” .11 Gt of .50-.54 Gt of methane per year4.4.6. Wetlands Management – IPCC
            Gt= gigatonne=1 billion tonnes.

          9. LarrytheG Avatar

            It’s true but it’s also true that wetlands have been around for eons doing that. Right?

          10. So how is it water and carbon dioxide that support life are sooo bad and methane that’s been part of a healthy world for eons is even worse? Just proves the global warming people don’t have a clue.

          11. LarrytheG Avatar

            It’s more like the percent of oxygen versus percent of other gases that remain in balance.

            It’s like water or salt in your own body. Not bad or good but in the wrong proportions you can’t live.

            Think acid rain or CFCs. Both exist and have for eons but in the wrong proportions, they threaten the ecosystem that sustains life.

            They teach this in K12.

          12. So how is it water and carbon dioxide that support life are sooo bad and methane that’s been part of a healthy world for eons is even worse? Just proves the global warming people don’t have a clue.

          13. It’s an excellent point which illustrates the difference between fossil and biogenic carbon.

            Biogenic carbon is recycled. It passes from the air, to plants, to animals, to methane and back to carbon dioxide in the air again.

            Since the loop is closed, there is no net increase in greenhouse forcing and we can see that in the paleoclimate history on the ten thousand year time frame. Swamps were burbling and herbivores were belching the entire time, and yet there was no increase in atmospheric carbon.

            It is only when we began digging up carbon from deep underground and setting it on fire that atmospheric carbon dioxide began to rise.

            “Carbon dioxide (CO₂) is the primary greenhouse gas emitted through human activities… The main human activity that emits CO₂ is the combustion of fossil fuels”


          14. Nancy Naive Avatar
            Nancy Naive

            Depends on how it enters the atmosphere. Any waste byproduct that is cast off from any human activity is pollution.

          15. LarrytheG Avatar

            yep. Virtually all climate scientists, govt and non-govt are engaging in a gigantic conspiracy to lie about it.

            and the conspiracy gets even darker when we talk about the motivation for doing so….

            no surprise the climate deniers moved on to covid and elections….

          16. If they’re so desperate to find a conspiracy, there are conspiracies to be found!

            People might want to look into the connexions between James Bacon and Dominion Energy…

            “Dominion’s ties to climate deniers warrant greater scrutiny”


        2. Nancy Naive Avatar
          Nancy Naive

          Define pollutant.

          At over 20% of the atmosphere certain life forms mightn’t be thrilled. Hell, a 100% O2 atmosphere might not be some you’d like either.

          1. Turbocohen Avatar

            The ocean and volcanoes cause most of the airborne pollution on earth.

          2. Nancy Naive Avatar
            Nancy Naive

            No. But sounds good.

          3. Eric the half a troll Avatar
            Eric the half a troll

            Is your opinion that because volcanoes emit hydrogen sulfide, sulfur dioxide, and carbon monoxide that humans should be free to discharge all those compounds at will…??

          4. LarrytheG Avatar

            Funny how the deniers play the “pollutant” game as if things like Acid Rain and CFCs are not in their vocabularies as one or the other yet both have been regulated and reduced as harmful.

        3. LarrytheG Avatar

          just like acid rain or CFCs was not either… eh?

      3. Turbocohen Avatar

        That is not a conservative solution, its a woke liberal solution.

  4. LarrytheG Avatar

    The same economic forces that are affecting offshore wind are also affecting other potential power sources like Small Modular Reactors so cheering for this is kinda foolish.

    Speaking of Small Modular Reactors, the kind that sit on aircraft carriers and have for 50 years have yet to reach economic viability themselves because if they had, many island nations that are powered by diesel fuel at 30 cents KWH (more than twice what we now pay here) , would be using them.

    I’m not talking about small islands with a few people. I’m talking about large islands with thousands of people but have no native fossil fuel resources.

    So it’s the concept of “utility scale” for most sources of electricity, wind, solar and nukes.

    IOWs…. large scale to get economics of scale.

    don’t look for SMRs to come online anytime soon – either.

    …. a conundrum of sorts…..

    1. Cost is what kills the nuclear argument! …and the fossil argument.

      You just can’t beat the cost of wind.

      “Wind power prices now lower than the cost of natural gas”

      1. LarrytheG Avatar

        well no, not if you read Haner and Bacon here… 😉 Wind is BAD !

      2. Turbocohen Avatar

        That is simply not true. Wind cannot use any part of base load in the equation to establish true cost.

      3. energyNOW_Fan Avatar

        On-shore wind is competitive, and Virginia could/should be doing much of that (presumably though mostly PA, MD.WV as location of the actual turbines). Offshore wind is incredibly expensive and probably unproven in terms the massive size of the planned turbines. The quote “wind power prices cheaper than natural gas” is (1) *onshore* wind, (2) probably heavily-subsidized wind

      4. FragileFungi Avatar

        The numbers from 2019 are not really valid anymore. Higher interest rates hurts wind power economics a lot because they require more money up front. The prices for turbines are also way up because the materials to construct them have increased in price. This is why the wind turbine manufacturing companies have been losing tons of money and are laying off workers. Higher prices and higher interest rates are a bad combination.

        The numbers for solar are not hurt nearly as much because they need less steel and concrete, have lower maintenance costs, and last much longer before they need to be replaced. Solar can likely beat the price of wind today. Solar during the day and natural gas at night in the most efficient plant is probably a lower price as well.

        1. Oh, sure. Both wind and solar have this problem. The cost is almost entirely up-front… but this is the fossil fuel industry’s argument.

          As long as it’s only other people having to pay the price somewhere down the line, fossil cheerleaders figure the cost doesn’t matter.

          It’s a bit of a sh-tty attitude for a parent to have, but some parents are just sh-tty people.

          “unmitigated warming is expected to reshape the global economy by reducing average global incomes roughly 23% by 2100”

          1. FragileFungi Avatar

            The reason that turbine manufacturers are posting billion dollar losses is because they signed contracts for delivery before the prices went up for raw materials. The point I was trying to make is that the prices from two years ago are not what any purchase could be made for today.

            Wind power has come down in price recently by making the turbines larger, but this has started to have diminishing returns. Solar is still making more rapid technological advances, and is the cheapest energy source now.

    2. Stephen Haner Avatar
      Stephen Haner

      Well gee, Larry, about a week ago I was visiting a set of Dutch wind turbines dating back to the 16th-18th centuries, still churning. Created to pump water, not make electricity. You might give commercial SMR’s a few years before giving up. The focus was on the larger versions until just maybe 15-20 years ago, except for the Navy.

      Did kinda turn into an energy-focused trip. Pretty interesting, really. The nuke plant we sailed by was one the Germans have closed (idiots).

      1. LarrytheG Avatar

        Not giving up at all. But it’s the economies of scale that is important so that even when SMRs come online, they won’t be able to produce power as cheaply as big Nukes can.

        ditto with solar and wind….

        that’s what “utility scale” means, right?

      2. Nancy Naive Avatar
        Nancy Naive

        After my mother died, I began the task of transferring all of my father’s 35mm slides to CD so my brother and I could have copies.

        One was exactly like this and taken from the exact spot where the photographer was standing. Apparently, this is one of the Netherlands most photographed places.

        So… if you stood on this spot then I was there 60 years before you. Small world, eh?

        1. Stephen Haner Avatar
          Stephen Haner

          I have a slightly different angle, but yes, Kinderdijk near Rotterdam.

        2. energyNOW_Fan Avatar

          How did you do the slide conversion? I got started with a EPSON slide scanner.

          1. Nancy Naive Avatar
            Nancy Naive

            I bought some cheap blackbox thing with a built in 10M camera that projected the image into the ccd array. It actually wasn’t half bad. It had a fixed pattern noise that cause the image to appear a tad brighter in one corner. It was probably stray light from bad baffling. But using the autofix in MS’s old, old, old image software (like what came with NT4.0) fixed it perfectly.

            At 3 slides per tray, and about 5 minutes per tray, it took me a year to convert 25 50-slide canisters. It really wasn’t worth it. Dad sucked as a photographer, even with a very nice Voightlander.

  5. how_it_works Avatar

    “Here in Virginia, of course, Dominion Energy Virginia’s ratepayers can simply expect to pay more for its planned Coastal Virginia Offshore Wind project.”

    Is this a result of the “Virginia Way”?

    Half ass, all ass, and the “Virginia Way”.

  6. Nancy Naive Avatar
    Nancy Naive

    So… W&M Viking alumni river cruise? Those damned flyers have raised my curiosity more than once.

    1. DJRippert Avatar

      OMG, trapped on a ship with nothing but W&M alumni?!? I can think of nothing more torturously boring in the world. Watching paint dry would be scintillating compared to that cruise. By the second hour any non W&M alum unfortunate enough to be on the cruise would be gauging the odds of jumping in and swimming to the riverbank. By the third hour they would jump into the river even if they were sure they would drown.


      1. Nancy Naive Avatar
        Nancy Naive

        Now, be serious. Could you really imagine anything more entertaining than Steve, Dick, and I at a table with a half empty bottle of wine and only two rolls left in the breadbasket?

        1. Stephen Haner Avatar
          Stephen Haner

          No danger of running out of wine on those ships!

          1. Nancy Naive Avatar
            Nancy Naive

            Friends of ours did a 10-day canal barge in France. It was an all inclusive vineyard to vineyard cruise on a coverted coal barge. Drunk by 11AM day one and stayed that way.

          2. Nancy Naive Avatar
            Nancy Naive

            One of my office mates did the Grand Canyon. The worst part was the bus trip. They put them in all the gear and loaded on an old yellow short bus that still had the school name on it. He said he couldn’t imagine what people thought. Well, no. He COULD imagine. Wished he had a picture.

          3. LarrytheG Avatar

            Done it 3 times. Once in a canoe…..

    2. Stephen Haner Avatar
      Stephen Haner

      Just Viking. Not school sponsored. They do a nice job, we’ve found. Already booked again for next July. 🙂

      1. Nancy Naive Avatar
        Nancy Naive

        Count me in. Got a flyer for something like a 42-day cruise around the Horn and the Chilean fjords, up the west coast and into the Caribbean. That one looked more interesting than some of the France/Italy 5 days on the boat and 6 from hotel to hotel by bus/train. For some reason, Ritz has me on their private megayacht cruise list. Now that… but who needs an 1000 sqft cabin?

        1. LarrytheG Avatar

          I’d lean to that cruise over the European thing… and no, don’t need a big cabin either.

          but it does sound pricey…

          1. Nancy Naive Avatar
            Nancy Naive

            Yeah. The only way I’d pay the money the Ritz-C people are asking is witth a stolen credit card. You could buy an Alpha Romeo for one week’s cost.

  7. DJRippert Avatar

    Having worked 45 years in technology it’s my opinion that no amount of hope or government spending will make technology advance any faster than it will advance. Mark Zuckerberg has seen his company’s stock drop 71% this year trying to fund the acceleration of the Metaverse. Meta spends $10B per year trying t accelerate the Metaverse but the technology (particularly around the headsets) just won’t cooperate.

    One day, the Metaverse will be real. But Meta’s corporate carcass might well be on the ash heap of history by then.

    So, too the offshore wind mega-experiment contemplated by The Imperial Clown Show in Richmond.

    There is no guarantee or even valid theory that this Rube Goldberg offshore wind plan will work with anything like the economic results contemplated.

    But, Dominion doesn’t care because it has bamboozled and paid the Imperial Clown Show in Richmond into allowing all the risk to be held by the ratepayers. When the project doesn’t meet its economic goals, Dominion will just say “Opps, we tried”. And, no doubt, the liberals in Virginia will just scream for more money, more money, more money as they do whenever any major government initiative fails.

    1. LarrytheG Avatar

      So, no good stuff ever comes from DARPA ?

      1. Nancy Naive Avatar
        Nancy Naive

        Gov’t dual use is just about the only thing keeping US R&D alive.

        1. LarrytheG Avatar

          well, not to the anti-govmint folks… all govmint is evil and bad….

  8. William O'Keefe Avatar
    William O’Keefe

    To paraphrase Mark Twain, it’s not all of the things that some some commenters don’t know that bothers me, it’s all the things they know that just ain’t so. When it comes to climate change their ideology completely blunts facts.
    They should notice that the UN and its climate clan has cut the amount of warming by about half since last year. How? By ditching their extreme and unrealistic scenario and bringing climate sensitivity estimates in line with empirical data.
    The GA has enough information and will over the near future get more to demonstrate that Dominion’s wind farm is not going to achieve its objectives other than enrich Dominion.

    1. Nancy Naive Avatar
      Nancy Naive

      Ideology? Interesting word to use with a method based on observations.

      1. It’s not all that interesting when you know whom you’re dealing with.

        It’s quite predictable, actually.

  9. energyNOW_Fan Avatar

    I was out of town. Basically I view offshore wind like Hoover “damn” and the PNW power dams, I would like to see Feds develop this monster, and sell the power cheaply to us. Then we can be hoity-toity like Ca and PNW progressives and say we are greener and green is cheap.

  10. Turbocohen Avatar

    If they use obsolete technology we are gonna get screwed. So far it looks like that’s what is about to happen. If our offshore turbines lack direct drive (no transmission), articulating blades utilizing replaceable siliconized rubber on their leading edges, there is no way to not get screwed. Articulating blade hubs fold down aligning with the mast similarly to how helicopter blades fold up on a ship. During catastrophic storms this is huge and articulating hubs make it easier to perform repairs due to the inevitable blade erosion affecting the leading edge, general blade maintenance, de-icing and replacement.

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