Power Up: More offshore wind woes
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Aug 26 -By Liz Hampton
U.S. Energy Markets Editor
Hello Power Up readers! Oil prices are up about 3% today on reports of a near total production halt in Libya. This added to earlier gains on rising tensions in the Middle East, with Brent trading above $81 a barrel and West Texas Intermediate crude above $77 a barrel. We will closely follow events in Libya, where the eastern-based government announced the closure of all oil fields, a move halting production and exports. Today's newsletter, however, is about the latest troubles in the offshore wind sector, where equipment continues to break and plans for new investment are getting scrapped. Let's dive in!
Choppy seas for the offshore wind sector
Canceled projects and equipment failures hit the industry again
Last week was full of more bad news for the offshore wind industry, which has faced countless challenges over the past year amid rising costs and supply chain hiccups that have led to project cancellations.
Some equipment is also experiencing problems. Shares of GE Vernova were off 7% on Friday following another turbine-blade failure at an offshore wind farm in the UK. That incident was the latest in a string of problems involving the power service company's equipment.
In May, for example, a wind turbine made by the company for the massive Dogger Bank A project off the UK coast came apart.
More recently, a turbine blade made by GE Vernova for the Vineyard Wind offshore project near the Massachusetts coast broke, sending fiberglass into the water and onto nearby beaches. The incident was the result of a manufacturing flaw, and U.S. authorities ordered a shutdown of the project, which is still under construction.
Several other turbines in Germany and Sweden have also broken in recent years.
GE Vernova recently split off from General Electric earlier this year as part of a planned breakup into three companies.
Offshore wind is seen as a key pillarin President Joe Biden's bid to fight climate change, but the United States will fall far short of his2030 wind goal. It is expected to catch up eventually as new projects come online.
Last week, an economic adviser for Vice President Kamala Harris' presidential campaign called for a program to loan allies money to buy the U.S. green energy technologies as part of plan to fight climate change.
Meanwhile, investments into the industry remain in flux. Last week, Norway's Equinor halted plans to invest in Vietnam's offshore wind sector and said it would close its office in Hanoi.
Although Vietnam is attracting international interest in renewable plans, delays in regulatory reformshave pushed some investors to reconsider.
This cancellation comes after Danish offshore wind company Orsted last year said it would also pause plans to invest in large offshore wind farms in the country.
Finally, I want to take a moment to acknowledge Ryan Evans, a Reuters safety adviser who was killed this weekendin a strike on a hotel in the eastern Ukrainian city of Kramatorsk. Two other Reuters journalists were injured. Our thoughts are with Ryan's family and loved ones, and we are wishing our injured colleagues a swift recovery. We so appreciate and value the work these journalists do and the sacrifices they make.
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In the UK, energy regulator Ofgem on Friday raised its price cap for household energy bills by 10% from Oct. 1 on severe weather events and geopolitical conflicts.
A residential solar subsidy in California will cost ratepayers without rooftop panels about $8.5 billion annually, contributing to higher electricity rates for consumers. That's up from $3.4 billion in 2021.
We hope you're enjoying the Power Up newsletter. We'd love to hear your thoughts and feedback. You can reach us at: powerup@thomsonreuters.com.
Editing by Marguerita Choy
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