Alboran Energy Strategy Consutlatns

SouthCoast Wind

  • Energy Musings, August 24, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

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    August 24, 2023

    Is National Fisheries Pissed At BOEM?

    The latest comment letter from the National Marine Fisheries Service to BOEM about the Beacon Wind offshore projects. NWFS has concerns with the plan and was sharply critical of the way BOEM has handled the agency’s prior comments and concerns. The gauntlet was thrown down with the warning that continued ignoring of NWFS concerns would lead to a rejection of a “no jeopardy” ruling that would derail the wind farm’s development. How much is the surge in whale deaths playing in this interagency dispute? Another dead whale washed ashore on Monday – now 66 since December 1, 2022. READ MORE

    Is National Fisheries Pissed At BOEM?

    We recently read the August 14, 2023, cover letter to the Bureau of Ocean Energy Management (BOEM) from Michael Pentony, the Regional Administrator of the Greater Atlantic Regional Fisheries Office of the National Marine Fisheries Service (NMFS). NWFS is part of the National Oceanic and Atmospheric Administration (NOAA). The letter was in response to BOEM’s request for comments related to its Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS) for the construction, operation, and decommissioning (COP) of Beacon Wind Energy LLC’s proposed wind energy facilities (Beacon Wind 1 and 2) off the coast of Massachusetts.

    Pentony wrote of his organization’s concerns with the plan and recommended approaches to help ease the regulatory process. The letter also contained criticisms of BOEM’s work, with NWFS’ sharpest rebuke in the opening paragraph of Appendix A attached to the letter. The critical comment reflects frustration with BOEM’s treatment of NWFS’ input to previous requests for comments about various offshore wind projects. Here is what NWFS wrote in that opening paragraph in a section headed “Purpose and Need.”

    “Since NMFS is an action agency and anticipating a request for incidental take authorization under the MMPA [Marine Mammal Protection Act], we need our Purpose and Need for the action to be clearly stated in the EIS. While BOEM did provide cooperating agencies an opportunity to coordinate on development of the Purpose and Need for the EIS before publication of the NOI, corrections provided by NMFS were not incorporated in the Purpose and Need statement included in the NOI. Some of the edits made by BOEM are additional deviations from previously agreed upon language. We recommend this be corrected in the DEIS [Draft Environmental Impact Statement] by incorporating previously provided revisions for Beacon Wind and following template language developed through extensive interagency cooperation in 2022, including for the NMFS-specific purpose and need.”

    Where does this frustration with BOEM come from? Most likely it began with the December 1, 2021, comment letter about the Mayflower Wind (now known as SouthCoast Wind) NOI to prepare an EIS. In those comments, NMFS discussed the speed with which BOEM was putting out requests for input and information about various offshore wind projects, which was not allowing adequate time for the agency to respond. Pentony wrote in his cover letter for NWFS’ comments on the SouthCoast Wind project:

    “The high number of projects moving through the NEPA [National Environmental Policy Act] process between now and 2024 makes it very difficult for us to provide the detailed level of review and interagency cooperation we have provided in the past. The extensive interagency cooperation we have invested with you to improve the NEPA documents for previous wind energy projects is no longer feasible, and we will be required to take a more limited Cooperating Agency role in the process.”

    So BOEM was working so fast that a key agency that advises on the maritime and fishing environmental risks of offshore wind couldn’t do its job properly. Is that like a doctor skipping an examination before telling you what you must do to cure an illness?

    Read the full article on Energy-Musings.com »

  • Energy Musings, July 14, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    July 14, 2023

    SouthCoast Wind Paused But Not By Lies

    Rhode Island Energy Facility Siting Board pauses SouthCoast Wind cable approval process until late 2024 over financial uncertainty and not potential management lies to the board. READ MORE

    Renewables Make New England Electricity Expensive

    New England electricity prices have climbed rapidly despite power consumption falling. The cost of meeting renewable energy mandates is driving those rapid price increases. READ MORE

    Tale Of Whale Deaths Not Pleasant Reading

    From December 1 to July 12, whale deaths off the East Coast totaled 56, or about eight a month, yet government regulators continue ignoring the possibility of a link to offshore wind construction. READ MORE

    SouthCoast Wind Paused But Not By Lies

    Recently, it came to light that a staff member of Rhode Island’s Coastal Resources Management Council (CRMC) sent an email to the administrator for the Rhode Island Energy Facility Siting Board (EFSB) claiming that the testimony of representatives of SouthCoast Wind at its June 12 show-cause hearing included several lies. The nature of the claims and how they arrived required the EFSB to notify all parties involved and make the email public. At the end of the day, it wasn’t this controversy but rather the uncertain future for the project that sank its transmission cable permit application.

    On Thursday, the EFSB voted unanimously to pause the cable application process until October 1, 2024, to give SouthCoast Wind time to secure new power purchase agreements (PPA) to finance the $5 billion, 804-megawatt (MW), 147 wind turbine project assuming it is selected in Massachusetts’ next offshore wind auction. It was this uncertain status that convinced the three EFSB members that it was inappropriate to use the agency’s limited resources to process the application only to have the project fail to secure new PPAs and be built.

    Read the full article on Energy-Musings.com »

  • Energy Musings, June 29, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

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    June 29, 2023

    Body Blows To Wind Energy And Net Zero

    Turmoil has engulfed the offshore wind industry and its extent has become evident in the past several weeks. More dead whales washed ashore only days after foundations to support offshore wind turbines began being hammered into the ocean floor off Martha’s Vineyard. The leading offshore wind developer told financial analysts its U.S. offshore wind portfolio was not profitable, which was forcing the company to redesign, shrink, and terminate contracts. Ørsted has cut its 2030 offshore wind installed capacity target by 7%, and its actions impact its developments in Europe, too. Most telling was the CEO announcing a new U.S. project would go forward after the state agreed to give the company its 80% share of federal government tax credits.

    Compounding the industry’s problems was the announcement by Siemens Gamsea, the leading wind turbine manufacturer, that it would wipe out 40% of its profits due to the cost of correcting component failures and failure to meet productivity goals. The full extent of its problems remains unknown. Lastly, the U.S. Government Accountability Office announced it would commence an extensive investigation of offshore wind and its impact on the military, air transportation, marine ecology, the commercial fishing industry, and the resiliency of the wind turbines. This investigation comes after other government agencies have rebuffed the need for deeper inquiries into these issues. READ MORE

    Body Blows To Wind Energy And Net Zero

    Recent weeks have not been kind to the offshore wind industry. The stretch of bad news was capped by the following Financial Times headline: “Siemens Energy shares plunge after wind turbine problems deepen.” Siemens Gamsea announced late last Thursday it was withdrawing its financial profit guidance for 2023. The move was in response to its need to reserve $1.1 billion for warranty claims and expenses arising from technical problems with many of its onshore wind turbines. The next day, Siemens Energy, owner of Siemens Gamsea, saw its share price drop 37%. The stock price slide continued Monday with the share price down 3%, bringing to $8 billion the market value wiped out. Analysts worry that all the bad news is not out.

    Earlier, Ørsted, the Danish wind energy giant, told analysts at its annual capital day that it was scaling back its installed offshore wind goal for 2030 by redesigning, shrinking, and abandoning projects because they are uneconomic. Ørsted is terminating offshore wind project power purchase agreements in multiple U.S. states and pushing for higher subsidies in European wind markets. It presented a chart showing its U.S. offshore wind portfolio of projects will barely earn its weighted average cost of capital, an unacceptable financial return.

    Economics is not the only challenge offshore wind faces. Two dead humpback whales washed ashore on Martha’s Vineyard only days after the first Vineyard Wind turbine foundation was hammered into the ocean floor. Are the two connected?

    Because the whale carcasses remained in the surf, the National Oceanic and Atmospheric Administration (NOAA) announced it was abandoning plans to examine them in search of the cause of death. NOAA said such an investigation would be too difficult, despite NOAA being charged with protecting endangered marine mammals.

    Three other dead whales washed ashore on Long Island bringing the total of known dead whales since last December to 46. Senior NOAA and Bureau of Ocean Energy Management (BOEM) officials have stated there is no connection between offshore wind construction activity and dead whales. Yet, their researchers acknowledge they do not have a full understanding of how underwater noise may impact the behavior of marine mammals, especially whales. They want to undertake more studies. Is that the science we are supposed to follow?

    Read the full article on Energy-Musings.com »

  • Energy Musings, June 20, 2023

    Written by

    Allen Brooks

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    in

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    June 20, 2023

    Offshore Wind Confronts A Deteriorating Market

    Last week, a show cause hearing for SouthCoast Wind was held by the RI EFSB to understand why the company wants the approval process for its transmission cables to go forward while the financial viability of the project is in doubt. SouthCoast Wind, as well as other Massachusetts, Connecticut, and New York projects, are terminating or renegotiating their power purchase agreements because the price of the electricity contracted to be sold to utilities will not finance the wind farms’ construction.

    The unfinanceable status of these wind farms arises because the power was sold on the assumption that construction costs were always declining and would continue that trend. Billions of dollars of capital have been wagered on that assumption, and now developers are looking at huge financial losses. They do not want to admit any responsibility for the financial disasters. They want to be rewarded for terminating PPAs and given reconfigured bidding procedures to save them.

    We watched the two-plus hour hearing. We analyze the issues raised, the challenges facing the market today, and how developers expect to be absolved of mismanagement. SouthCoast Wind’s CEO was the star witness, and he delivered an impressive Alfred E. Newman imitation.

    The offshore wind market is in turmoil like never before. Utility regulators face Hobson’s Choices, suggesting no one is going to be happy where the industry lands and especially its upcoming journey. Given shifting attitudes toward “green energy,” wrapping oneself in the flag of public policy may not be the answer as much as developers try. READ MORE

    Offshore Wind Confronts A Deteriorating Market

    Up and down the East Coast, offshore wind developers are waking up to find their power purchase agreements (PPA) underwater. Trying to avoid financial disasters, they are scrambling for solutions. Why the turmoil? Simple. Actual project costs are wildly off from the estimates when PPA prices were locked in. Penalties to get out of PPAs are a cheaper option, especially if you are not going to be penalized for terminating the contracts. Even the inflated renewable energy subsidies in the misnamed Inflation Reduction Act won’t save these bad deals.

    The turmoil’s magnitude was at the center of a hearing before the Rhode Island Energy Facility Sitting Board (RI EFSB) last week. SouthCoast Wind, a 1,200 megawatt (MW) project in federal waters off Rhode Island to supply nine Massachusetts utilities with clean electricity, needs the RI EFSB’s approval to land its transmission cables and allow their passage across the state to connect with the regional power grid at Brayton Point in Somerset, Massachusetts.

    The two-plus hour “show cause hearing” on June 12 had twice been rescheduled at the request of SouthCoast Wind – December 19, 2022, and February 27, 2023 – as the company’s assessment shifted from a viable project to an unfinanceable one. As the RI EFSB outlined in its show cause hearing notice, the need arose when it learned from the media on November 10, 2022, that SouthCoast Wind was requesting the Massachusetts Department of Public Utilities (MADPU) to suspend their review of the PPAs given the company’s realization the project was no longer financeable, i.e., unprofitable.

    Read the full article on Energy-Musings.com »

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