Offshore Wind Development Costs 30% Higher in United States

Offshore wind development costs are 30% higher in the United States than they are in Europe, Germany’s biggest utility said on Thursday at the CERAWeek conference.

According to RWE AG CEO Markus Krebber, the wind industry in the United States lacks maturity. “Offshore wind has become very complicated,” Krebber said, with inflation and supply chain delays rampant.

RWE, with projects both in Germany and the United States, would know. RWE is currently engaged in a joint venture with National Grid off the coast of New York in the project known as Community Offshore Wind.

“When I look at the current offshore wind program, it will take some time to make it more competitive,” Krebber said, referring to the United States’ wind industry in general. Eventually, Krebber expects the wind industry in the United States to become more competitive in the coming years as supply constraints are relieved.

Soaring costs, supply chain delays, and low electricity prices at auctions have all put a damper on wind power installations in the United States and Europe, despite ambitious targets set by policymakers. And missing those wind targets could send the whole net-zero targets into a tailspin—although the Inflation Reduction Act in the United States and the European Commission pushing to fast-track permitting may help move things along for wind installations.

But it might not be fast enough.

Last September, Krebber said over LinkedIn that offshore wind industry challenges were “happening at a time when the entire offshore industry has to scale up to achieve expansion targets, this quickly calls into question the achievement of climate protection goals,” adding that we need “a framework that allows for more investment certainly for both manufacturers and developers.

By Julianne Geiger for Oilprice.com

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