The offshore wind industry is taking in the shorts lately, and I for one couldn’t be happier. Recently, Orsted A/S and BP Plc., both took large write-downs on projects that jeopardize Joe Biden’s 2030 pipedream. On Wednesday, Orsted stopped the development of two projects off the coast of New Jersey, Ocean Wind 1 and 2, which both slipped under the waves of debt. Impairments related to the two projects could amount to as much as $5.58 billion. As a result, the stock dropped 22%, reaching a six-year low.
The industry has hit a so-called “perfect storm” of issues ranging from supply chain disruptions, higher interest rates, bottlenecks in financing, increased costs for turbines, and higher interest rates. Complicating the issues in the U.S. is that the offshore wind contracts are not protected from inflation like they are in some other countries.
Orsted, a Danish company, is the largest offshore wind developer in the world. The company stated that after walking away from the two New Jersey projects, it will be taking $4 billion in impairments. The company will now review and assess how the loss will affect the company’s long-term strategy, yet it still remains committed to the U.S. wind market.
Although BP took a smaller $540 million-dollar pretax impairment, relating to the wind projects off of New York, a top company official said the U.S. offshore wind industry is “fundamentally broken.”
Anja-Isabel Dotzenrath, BP’s head of gas and low-carbon energy, said Wednesday at a conference in London that “There’s a fundamental reset needed.” BP is partnering with Norwegian energy giant Equinor on “options for their US offshore wind projects to mitigate the effect of inflationary pressures and permitting delays,” she added.
The U.S. has a target to reach 30 gigawatts by the end of the decade from essentially nothing now. The White House loves to tout its clean energy subsidy program in order to initiate project startups, but developers need to ensure that a large number of components are U.S.-made in order to garner the full benefit of the incentives.
Obviously delusional, White House spokesperson Michael Kikukawa said, “While macroeconomic headwinds are creating challenges for some projects, momentum remains on the side of an expanding U.S. offshore wind industry.”
Except that it isn’t. The crisis isn’t limited to the U.S. In China, top turbine maker Xinjiang Goldwind Science & Technology Co. said last week that third-quarter profit tumbled 98%, while Equinor took a $300 million impairment on East Coast projects.
The truth is that wind energy is a far-left pipedream when it comes to being a viable energy source. Of course, any government that is pushing this nonsense isn’t going to tell the truth, and neither are the companies that are in that business.
In June of this year, Siemens Energy, an international energy company that seeks to “decarbonize global energy systems,” announced that it is withdrawing its profit guidance for the year after subsidiary Siemens Gamesa found that there was a “substantial increase in failure rates of wind turbine components.” The company believes that between 15% and 30% of its installed fleets are suffering from component failures.
On the same call, Christian Bruch, President, and CEO of Siemens Energy said:
The fact that we have identified more quality problems marks a significant setback for us. These quality problems go beyond what we were previously aware of, and they are directly linked to selective components at a few but important suppliers. At this point in time, we believe that the costs are likely to be in excess of one billion euros.
While the government continues to pump sunshine up the a**es of American citizens and money into their own and selected others’ pockets, the green energy Ponzi scheme marches on. All of their goals, which are really lies, have no basis in reality.
For instance, none of the major manufacturers of wind turbines are profitable, so why are they still smiling? Because they know the left will continue to grant money and subsidies that will continue to keep them afloat. All the while, they will continue to enflame the radicals, making them believe that the lies, which are unattainable, are true. This accomplishes two goals. It keeps the money flow rolling and creates division and chaos.
There is already speculation that the Biden administration will throw more taxpayer money into the wind to save this boondoggle. David Blackmon, an energy consultant with 40 years of experience said this in an interview with Daily Caller News Foundation:
No one should doubt the willingness of the Biden administration and congressional Democrats to try to spend billions more debt-funded dollars to bail out their pet offshore wind industry. Offshore wind, though completely unnecessary and environmentally destructive, has been a centerpiece of the Green New Deal propaganda, and its supporters will resort to any measures available to keep it on life support.
On Friday, Blackmon published a piece on Substack. In it, he warned that there seems to be an open pocketbook when it comes to wind projects:
Everyone should prepare themselves to see an effort in Washington, DC to allocate billions more dollars to bail out Big Offshore Wind developers soon. It turns out the billions already offered by various state governments in the Northeast and in the Orwellian-named Inflation Reduction Act just aren’t enough largesse to sustain these hogs feeding at the government trough. So, they have recently been pressuring friendly politicians to dump another bag of debt-funded printed dollars into the bin.
Others believe that this is the result of the government’s effort to make the industry into what it is not. Daniel Turner, founder and executive director of Power the Future, told the DCNF:
This is what happens when the government tinkers in markets that it has no expertise in. It does not matter that it costs an enormous amount of money, jeopardizes the grid’s reliability, or inflicts pain and higher costs on the American people: it is about the agenda and reaching political targets.
Green energy is an unattainable pipe dream. This country and this world will never operate successfully on renewable energy. The left loves to use terms like clean, sustainable, and green, but there is nothing green, clean, or sustainable about any of this.