Financial ‘mess’ threatens Biden’s wind goals

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Oct 13, 2023 View in browser   By Arianna Skibell A giant monopile, the foundation for an offshore wind turbine, sits on rollers at the Paulsboro Marine Terminal in Paulsboro, N.J., in July. | Wayne Parry/AP Offshore wind is in trouble. New York state regulators dealt a serious blow this week to the industry’s financial picture, and that could hamstring President Joe Biden’s clean energy goals, writes Benjamin Storrow. The New York Public Service Commission, which oversees the state’s electric utilities, rejected a bid by offshore wind developers to recoup more money from customers to account for inflation. The asks weren’t small. Equinor and BP requested a 54 percent increase to the price paid for their projects. Ørsted asked for a 27 percent increase paid to its Sunrise Wind project. Democratic Gov. Kathy Hochul said the state’s “no” is aimed at ensuring New Yorkers can afford future electricity bills and are getting the best financial deal possible as companies develop large-scale sources of renewable energy. The decision imperils 4.2 gigawatts of offshore wind power in New York. Project costs have ballooned amid rising interest rates and supply-chain bottlenecks, and that’s sent developers scrambling to renegotiate power deals. Projects off the northeast Atlantic coast are central to Biden’s goal of building 30 GW of offshore wind by 2030 — enough clean energy to power 10 million homes and slash planet-warming pollution by 78 million tons by decade’s end. Now, roughly a quarter of the power needed to reach that goal will likely be delayed several years or canceled, Ben reports. “It is a bit of a mess, frankly,” Samantha Woodworth, an analyst who tracks the industry at the consulting firm Wood Mackenzie, told Ben. “These developers have already sunk so much money into these projects.” Still, New York officials say they remain committed to meeting their goal of generating 70 percent of the state’s power from renewable energy by 2030. Hochul directed state agencies to turn to another offshore wind bid and buy more power from other large-scale clean energy projects. Offshore wind is facing headwinds elsewhere, too. Since July, developers have canceled four electricity contracts to supply Massachusetts with 2.4 GW of power. A project serving Connecticut electricity customers is also on the chopping block.   Thank goodness it's Friday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net. And folks, let’s keep it classy.   GROWING IN THE GOLDEN STATE: POLITICO California is growing, reinforcing our role as the indispensable insider source for reporting on politics, policy and power. From the corridors of power in Sacramento and Los Angeles to the players and innovation hubs in Silicon Valley, we're your go-to for navigating the political landscape across the state. Exclusive scoops, essential daily newsletters, unmatched policy reporting and insights — POLITICO California is your key to unlocking Golden State politics. LEARN MORE.     Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: Manuel Quiñones breaks down the complicated dilemma President Joe Biden faces when it comes to Iran in light of Hamas' attacks on Israel. Power Centers Hydrogen hubs on the horizon The Biden administration announced seven projects today that will receive $7 billion to build landmark hydrogen hubs, delivering a major boost for technology seen as crucial for fighting climate change, writes Brian Dabbs. The White House said it expects the funding to help cut 25 million metric tons of carbon dioxide annually, roughly equivalent to removing 5.5 million gasoline-powered vehicles from the road each year. More infighting at Sierra Club The union representing Sierra Club staff filed an unfair labor practice complaint accusing the environmental group led by Executive Director Ben Jealous of developing a union-busting plan, writes Robin Bravender. Jealous denied the allegations, and he warned his team about “a small number of individuals” intent on “sowing seeds of discord among us by spreading misinformation and untruths.” Coal miner power in Poland They may be aging, fading in influence and dwindling in number, but Poland’s coal miners might just help swing the country’s nail-biting election, write Victor Jack and Wojciech Kość. Parties are fighting hard to win coal miners’ backing ahead of Sunday's vote — even if it means making them empty promises. In Other News Disappearing act: Forty percent of Antarctica’s ice shelves are shrinking, worrying scientists. 'Price worth paying': A climate researcher lost his job after refusing to fly home after a research trip because of the carbon emissions.   JOIN 10/25 FOR A TALK ON THE FUTURE OF GRID RELIABILITY: The EPA’s proposed standards for coal and new natural gas fired power plants have implications for the future of the electric grid. These rules may lead to changes in the power generation mix—shifting to more renewable sources in favor of fossil-fuel plants. Join POLITICO on Oct. 25 for a deep-dive conversation on what it will take to ensure a reliable electric grid for the future. REGISTER NOW.     Subscriber Zone A showcase of some of our best subscriber content. Former President Donald Trump is amplifying false attacks about offshore wind and whales. | Rebecca Blackwell/AP Donald Trump is harping on a new climate boogeyman: whale-killing offshore wind turbines. United Auto Workers President Shawn Fain said that the union would shift its strike strategy by making its walkout plans less predictable and more financially painful for the Big Three automakers. Developers of an 800-mile transmission line across the Midwest achieved a milestone Thursday when regulators in Missouri greenlighted the project. That's it for today, folks. Thanks for reading, and have a great weekend!   Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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