Crippling European electricity prices, soaring Northeastern heating bills, looming diesel-fuel shortages, and OPEC+ drama have captured headlines for months. More quietly, offshore-wind energy developers are discovering their projects' economic infeasibility, undermining states' offshore-wind goal of generating 40,000 MW by 2040. The Biden administration must recognize this is a pipe dream, or it will cost Americans billions trying to salvage an industry doomed to fail.
October brought the first sign of troubles, as Massachusetts' Commonwealth Wind project claimed it was no longer economically viable under the terms of the power purchase agreement (PPA) negotiated with the state's Department of Public Utilities. The developers asked the state to "pause" finalizing the agreements with the state's electric utilities, a request seconded by the developers of the Mayflower Wind project, to be built nearby. Soon thereafter, a New Jersey utility told investors it was rethinking its Ocean Wind project, to be built off that state's coast.
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Jonathan A. Lesser, PhD, is the president of Continental Economics, an economic consulting firm, and an adjunct fellow with the Manhattan Institute.
This piece originally appeared in Newsweek