Costs Are Up 57% on Already Super Expensive Offshore Wind Projects | Eastern North Carolina Now

    Other costs soared, too, because of inflation pressures that have also hurt other industries. Steel is much pricier than it was prior to the pandemic, for instance. A consultant hired by the wind developer on Shell's Massachusetts project estimated that costs have risen more than 20% since 2019, and rising interest rates have added more financial stress. "This is not an industry that is in a healthy and mature state," the report said. Another problem: The supply chain to build wind turbines is nowhere near ready to handle the influx of projects. Installation capacity is at 20% of where it needs to be, according to a study by energy consultant Wood Mackenzie. [Emphasis added.]

    That is a very telling quote regarding the cost of offshore wind projects and who really pays: "Europeans have been less sensitive to higher prices because they already pay a premium for electricity compared with American consumers, who benefit from abundant coal and natural-gas reserves."

    There's another looming issues as well.

    GCube Insurance, May 2, 2023:

    The offshore wind sector must take action to address a rising tide of mechanical breakdown issues, component failures and serial defects ensuing from the deployment of ever-larger offshore wind turbines. This is according to GCube Insurance (GCube), a leading underwriter for renewable energy projects.

    GCube's new report, entitled "Vertical Limit: When is bigger not better in offshore wind's race to scale?", is compiled from 10 years of the company's claims data and draws on evidence from experts across the offshore wind sector to demonstrate how offshore wind's risk landscape has significantly shifted, as manufacturers push to develop bigger machines, faster. ...

    Amongst the findings of the report, underwriters are concerned that 55 percent of all claims by frequency come from component failures during construction from 8MW+ machines, which now represent a larger share of Total Insured Values (TIVs). This, combined with an increase in average offshore wind losses, up from 1million GBP in 2012 to over 7million GBP in 2021, is creating unsustainable financial risk, right when scaling is needed to bring about the energy transition.

    Another major finding is that 8MW+ machines are suffering from component failures within the first 2 years of operation. This is juxtaposed against the significantly shorter timeframe (5yrs) for component failures during operation in the 4-8MW category of turbines and points to the urgent need to address product quality and reliability - a key recommendation of the report. [Emphasis in original.]