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The young industry of wind energy has hit economic headwinds in the U.S.


The U.S. wind industry made history today. Officials announced that an 800-foot-tall wind turbine off the coast of New York is now sending electricity to the grid, making it the first commercial-scale offshore wind project to power U.S. homes. The Biden administration is banking big on wind energy, with the goal of powering millions of homes by 2030. But so far, fewer than 10 turbines are working, and the young industry here in the U.S. has hit some economic headwinds, so to speak. WFAE's David Boraks and WBUR'S Miriam Wasser have been following these headwinds and join us now. Hey to both of you.



CHANG: So David, I want to start with you. What is going on with offshore wind at the moment?

BORAKS: Well, things looked really good for the offshore wind industry, especially in the northeast, until a year or so ago. States were setting ambitious targets. Developers were proposing projects and signing huge contracts. But then the economic problems began. Inflation, supply-chain issues, rising interest rates suddenly made projects that looked cheap and reliable a year and a half ago a challenge. But there's still plenty of signs of growth. One analyst said that all the good and bad news in headlines feels like whiplash.

CHANG: OK, well, then, Miriam, the first signs of trouble were in Massachusetts - right? - where you're based. What happened there?

WASSER: Yeah, so the way that things work in the offshore wind world is that developers and states sign long-term contracts that guarantee electricity at a certain price. And about a year and a half ago, after all the global economic problems started, a number of developers took a look at their balance sheets and realized that they just couldn't build the projects at the prices that they originally promised.

CHANG: OK, so how have those economic challenges been playing out in various states?

WASSER: Yeah. For the most part, what we've seen is developers in several states - so, like, Massachusetts, New York, Connecticut - they've canceled their contracts. And importantly, this doesn't mean that the projects are canceled. It just means that the developers are going to try to negotiate more favorable prices in the future.

BORAKS: But Ailsa, in New Jersey, a different scenario played out. Orsted, the world's largest wind developer, just straight-up canceled two projects, and that was a big deal. The company's contracts guaranteed low electricity prices, and those numbers no longer worked. Here's Orsted CEO Mads Nipper.


MADS NIPPER: The world has, in many ways, from a macroeconomic and industry point of view, almost turned upside down.

BORAKS: Orsted also blamed supply chain delays here in the U.S., including a shortage of the specialized ships needed for installation. At the same time, many of the company's other projects are moving forward, like the one in New York that just started producing power this week.

CHANG: Well, what's been the reaction so far to the news of the canceled New Jersey projects?

BORAKS: Opponents of offshore wind have jumped on this as evidence that offshore wind is a bad idea and can't work here in the U.S. But environmental advocates maintain that the U.S. needs offshore wind and that it will happen despite the economic challenges.

WASSER: Yeah, and it's not just advocates. Here's Massachusetts Governor Maura Healey recently. She's reaffirming that the state is, quote, "all-in" on offshore wind.


MAURA HEALEY: It is the backbone of our clean energy vision. It's critical to achieving the clean energy transition and to meeting our emission reduction limits.

WASSER: I want to point out, too, that many Northeast states are banking on offshore wind to meet their renewable energy goals and their growing electricity needs because there's not really another good option. There's not a ton of space in the northeast for big solar farms or onshore wind projects. Plus, the region actually has some of the strongest and most consistent winds offshore in the world.

CHANG: Huh. I had no idea. Well, I understand that there's a big offshore wind project under construction near where you are, Miriam, in Massachusetts, right? Like, what's going on with that one? It's called Vineyard Wind?

WASSER: Yep, so this is the country's first big offshore wind project. It's going to produce enough electricity to power 400,000 homes in Massachusetts, and the turbines that this project is using are some of the biggest in the world. We're talking about blades the length of a football field here.


WASSER: Yeah. And the company has installed five turbines and says it expects to start sending electricity to the New England grid by the end of the year.

CHANG: All right. So David, what's going on in the rest of the country?

BORAKS: Quite a bit. The Biden administration recently approved two more projects - one off Virginia and one off New York. That brings the total approved projects along the East Coast to six. More leases are planned off the southeast coast, the Gulf of Mexico and the West Coast. Here in North Carolina, we also have three proposed offshore wind farms. That Virginia project eventually will be the nation's largest, powering 900,000 homes. Dominion Energy says construction will start next year.

CHANG: So what do you think, guys? Will the U.S. hit Biden's 2030 offshore wind goal?

WASSER: Well, when I talked to experts, they pretty much agree that the U.S. is going to have a robust offshore wind industry, but the country may not hit the goal of powering 10 million homes by 2030.

BORAKS: And in some places, electricity from these projects probably won't be as cheap as originally promised.

CHANG: That is WFAE's David Boraks and WBUR's Miriam Wasser. Thank you to both of you.

BORAKS: You're welcome.

WASSER: Thank you.

(SOUNDBITE OF FLYING LOTUS' "FF4") Transcript provided by NPR, Copyright NPR.

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David Boraks
David Boraks is a WFAE weekend host and a producer for "Charlotte Talks." He's a veteran Charlotte-area journalist who has worked part-time at WFAE since 2007 and for other outlets including DavidsonNews.net and The Charlotte Observer.
Miriam Wasser - WBUR