The collapse of offshore wind power is only the first step in showing why the green energy transition is not competitive in a free market.
The "clean energy transition" -- the wholesale replacement of conventional (for the most part fossil) energy with such unconventional technologies as wind and solar power -- has been the raison d'être for great masses of the well-off living in comfort in Western economies for many years. And they now are grieving. Why? Because that transition, aided with massive subsidies and guaranteed market shares and other policy subventions, is collapsing both in the United States and in Europe.
Again, why? Because unconventional energy is not and cannot be competitive. Even with the policy favoritism bestowed upon it, it imposes very large economic and environmental costs upon large numbers of ordinary working people. Let us begin with recent cancellations of offshore wind power projects in the United States. In January, "Orsted A/S recorded a ... $1.7 billion hit on its earnings as the costs of offshore wind farms, particularly in the US, keep rising." Also in January, "Shell disclosed a $996 million write-off following its withdrawal from the Atlantic Shores Offshore Wind project." In early February, the New Jersey State Board of Public Utilities "cancelled the bidding process for the state's fourth offshore wind solicitation, citing the uncertainty driven by recent federal actions affecting the industry."
It is easy enough to blame Donald Trump's recent executive order "withdraw[ing] from disposition for wind energy leasing all areas within the Offshore Continental Shelf (OCS)," but that is a mere symptom of a far more fundamental reality: Offshore wind power is even less economic than other forms of unconventional electricity; ultimately, the excess costs for all of them must be paid by power consumers and taxpayers.
Consider the Energy Information Administration's estimates of the "levelized" costs of electricity production (per megawatt-hour in year 2022 dollars) with alternative technologies. Combined-cycle natural gas generation: $42.72. "Ultra-super critical" coal: $89.33. Nuclear: $71.00. Photovoltaic solar: $36.27. Onshore wind: $31.07. Offshore wind: $100.34.
For solar and wind power, those cost estimates ignore the cost of backup generation -- $128.82 per megawatt hour (MWh) -- needed to avoid service interruptions, because solar and wind generation might not be available when needed. (Battery systems are so hugely expensive that they are irrelevant as a practical matter.) And they ignore the problem of "capacity factors," that is, the percent of the time that onshore- and offshore wind and solar facilities can be expected to generate power, respectively, 41 percent, 44 percent, and 28 percent. For combined-cycle gas, coal, and nuclear facilities, those figures are, respectively, 87 percent, 85 percent, and 90 percent.
Accordingly, the central reality is that unconventional power cannot compete a fortiori for offshore wind power. That reality is why consumers in California and New England are afflicted with the highest electricity prices in the lower 48 states. My highly conservative 2019 estimate of a full "renewables" transformation of the U.S. power sector -- even without a massive shift toward electric vehicles -- was about $500 billion per year, permanently, or about $4,000 per year per household. That does not include the environmental damage attendant upon unconventional electricity: heavy-metal pollution, wildlife destruction, noise and flicker effects, massive land use and degradation of vistas, landfill problems, and on and on. The common description of unconventional power as "clean" is political propaganda.
Let us turn now to the central "climate crisis" justification for massive subsidies and other policy favoritism bestowed upon unconventional energy. It, too, is political propaganda, as there is no evidence -- none -- of a climate "crisis" either upon us or looming large. Even the Intergovernmental Panel on Climate Change (IPCC) in its Sixth Assessment Report (AR6 at Table 12.12) concedes implicitly that there is no such crisis upon us, as every predicted adverse effect of increasing atmospheric concentrations of greenhouse gases (GHG) is driven by one scenario, "representative concentration pathway 8.5." IPCC notes (p. 238) that "the likelihood of high emissions scenarios such as RCP8.5 or SSP5-8.5 is considered low." In reality, RCP8.5 is essentially impossible.
There is little trend in the number of "hot" days since 1895; eleven of the twelve years with the highest number of such days occurred before 1960. (This is because standard textbook atmospheric physics predicts not an increase in record highs, but instead a decrease in record lows.) The U.S. Climate Reference Network data show no temperature trend over the available 2005-2023 reporting period. Global mean sea level has been increasing at about 3.3 mm per year since satellite measurements began in 1993, or about thirteen inches over the course of a century, an outcome very unlikely to prove a "crisis."
The arctic sea ice has been declining, but the degree to which anthropogenic GHG emissions are the cause is wholly unclear. There is no long-term trend in the Antarctic sea ice. U.S. tornado activity for all EF ("Enhanced Fujita") scale classes shows an no trend since 1950. The data for the period since 1970 for EF-3+ tornadoes show a downward trend. Tropical cyclones and accumulated cyclone energy show no trend since satellite measurements began in the early 1970s.
The number of U.S. wildfires shows no trend since 1985. Wildfire acreage has increased, but that has nothing to do with GHG emissions; it is the result of perverse forest management practices, for the most part, in government forests. Global acreage burned declined sharply for 1998-2015, and by about eighteen percent for the period 2003-2015 as reported by NASA.
The Palmer Drought Severity index shows no trend for the United States since 1895. There is no global drought trend over the last 120 years, and for 1950-2020 the trend is downward (Figure 2). U.S. flooding over the past century is uncorrelated with increasing GHG concentrations. IPCC in the AR6 reports low confidence (p. 1568) in the responsibility of atmospheric GHG concentrations for observed changes in the magnitude or frequency of floods at the global scale. The available data do not support the ubiquitous assertions about the dire impacts of declining pH levels in the oceans.
And then there is the basic benefit/cost question: By how much would future temperatures change were various GHG emissions reduction policies to be implemented? The following table presents those projections from the Environmental Protection Agency climate model under a set of assumptions consistent with central findings reported in the peer-reviewed literature.
Year 2100 Global Temperature Reductions of Policies Implemented by 2050
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GHG Reduction Policy Global Temperature Reduction (°C)
It can surprise no one that there is increasing political resistance to such policies because they cannot satisfy any plausible benefit/cost test. They are hugely expensive. They are advertised as a "solution" to a purported "climate crisis" for which there is no evidence. They would yield an undetectable impact on the climate -- the standard deviation of the surface temperature record is 0.11°C -- by the end of the century. They are preposterous in every dimension and should be abandoned, along with policy favoritism toward unconventional energy.