Major Wyoming Wind Project Delayed A Year Over Turbine Troubles

[Think. Again.]

8. This might have something to do with it...

I mentioned that I've read about other wind projects being stopped for "financial" reasons.

It seems that a few very large projects in the UK have recently claimed that unexpected construction costs are why they are being halted and as I read further I found this from:
https://www.itv.com/news/anglia/2023-07-20/energy-firm-pulls-plug-on-major-wind-farm-to-power-15m-homes

For much of the past decade, offshore wind farms have been promised a fixed price for the electricity they produce through a so-called contract for difference (CfD).

This means that if electricity prices are below the promised price – known in industry jargon as the strike price – then companies get a subsidy to make up the difference.

Equally, if prices rise above that level then they have to pay back their additional gains.

Last year Vattenfall won one of these contracts to build the Norfolk Boreas wind farm at a joint record-low strike price of £37.35 per megawatt hour.

But since winning the auction, Vattenfall and others have warned that costs have increased far too fast for these projects to be economical anymore.

In March, Denmark’s Orsted warned that it might pause the Hornsea 3 project in the UK – expected to be the world’s largest wind farm when it opens – unless it gets help with surging costs. Hornsea 3 has the same £37.35 per MWh strike price as Norfolk Boreas.

So, apparently the installation of these off-shore projects was based on a promised fixed-price (strike-price) for the energy they would produce when completed, a price which would make it possible for the project to be completed based on construction costs at the time of the contract. However, that price is also a top LIMIT to what would be paid for the energy, and does not adjust for any variations in construction costs or inflation.

Recent higher construction costs would normally mean the energy produced would then have to sell for a higher cost, but the fixed-price contract doesn't allow for that, and so the companies building the projects have cancelled, probably hoping a new contract can be agreed on.