Ørsted Offshore Wind Farms Delayed by Pandemic

The post Orsted Offshore Wind Farms Delayed by Pandemic appeared first on POWER Magazine.

Orsted, the Denmark-based energy company and the world's topoffshore wind developer, said at least five of its projects off the U.S. EastCoast could be delayed due to impacts from the coronavirus pandemic.

The company in an announcement April 29 said the projects, with total generation capacity of about 3 GW, could fall victim to a slowed permitting process caused by shutdowns due to COVID-19. Orsted in a statement to investors said three large projects face increased risk of delays," including the 1.1-GW Ocean Wind installation off New Jersey; the 880-MW Sunrise Wind off New York; and the 704-MW Revolution Wind off Rhode Island.

The U.S. offshore wind industry has seen its growth stuntedby permitting issues and other regulatory delays, a situation now exacerbatedby the coronavirus. New York officials last week said the state's plan toprocure as much as 2.5 GW of new offshore wind in its next solicitation isbeing delayed past this summer due to the coronavirus pandemic.

Delays for Two Small Projects

Orsted on Wednesday confirmed that two of the company's smaller projects-the 120-MW Skipjack, off the Maryland coast, and the 130-MW South Fork off New York-in addition to the three larger wind farms, will almost certainly be delayed beyond their original 2022 completion dates. Orsted in its statement said it expects to complete the Skipjack project in late 2023, and said coronavirus-related shutdowns in New York will also very likely delay South Fork beyond 2022."

The company said that for Skipjack, it is no longer realistic to receive the Notice of Intent' from BOEM [Bureau of Ocean Energy Management] in due time to meet [the] commissioning date in late 2022." Orsted said that for the South Fork project, which was also planned to be commissioned in 2022, we have received the Notice of Intent', but have not received a confirmed permit schedule from the federal government outlining when the Construction and Operations Plan' (COP) will be received. This combined with impacts from the COVID-19 related shutdowns in New York, will also very likely delay South Fork to beyond 2022."

The last turbine is installed at the Block Island project off the Rhode Island coast. The project came online in 2017 and is still the only operating wind farm in the U.S. Courtesy: Deepwater Wind

Our offshore development projects in the U.S. are movingforward, although at a slower pace than originally expected due to acombination of the Bureau of Ocean Energy Management's prolonged analysis ofthe cumulative impacts from the build-out of U.S. offshore wind projects, andnow also COVID-19 effects," Orsted said in its statement. The BOEM oversees theleasing of areas in federal waters for energy development.

Regarding the larger projects, Orsted said, We havesubmitted our COP applications for Ocean Wind and Revolution Wind and areawaiting BOEM to issue their Notices of Intent', outlining the timeline forCOP approval. For Sunrise Wind in New York, we are currently unable to progressour offshore site surveys due to COVID-19 restrictions, which adversely impactsour COP application process. So, for these three projects, we need morevisibility on the path to COP approval before concluding whether commissioningin 2023-24 remains realistic. We expect to have more clarity after summer."

CEO: No Risk to PPAs

Orsted CEO Henrik Poulsen in a call with investors said the company does not at present see a risk to its power purchase agreements (PPAs) with the projects. Poulsen said the company still hopes to finish the three large projects on time in 2023-24.

We are working to the same [commercial operation date]schedule [for those projects], but we need to soon receive those permits ... ifnot there could be a delay, not necessarily a full-year delay," Poulsen said.We don't see any of the PPAs at risk; that's not a concern for now."

New England utility Eversource Energy owns 50% of the SouthFork, Revolution, and Sunrise Wind projects, in partnership with Orsted. TheLong Island Port Authority also is part of the South Fork project. Orsted isbuilding Ocean Wind in partnership with New Jersey utility PSEG. Turbines forthe five projects, including Skipjack, being built by Orsted to serve theDelmarva Peninsula, are being supplied by General Electric and Siemens GamesaRenewable Energy.

One Project in Operation

The nascent U.S. offshore wind market has several projectsin its pipeline, though only one installation-Block Island off Rhode Island, a30-MW wind farm that was a POWER Top Plant in 2017-is inoperation. The offshore wind industry was dealt a setback in the past year withthe unexpectedpermitting delay of what was touted as the first large-scale U.S. project,the 800-MW Vineyard Wind development off Massachusetts, about 15 miles south ofMartha's Vineyard.

Vineyard Wind LLC, the company developing Vineyard Wind project,submitted its construction and operation plan to federal officials in December2017, but the plan remains under review. The BOEM, despite delaying permits forVineyard Wind, has previously said it would make a final decision on theproject by year-end, but James Bennett, manager of the BOEM's renewable energyprogram, last week said the pandemic could alter that schedule.

Said Bennett: We don't anticipate any schedule slips justyet. A lot of it will depend on how things work out with COVID and whetherwe're able to have the stakeholder involvement at the level that we'd like to."Bennett said the BOEM is in a full telework arrangement right now" due toshutdowns caused by the coronavirus.

-Darrell Proctor is associate editor for POWER (@DarrellProctor1, @POWERmagazine).

The post Orsted Offshore Wind Farms Delayed by Pandemic appeared first on POWER Magazine.