Good afternoon,
Don’t look now, but offshore wind power is coming our way.
Emerging as an 800-pound gorilla on the East Coast is Ørsted.
The Danish company, with $12 billion in annual revenues, uses the Danish-Norwegian letter Ø, not a bad move in touting your green credentials.
Ørsted was formerly known as DONG Energy (Danish Oil and Natural Gas), a bow to its fossil fuel roots. For obvious reasons, associating your brand with a U.S. slang term for a male body part was not a great idea.
Ørsted was recently selected to work with a unit of New Jersey Public Service Enterprise Group (PSEG) in building a massive wind farm off Atlantic City, NJ by 2024.
Half a million homes
This project would provide power to half a million homes, far more than the 350,000 dwelling units in Delaware. PSEG is the majority owner of the aging Salem nuclear plant complex across the river from the First State.
Ørsted already operates a small wind farm off Rhode Island’s Block Island and was awarded rights to develop the Skipjack wind farm off the Maryland coast, near Delaware’s Fenwick Island. Power from Skipjack could connect with the grid in Delaware.
Other Ørsted projects off Long Island, Rhode Island, Connecticut and Virginia are in the works.
Ørsted, which developed the first offshore wind farm in the early ‘90s, estimates its development pipeline amounts to two gigawatts on the East Coast, slightly less than the output from the Salem nuclear complex.
The projects would create thousands of construction jobs, many long-term positions and added tax revenues.
While the company has a lot on its plate, Ørsted figures it can capture efficiencies with multiple projects.
Things that could go wrong
A lot can happen in the coming years that might stymie offshore wind. A deep recession or a collapse of capital markets is not out of the question.
Opposition has been growing to offshore wind, especially in the Ocean City area. Foes, worried that the wind turbines will hurt tourism, want turbines moved further offshore.
Another issue is cost, with foes pointing out subsidies and incentives from states.
President Trump, a supporter of coal, threw out the possibility of the wind dying down and Americans having no way to watch their TVs.
Natural gas could fill any gaps, although opposition is growing in using any fossil fuel.
As you might remember, Delaware was first out of the gate with the Bluewater Wind project off the coast at Rehoboth Beach.
Remembering Bluewater
Bluewater struggled with a lack of federal regulations associated with offshore wind, a recession that cut power consumption and poor conditions in capital markets. The project appears to be dead, although Gov. John Carney announced the formation of a panel charged with studying the potential for wind power.
Climate change skeptic David Stevenson of Delaware’s Caesar Rodney Institute argues that Delaware is not far behind Maryland in pursuing an offshore wind project that would increase electric rates.
Supporters of wind power point to costs that remain steady through the lifespans of turbines. Costs are also dropping for offshore wind, especially in Europe.
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