NY - Giant US wind farm opens in boost for offshore industry

The facility will power the equivalent of around 70,000 homes, and a similar larger-scale project under construction in Massachusetts is expected to follow soon.

Wind projects have stalled in the U.S., with developers facing massive construction delays and funding issues. Rising project costs and high interest rates have scuppered plans to construct renewable projects, and energy executives have previously said it would be a ”tall order" to reach the Biden administration’s goal of generating 30 gigawatts of offshore wind by 2030. “The market’s got a problem. You look at Siemens Energy, you look at GE, you look at Vestas, the big players, we’re all losing money . . . That’s not a sustainable model,” Richard Voorberg, chief executive of Siemens Energy North America, told the Financial Times.

While the Inflation Reduction Act set major targets for renewable energy projects, analysts are questioning the feasibility of attaining its goals. The IRA is possibly the “largest package of clean energy support ever passed by a government” BloombergNEF analysts noted, but “it is pumping money into a market that is held back by non-economic factors.” The U.S. is unlikely to reach its goals of tripling its renewable power production by 2030.

The high cost of shipping the parts needed for wind projects is holding up production, one analyst said. “If you want to scale the industry, you’re going to need domestic supply chains,” Mike O’Boyle, a senior director at the think tank Energy Innovation Policy & Technology, told S&P Global Market Intelligence. Other regions with lower production costs are moving faster at establishing wind projects. “We are playing catch-up,” Boyle said. The U.K., which has just one-tenth of the electricity demand of the U.S., plans to hit 50 GW of offshore wind power by 2030. Britain is facing its own headwinds, however: A recent auction failed to secure any new wind power development contracts.