Easy win in small battle for Trump in his war on wind, where everyone's on their own
As energy prices skyrocket across the US, Trump’s war on wind just makes matters worse as his enemies retreat to safer waters.
Recharge reported on Tuesday that the JERA Nex BP joint venture are giving up their effort to build the Beacon Wind project, located in federal waters between Cape Cod, Massachusetts, and Long Island, New York.
Thus ends an adventure that began when the oil giant BP entered the US offshore wind market to great fanfare in 2020. The entire JERA Nex BP team will dissolve in the US as the joint venture ends its operations in the country.
In Trump’s war on wind, this is another win.
It is less than a year since the Japan-based JERA Group and BP announced their 50-50 offshore wind joint venture, which they wanted to be a “leading global offshore wind developer, owner and operator”. At the time, the two had a total of 13GW of capacity in different stages of development. Just under 20% of this was the Beacon Wind project, which started out as a joint project between Equinor and BP.
“Unfortunately, in the present environment we see no viable path to the development of our Beacon wind project and have concluded that we cannot continue our investment in the market”, the company stated on Tuesday.
The project had a potential capacity of 2.4GW, which would have produced just under 10 TWh, depending on capacity factors.
How the consumers of electricity on the US East Coast could have enjoyed those watt-hours. Beacon Wind could have increased available power in New York State alone by more than 6 percent.
That would have driven prices down significantly.
So, while JERA Nex and BP are the immediate biggest losers in this battle for Beacon Wind, the ultimate cost will be felt by customers on the east coast.
In hindsight, it is not a great surprise that JERA Nex BP pulled the plug in the end. Since the project is in federal waters, it fell foul of Trump’s direct attack earlier this year. In short, everything will be stopped, citing security reasons.
Beacon Wind was also already heading to the bin for financial reasons. It was not scheduled to deliver power to the grid anytime soon.
Yet, with electricity demand rising in the US, now could have been a perfect time for developers to launch new projects.
Instead, they flee as Trump’s preference for coal and fossil fuels make US one of the least stable markets in the world to invest in right now.
With still three years to the next presidential election, it is not very appealing for JERA Nex BP to stay in the US.
However, it also means that the industry is crumbling under the pressure of Trump. I previously wrote an opinion piece about the importance to stand up to the president, as he will bulldoze anyone who tries to just bend over.
Equinor has so far succeeded by diplomacy – but also a threat of court action. Orsted is left in the same, difficult position.
And this might be the problem: It’s not really a united industry. It’s each single company out on its own. There’s no industry group strong enough to take the fight to Trump. He can simply threaten and block as he sees fit.
There are more battles being fought in this war. It’s not over yet. But it doesn’t look too good.
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