Offshore Headwinds
As honchos from around the world meet in Dubai for the 28th United Nations Climate Change Conference (COP28) this week, itโs become increasingly clear that the much-ballyhooed โgreen transitionโ in the United Statesโfueled at least in part by big subsidiesโhas hit an equally big speed bump. โA year after President Joe Bidenโs landmark climate law promised billions of dollars for Americaโs switch to clean energy,โ Bloomberg reported last week, โsome of the nationโs most ambitious renewable power projects have been shelved, electric car sales are missing targets and investors are fleeing the sector in droves.โ Clean energy stocks that many thought the Inflation Reduction Act would boost have instead seen a โ$30 billion collapse in the last six months,โ and many analysts are significantly downgrading their emission reduction projections. As one energy consultant put it, โthe euphoria has worn off and weโre starting to realize itโs still not going to be easy,โ becauseโas another noted in the same pieceโโeconomic realitiesโ have set in.
While much of the clean energy sector in the United States is hurting, probably the biggest pains are being felt in offshore wind. Projects are getting delayed or canceled, companies are under serious financial pressure, lawsuits are blossoming, prices are increasing, and climate ambitions are doing just the opposite. Big Wind isnโt dead, but itโs definitely been taken down a notch or three.
In some ways, these and related problems are just your typical pandemic-era problems and nascent industry growing pains. In many other ways, however, the problems facing offshore wind in the United States have been caused or exacerbated by government policiesโserving as yet another reminder of what happens when industrial policy dreams meet not economic realities, but government ones.
You canโt say you werenโt warned.