Offshore wind runs into rising costs and delays

economictimes.indiatimes.com:

wind complexes, in the North Sea off eastern England. Now, there are questions about whether this project will ever be built.

Last month, Vattenfall said it would halt the first of three phases of the wind farm complex, the Norfolk Offshore Wind Zone, which is projected to provide power for about 4 million homes in Britain. Vattenfall blamed rapidly escalating costs for equipment and construction expenses, which they said had climbed as much as 40% over the past few quarters.

The estimated price tag for the three phases has risen to 13 billion pounds, or about $16.6 billion, from 10 billion pounds. “With the new market conditions, it simply doesn’t make sense to continue the project,” Helene Bistrom, head of business area wind at Vattenfall, said during a video presentation.

The decision led Vattenfall, which is owned by the Swedish government, to write-down more than $500 million. Vattenfall’s pullback added to the widespread alarm unfolding across the offshore industry about rapidly increasing costs, due partly to supply chain issues and rising demand.In recent months, several developers in the United States have sought to renegotiate power supply contracts, scrapping them in at least one case, and Orsted, a Danish company that is the world’s largest offshore wind developer, warned that a major project, Hornsea 3, in Britain could be “at risk” without more government support.

With interest rates shooting up, financing the billions of dollars in investment that go into these installations has also become far more expensive. On Monday, turbine maker Siemens Energy reported a net loss of 2.9 billion euros ($3.2 billion) for the April-June quarter, largely because of problems tied to “increased product costs and ramp-up