Inflation Deflates Offshore Wind Project Goals

Many offshore wind companies have already leased offshore wind sites off the East Coast expecting to make a profit.

In order to go forward each ocean wind company had to established power purchase agreements ( PPAs ). The PPA allows the wind developer to finance the project through banks or venture capitalist markets. Electric rate hearings are held between state agencies, power companies with public input and rates are established and agreed to.

The ocean wind projects on the East Coast are companies mostly based in Europe and purchase their turbines and submarine power cables from European contractors. These prices are negotiated sometimes up to a year before deliveries.

Due to inflation European wind turbine manufacturers are reporting up to a ten percent loss every time they produce a wind turbine and are laying off workers. Sources forecast up to a two billion dollar loss this year.

Massive inflation leading to financial downturns raises questions over the East Coast ocean wind projects.

If states allow power purchase agreements to be renegotiated the next question is can the commercial and residential electric rate payers afford the higher prices . When does your electric bill become a second mortgage on your home?

Shareholders bought into these offshore projects because states established long term energy agreements with ocean wind companies. Stockholders or bond holders expect a profit.

Europe is facing an energy crisis due to the war in Ukraine causing to go back to a reliance on fossil fuels rather than build more wind turbines or other renewable energy projects.

The current administration called for eighty percent clean power by 2030. Since the start of the new administration inflation has jumped to almost an average of 14 percent resulting in destroying the offshore wind projects.