US: Executive Order Suspends Offshore Wind Leasing; ?rsted Books €1.6Bn Impairment; Prysmian Drops Subsea Cable Factory Plan
A lot of news coming from the US over the past several days, with the executive order pausing offshore wind leasing taking the spotlight and some business updates making headlines such as ?rsted reporting impairment losses of some EUR 1.6 billion for Q2 2024 and GE Vernova set to remove blades on some of the Vineyard Wind 1 wind turbines. Not all news were about the challenges the industry is facing in the US as projects under construction move forward, with CVOW soon to receive its next batch of monopile transition pieces. In addition, Oceantic Network published a report that shows the US offshore wind supply chain now spans 40 states. Catch up with this and more in our recap ??
According to a report released earlier this month, the US offshore wind supply chain spans 40 states as of December 2024, with 1,932 supplier contracts signed for offshore wind and offshore wind-related projects.
The report, Offshore Energy at Work, issued by the US offshore renewable energy industry organisation, Oceantic Network on 15 January, shows that the offshore wind supply chain in the US is not concentrated exclusively in and around the coastal states off whose coasts wind turbines are installed or planned to be installed, but also reaches the country’s landlocked states such as Kentucky and Tennessee.
The US saw more than USD 40 billion (approximately EUR 38.8 billion) in industry investments, much of it stemming from the late 2010s as businesses pivoted to offshore wind development, according to the report. This includes USD 25 billion (approx. EUR 24.2 billion) in new supply chain investments, USD 4 billion (approx. EUR 3.9 billion) in steel production, and USD 1.8 billion (approx. EUR 1.7 billion) in direct investment in new shipbuilding.
These investments supported the growth of the US steel industry including steel mill expansions in Kentucky, Ohio, and Texas, and new facilities in Virginia and Maryland.
US President Donald Trump has issued an Executive Order pausing offshore wind leasing on the US Outer Continental Shelf (OCS) and mandating a review of the federal government’s leasing and permitting practices for wind projects. The Order also stops all relevant agencies from issuing approvals, either new or renewed, for both onshore and offshore wind projects until the review is completed.
“Under the authority granted to me in section 12(a) of the Outer Continental Shelf Lands Act, 43 U.S.C. 1341(a), I hereby withdraw from disposition for wind energy leasing all areas within the Offshore Continental Shelf (OCS) as defined in section 2 of the Outer Continental Shelf Lands Act, 43 U.S.C. 1331. This withdrawal shall go into effect beginning on January 21, 2025, and shall remain in effect until this Presidential Memorandum is revoked”, US President Donald Trump states in the Executive Order issued on 20 January.
According to Section 1 of the document, the withdrawal of the OCS areas under the Order does not apply to leasing related to other purposes, including oil, gas, minerals, and environmental conservation, and it does not affect rights under existing leases in the withdrawn areas.
However, for existing leases, the Executive Order instructs the Secretary of the Interior to perform “a comprehensive review of the ecological, economic, and environmental necessity of terminating or amending any existing wind energy leases, identifying any legal bases for such removal, and submit a report with recommendations to the President, through the Assistant to the President for Economic Policy.”
The signing of contracts with projects selected in Massachusetts’ fourth offshore wind solicitation has been delayed once more, with the new expected date being on or before 31 March.
The execution of contracts, which had already been delayed to 15 January, is further postponed as the Electric Distribution Companies have filed a letter with the Massachusetts Department of Public Utilities stating that the contracting parties have not yet completed their negotiations.
One counter-party has withdrawn the Vineyard Wind 2 project from negotiations because its multi-state bid, which was contingent on another state procuring a portion of the output, was not accepted by another state.
The remaining two counter-parties are now targeting the completion of negotiations and execution of contracts on or before 31 March.
The evaluation team expects the filing of contracts to be filed with the department on or before 9 May, according to the letter.
The multi-state offshore wind capacity procurement encompassed Massachusetts, Rhode Island, and Connecticut.
?rsted has reported impairment losses of DKK 12.1 billion (approximately EUR 1.62 billion) for the fourth quarter of 2024, citing rising costs for its offshore wind business in the US, mostly related to the development of the 924 MW Sunrise Wind project off the coast of New York.
The Danish offshore wind developer said that the financial strain was caused by several factors, including rising interest rates, a decline in the value of its seabed leases in the US, and increased costs associated with the construction of the Sunrise Wind offshore wind farm.
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“The Sunrise Wind project is progressing on a tight construction schedule and is navigating challenges related to supply chain and construction,” according to the developer.
The expected commissioning of the project has been delayed into the second half of 2027. ?rsted said that the costs for the project have increased, especially related to the monopile foundations.
The US Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE) have completed the review and approved the revised Construction and Operations Plan (COP) for the Vineyard Wind 1 offshore wind farm, approximately six months.
Last week, the federal government lifted the suspension on Vineyard Wind’s installation of the remaining GE Vernova wind turbines.
The new COP details the root cause analysis (RCA) conducted by the wind turbine manufacturer regarding the blade failure that occurred in July 2024.
The RCA found that there was insufficient bonding at certain locations within the blade, which should have been detected at the manufacturing plant through inspection and quality control procedures. After reprocessing of the manufacturing data from the installed blades, additional blades with insufficient bonding were identified.
BSEE directed Vineyard Wind to remove all blades manufactured at GE Vernova’s facility in Gaspé, Canada. The COP addendum includes removal activities at 22 locations, and pending further BSEE review, potentially two additional locations where blades from other manufacturing plants were installed.
The heavy load carrier Sun Rise is on its way to the US from the Port of Aalborg, Denmark, with 18 transition pieces (TPs) for the wind turbine foundations at the Coastal Virginia Offshore Wind (CVOW) project.
According to a social media post by CS Wind Offshore, which is delivering 176 TPs for the 2.6 GW US offshore wind farm, the vessel arrived at the Port of Aalborg on 3 January and sailed out towards the US on 8 January.
“We have loaded 18 units out again. Now we are at 69 transition pieces delivered for the CVOW project. Despite heavy wind gusts passing through Denmark, the site performed excellently. In good and close cooperation between the ship, project, port, and crane company, challenges were managed in the safest and best manner. The ship is now on its way across the Atlantic Ocean”, said S?ren Schlott Mikkelsen, Chief Operating Officer, Transition Pieces at CS Wind Offshore.
The transition pieces are being delivered to the Portsmouth Marine Terminal in Virginia, from where DEME is installing them at the project site located some 43 kilometres off the coast of Virginia Beach.
Prysmian has informed local authorities in Somerset, Massachusetts, about the company’s decision not to move forward with the factory for offshore wind power cables that was planned to be built at Brayton Point on a site that previously housed a coal-fired power plant which was shut down in 2017.
In early 2022, Prysmian said it signed a purchase agreement with Commercial Development Company (CDC) for the Brayton Point site and that the factory, which would produce export cables for Commonwealth Wind as the first project, represented a USD 200 million (around EUR 191 million) investment.
The company announced it would end the development of the proposed subsea cable factory on 17 January, according to US Congressman Jake Auchincloss, who issued a statement on 18 January saying the company’s decision was “disappointing and discouraging.”
According to Prysmian, its entire multi-billion-euro backlog of subsea transmission projects is in Europe, while in the US, the company will focus on opportunities driven by developments such as data centres and the overall increase in energy demand.
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Technical Integration Manager at Atlantic Shores Offshore Wind
1 个月The word that comes to mind here is 'waste'. What a tremendous waste of resources to delay and block these projects. Billions upon billions of dollars of steel, copper, aluminum, FRP, from all around the country and all around the world, with hundreds of vessels and thousands of people lined up and ready to be installed, soon to deliver tens of gigawatts of power to the US. These mature projects have been through years of development and review, scrutiny by multiple government agencies, stakeholder engagement, and public comment. The impacts to the environment, economy, existing ocean users, coastal communities, and more, have been rigorously assessed and mitigated. We need this power. We need these jobs. We need these projects. Let us keep working and let us not waste it.