{"id":46942,"date":"2023-11-12T14:39:23","date_gmt":"2023-11-12T14:39:23","guid":{"rendered":"https:\/\/innodebt.com\/business\/us-offshore-wind-goals-will-be-missed-say-parts-manufacturers\/"},"modified":"2023-11-12T14:39:23","modified_gmt":"2023-11-12T14:39:23","slug":"us-offshore-wind-goals-will-be-missed-say-parts-manufacturers","status":"publish","type":"post","link":"https:\/\/innodebt.com\/?p=46942","title":{"rendered":"US offshore wind goals will be missed, say parts manufacturers"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=87be9193-f110-48d8-8ebd-fa166ab6e489\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>The Biden administration\u2019s plan to increase offshore wind generation capacity by 2030 will not be met, executives at the world\u2019s biggest turbine manufacturers have said, warning that the sector needed a reset to become economically viable. <\/p>\n<p>The White House has set a goal of installing 30 gigawatts of offshore wind capacity by 2030 \u2014 enough to power 10mn homes \u2014 and has made the target central to its plans to slash carbon pollution. <\/p>\n<p>But recent project cancellations, including Danish developer \u00d8rsted\u2019s decision to pull two offshore projects in New Jersey, and soaring costs had thrown the entire strategy into peril, said executives. <\/p>\n<p>The 2030 target was \u201cwidely and regretfully acknowledged\u201d to be unrealistic, said Josh Irwin, senior vice-president of offshore wind at Vestas, the world\u2019s largest offshore wind manufacturer. <\/p>\n<p>\u201cThese cancellations and delays go beyond growing pains,\u201d Irwin told the Financial Times, adding that Vestas lacked the certainty needed to move forward with plans to build a US factory.<\/p>\n<p>\u201cThe US industry is in the middle of a fundamental reset to restore economic viability.\u201d <\/p>\n<p>Richard Voorberg, chief executive of Siemens Energy North America, made similar comments this week, saying the administration\u2019s 2030 offshore wind target was now a \u201ctall order\u201d.<\/p>\n<p>\u201cThe market\u2019s got a problem. You look at Siemens Energy, you look at GE, you look at Vestas, the big players, we\u2019re all losing money\u2009.\u2009.\u2009.\u2009That\u2019s not a sustainable model,\u201d Voorberg told the FT\u2019s Investing in America summit on Tuesday.<\/p>\n<p>The warnings from the largest wind manufacturers came as developers move to cancel or renegotiate contracts after suffering steep losses. Aside from \u00d8rsted, Avangrid and Shell have cancelled projects, and BP and Equinor reported $840mn in impairments last quarter from their two New York projects after the state rejected their requests to renegotiate contracts. <\/p>\n<p>Just one offshore wind project is in full operation in the US, generating 30 megawatts of electricity per year off the coast of the state of Rhode Island.<\/p>\n<p>The delays pose a risk to the US\u2019s plans to halve its emissions by 2030 as well as President Joe Biden\u2019s ambition to create a domestic offshore wind manufacturing sector \u2014 an effort to create jobs while also breaking dependence on foreign supply chains. <\/p>\n<p>The administration\u2019s landmark Inflation Reduction Act, which passed Congress last year, included about $370bn worth of sweeteners to stimulate domestic cleantech manufacturing. At least 10 offshore wind ports and five projects to build vessels and structures for offshore wind have been announced since the IRA passed.<\/p>\n<p>But rising project costs and expectations that interest rates will remain higher for longer are hurting the sector\u2019s prospects, analysts have said. <\/p>\n<p>Vestas has agreed to supply offshore wind projects in New Jersey and New York and plans to build a nacelle factory. But the facility \u2014 for which the planned capital expenditure has not been announced \u2014 could be shelved if the Atlantic Shores, a project planned by Shell and EDF Renewables offshore New Jersey, does not go ahead. <\/p>\n<p>The developers have called on the state for \u201cimmediate action\u201d, warning that \u201ctens of thousands of real, well-paid and unionised jobs are at risk\u201d.<\/p>\n<p>\u201cWe\u2019re taking a wait-and-see approach because we need to gain confidence in a multiyear, multi-project pipeline of demand,\u201d Irwin said.\u00a0<\/p>\n<p>More than half of US offshore wind contracts have been cancelled this year or are at risk of cancellation, according to consultancy BloombergNEF, which says the US 2030 offshore wind targets are \u201cimpossible\u201d at this time.\u00a0<\/p>\n<p>The three largest wind turbine manufacturers, Siemens Energy, General Electric and Vestas, have all reported consecutive quarterly losses in their wind segments in the past year. <\/p>\n<p>\u201cWe know the industry is ready for a reset\u2009.\u2009.\u2009.\u2009We think we can make a much better business with offshore wind, but we\u2019re staring at some challenges that we need to address here in the fourth quarter and in 24,\u201d GE chief executive Larry Culp told analysts last month. <\/p>\n<p>The uncertainty among builders leaves the future of towns betting on an industrial revival from the sector up in the air. The US Department of Energy estimates that the country\u2019s offshore wind industry could need up to 58,000 jobs per year from 2024-2030 if the local supply grows as planned. <\/p>\n<p>\u201cIt\u2019s heartbreaking\u2009.\u2009.\u2009.\u2009Everyone\u2019s like, \u2018What do we do now?\u2019\u201d said Stephen Sweeney, a former New Jersey state senator and union leader, after \u00d8rsted\u2019s decision to pull two projects in the state. <\/p>\n<p>Sweeney resides in the third district, where the state is building a $400mn offshore wind port.\u00a0\u00d8rsted would have been its first tenant. <\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/87be9193-f110-48d8-8ebd-fa166ab6e489\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. The Biden administration\u2019s plan to increase offshore wind generation capacity by 2030 will not be met, executives at the world\u2019s biggest turbine manufacturers have said, warning that the sector needed a reset to become economically [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-46942","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>US offshore wind goals will be missed, say parts manufacturers | Innodebt<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The Biden 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