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Europeans set sails for emerging U.S. offshore wind market
Plus, inflation imperils solar renewable cost record; and the first report card on the Biden administration's climate efforts
. . . . At last, America’s wavering over wind power is coming to an end. As we covered a couple of weeks ago, it was announced that the federal government had approved a massive wind farm off the coast of Massachusetts. And now probably joining the $2.8 billion Vineyard Wind project is a plan for a huge array in the New York Bight, the eastern part of the triangle of water between mid-coast New Jersey and the far tip of Long Island, where the seabed rights will soon be auctioned off.
It’s a huge proposal — the state and its licensees are looking to generate 9,000 megawatts (MWs) whereas a mere 800 MWs are going to be pumped out from the Bay State turbines. Also noteworthy: Once again, the backers, who late last week signed a partnership deal to develop the arrays, are from Europe. In Massachusetts, the partners are Danish and Spanish; in this case, German giant RWE Renewables (RWEAG)is teaming up with the U.K.’s National Grid Ventures (NGG), reports Offshore Engineer.
It seems like RWE, in typical German fashion, will be doing most of the engineering while National Grid brings expertise in underwater cables, having developed a series of power lines between Europe and the British Isles. For instance, RWE is currently constructing the 857 MW Triton Knoll wind farm off the east coast of England and, further out to sea, has just green-lighted a gargantuan 1,400 MW venture called Sofia that will be the largest wind farm in the world. A lot of money to be made, it seems, and while the U.S. will benefit from the thousands of jobs generated, much of the revenue going overseas. Maybe it’s time for American ingenuity to huff and puff once again. . . .
. . . . It reads like a story about Argentinian inflation: Solar panel prices have risen almost 20% in less than five months, having fallen by 90% over the past decade, a plunge that sparked solar into being the fastest-growing power source in the world, reports Bloomberg. Particularly fueling the soaring prices is a shortage of a key raw material, polysilicon, the cost of which has more than quadrupled in price in less than a year, according to PVInsights. It’s not that polysilicon is inherently expensive — it’s basically made from sand — but manufacturing, most of which takes place in China, has not been able to match demand. Also adding to the inflationary stew, as we reported earlier this month, is that prices for other vital ingredients such as aluminum, steel and copper are also rising.
As might be expected, escalating costs mean that builders of solar arrays are reexamining their investments. For instance, panel-maker Canadian Solar (CSIQ) said on an earnings call last week that it may delay some of its projects. And in India, about 10 gigawatts of capacity may be impacted, Mint reported. Large-scale efforts in the U.S. could also get postponed, analysts at Cowen & Co. said, according to Bloomberg.
Meanwhile, the trend is expected to force state-owned power companies in China to push build-outs into next year, according to Solarzoom, and possibly make 2021 the first year of negative growth in global solar installations in 17 years. Not helping matters is China’s continuing isolation, a hangover from the Trump years, and its increasing propensity to dominate supply chains, from raw materials to vital renewables ingredients such as computer chips. Memo to President Biden: Make a date with the folks in Beijing. . . .
. . . . Speaking of Biden, four months into the Biden Administration, the first report card on its climate efforts is out this morning, courtesy of the Bulletin of the Atomic Scientists. The group gives Biden four As, three Bs and three incompletes in following through on his climate campaign pledges.
Easy marks were achieved in messaging, especially rejoining the Paris Climate Agreement, making appointments such as John Kerry and Gina McCarthy, and holding a summit to show there’s a new U.S. climate chief in town. Investing in new technologies and putting forth legislation such as the infrastructure bill, however, politically challenged, also earn good marks.
But improvement in climate finance remains a major hurdle. Biden’s executive order last week, which gave regulators 180 days to come up with plans to impose disclosure and risk measurement solutions on Wall Street, is a classic case of kicking the can down the road. From here, it even looks like they will struggle to get rules out in time for COP26 in Glasgow in November.
The Bulletin also worries that the administration’s climate efforts could be derailed by any new crisis that comes along, from Russia or China to immigration or inflation. Already, we're seeing inflation begin to slow climate progress with regard to solar prices. In this regard, it’s helpful that the administration has tied climate progress to advancement in issues such as racial parity and immigration, as it can move all three together.
But the report card, if nothing else, sets forth the cold reality that the honeymoon is over. . . .