US Offshore Wind Casualties
The hyped up U.S. offshore wind market has, so far, been underwhelming.
Major offshore wind energy companies—including Orsted, Eversource, and Shell—-collectively took $10 billion in sector-related write-downs, impairments, and cancellation penalties. Of course, these companies did not accept large scale losses without putting up a fight to protect their investments.
A cost-cutting, investment-protecting tactic: undermining a $246 million ship called the Acadia, a Jones Act compliant subsea rock installation vessel (SRIV) currently under construction at Philly Shipyard at the order of Great Lakes Dredge & Dock (GLDD).
The bet for this tactic: the Acadia would have a competitive advantage in being the only Jones Act (U.S.-built, U.S.-owned, U.S.-crewed) vessel to transport rocks from the U.S. to solidify the sea floor foundations of offshore turbines in U.S. territorial waters.
The snafu: a recent appeals court ruling deemed that foreign-built vessels can transport rocks from the U.S. and deposit them on the U.S. seafloor without violating the Jones Act during the initial phase of construction.
The competition: a similar Ulstein-designed SRIV, the Flintstone, built in Singapore at a construction cost of $142 million—over $100 million cheaper than the Acadia, rendering it uncompetitive with the Jones Act requirement waived.
The irony: the American Petroleum Institute, representing America’s oil and natural gas industry, took the legal action to successfully advocate for non-U.S. vessels constructing U.S. renewable offshore wind energy.
