Market Today; Offshore Wind -- February 11, 2021

Market today:

• 10-Year Treasury: link here. 1.15%. Unchanged.
  
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Wind

Later, from a reader with extensive experience in the marine construction field (seven years as a commercial diver), who has followed offshore wind with keen interest and a fair degree of familiarity, had this to say:

From start to finish, [offshore wind] is an unmitigated disaster ... even way more so for Americans with their uber-abundance of hydrocarbons.

The final two paragraphs from your linked article precisely describes what is involved here. 

By pandering to the public's fears and ignorance, faux environmentalists - backed by malevolent foreign entities - are on a clear path to destroy - or at least greatly hobble - the American and European economies.

The last two paragraphs of that article on offshore wind energy:

This planning failure is more than a question of painful domestic economics and inadequate climate policy. The broader hazards of driving the U.S. towards renewable energy are brought into sharp focus by increasingly intense competition from a China whose president has admitted that its emissions from low entropy, but high emitting, fossil fuels will continue to rise until 2030 and remain substantial for some considerable time thereafter, with the country only aspiring to become carbon neutral in 2060.

If China fulfills that aspiration, it will be on its own terms and no other: There is every reason to think that Beijing is making an end run around renewables, dressing the window with what are, for that gargantuan national system, mere traces of wind and solar, while in reality concentrating on the accumulation of great wealth from fossil fuels, now rendered cheap by coerced exclusion from the Western markets. With that wealth in hand, China will deploy advanced nuclear to generate both electricity and hydrogen on the largest possible scale so as to honor its longer-term climate change promises while simultaneously securing its economic, military, and geopolitical preeminence. A nuclear China would be richer, stronger, and cleaner than any of its competitors.  The engineer bureaucrats of Beijing know nature far too well to think that she can be fooled. The lawyers and ideologues in the White House take a different view, for now.

Original Post

US offshore wind prospects: overblown promises and blown-up costs. 

My observations:

• renewable energy will never be more than a niche energy source;
• corollary: China knows this
• solar energy is an even smaller energy niche than wind
• new sites for US onshore wind are decreasing; most of the "good" sites have been "taken"
• state governments and surface owners pushing back on new wind farms
  
• offshore wind: if it was as good as folks say it is, we would see a lot more projects; 
• offshore must go farther and farther out; more and more expensive

A reader sent me this article in National Review, February 11, 2021. 

The lede:

In energy policy, it is physics that matters above all else. Executive Orders from the Oval Office, Directives of the European Union, or Acts of Parliament driven through with fanfare by Her Majesty’s Government in London may give the plausible appearance that wishes are horses and beggars may ride, and in comfort too, but it is no more than appearance. As Richard Feynman, the great laughing natural-philosopher of our age, observed with savage economy after the Challenger disaster: “For a successful technology, reality must take precedence over public relations, for nature cannot be fooled.”

The question:

But what is the reality of renewable energy? In one of his first actions as president, Mr. Biden has expressed the wish to “double” offshore wind in the U.S. by 2030, an ambiguous phrase that probably means he and his advisers wish to see twice the current development portfolio of offshore wind capacity to be operational within a decade, or 18,000 MW rather than the present 9,000 MW in an advanced stage of preparation.

The attraction is easily explained. The U.S. already has a great deal of onshore wind power, 112,000 MW, subsidized through Production Tax Credits and mostly located on and around a line running from North Dakota to Texas, a broad belt characterized by strong winds, cheapish land, and low construction costs. Unfortunately, it is also distant from the main corridors of demand on the East and West coasts. Offshore wind along the coasts therefore seems like a tempting option for expansion, but is it wise?

Obfuscation and reality:

The U.S. has almost no experience with offshore wind, with only two small projects completed, totaling 42 MW, about 0.2 percent of Mr Biden’s apparent aspirational 2030 target for this technology.

However, this need not be a leap in the dark. In pursuit of relevant data, the U.S. can look to Europe, and particularly to the United Kingdom, which already has 10,000 MW of wind deployed in the British seas, some dating back to the early 2000s. Nearly everything the U.S. might wish to know is there. Extracting that information, however, will not be straightforward since the British government and the wind industry are colluding in an obfuscation of the truth. Both sides claim that costs are falling, the government because it is reluctant to admit failure after many tens of billions of dollars of subsidy, the industry because its participants hope to survive long enough to be rescued out by a future government so desperate that it provides new (and probably covert) subsidies.

As a matter of recorded fact, costs have increased by about 15 percent for every doubling in total wind capacity in North Western Europe, mostly because of the necessity of using sites that are more distant from shore and in deeper water, requirements from which the U.S. would not be immune. Professor Hughes finds that these trends greatly outweigh any reductions in cost due to the use of larger turbines.

Of particular interest to the United States is the outlier in the figure, which represents a floating wind-turbine project, Hywind, the costs of which are double the average for fixed turbines in deep water. The majority of the available U.S. offshore wind resource flows over waters more than 60 meters deep, ruling out seabed foundations.

This article is a keeper. Archived.