At the end of August, Wasu Energy CEO Mas Nipper hinted at a briefing for analysts that he would withdraw from the U.S. business. He said: "If we cannot create value that meets our standards, we will withdraw from the plan." Exit."
This is because in addition to high raw material prices and surges in labor costs, interest rate increases will also lead to rising financing costs. Offshore wind power requires more components than photovoltaic power generation, the supply chain involves a wider scope, and the project cost is larger, so it is more susceptible to the impact of inflation.
Statistics from the International Renewable Energy Agency show that the levelized cost of electricity for offshore wind power in 2022 will increase by US$0.081 compared with the previous year, an increase of 3%, which is the first increase in eight years.
The situation in the United States is particularly difficult. According to Worsch Energy, the company may incur asset impairment losses of up to 5 billion Danish kroner (approximately US$700 million) in the three offshore wind power projects under construction in the United States. If the current interest rate level is maintained, impairment losses may be an additional 5 billion Danish kroner.
The United States plans to increase offshore wind power generation to 110 million kilowatts by 2050, which is equivalent to the power generation of 110 nuclear reactors, but Wo Xu's withdrawal may throw cold water on this ambitious plan.
Enterprises are now also strengthening their screening of projects. In August, the U.S. government issued a tender for three areas to develop offshore wind power in the Gulf of Mexico, but only one area won the bid. British Shell, which plans to develop offshore wind power off the coast of Massachusetts, even paid liquidated damages to terminate the contract.
In Europe, Swedish power giant Vattenfall also halted the world's largest development plan. One of its wind power projects off the coast of Norfolk, England, was originally planned to provide electricity to 1.5 million British households, but the company's CEO, Anna Burry, made the decision that it could not proceed on the grounds that "project funds may expand by up to 40%." judge.
Norwegian energy giant Statoil has also postponed indefinitely its large-scale wind power construction plan in the country's waters due to "unsustainable plans."
There has also been a trend of companies seeking to push up power purchase prices to ensure profits. Statoil and BP asked the New York State authorities to increase the purchase price of planned offshore wind power by more than 50%. But the state government rejected the two companies' proposals in October on the grounds that higher electricity bills would be detrimental to consumers. But state governments also face a strong sense of crisis because they cannot retain businesses without public support.
Although offshore wind power development has suffered setbacks in the United States and Europe, Japan still maintains strong investment willingness. Although the Japanese government lowered the price ceiling in the second tender that ended in June, oil companies, large trading companies and power giants were still present.
This is because Japan has limited impact from interest rate hikes and the price of renewable energy power generation is slightly higher than that in the United States and Europe. The person in charge of an energy company said: "The demand for clean electricity is strong and it is still worthy of investment from a long-term perspective."
If global inflation persists for a long time, it is possible to return to the previous situation of relying on renewable energy subsidies.