The Biden administration announced Friday that it will expand tax credits to encourage offshore wind projects, according to Politico.
The tax credits are intended to offset rising interest rates and soaring steel prices that are making offshore wind projects more expensive, Politico said. report. The Treasury Department has announced that undersea cables that connect wind farms to the power grid will be eligible for tax credits under the Inflation Control Act. according to Go to E&E News. (Related: Kevin O’Leary reveals why clean energy stocks are plummeting)
The Treasury ruling makes these projects eligible for a 6% base credit, and companies must meet other criteria, such as paying the “prevailing wage,” locating the project within a specific region, and using domestic materials. Additional credits may be available, E&E News reported.
Danish offshore wind energy company Orsted has announced that it will shut down two wind farms it is building off the coast of New Jersey on October 31st due to worsening financial difficulties.
This photo taken on March 4, 2021 shows a commercial vessel sailing between the turbine towers of an offshore wind farm off the coast of South Korea. (Jung Young Jae/AFP via Getty Images)
David Hardy, CEO of Orsted Americas, said of the decision to halt the project: “High inflation, rising interest rates and supply chain bottlenecks will impact long-term capital investment, and macroeconomic factors will “It’s changed dramatically in a short period of time.” “As a result, we have been forced to discontinue development of Ocean Wind 1 and Ocean Wind 2.”
Other major companies involved in offshore wind power include: siemens General Electric Co. has announced a loss outlook or is seeking emergency funding.
More than $7 billion has been invested in offshore wind projects since President Joe Biden signed the Anti-Inflation Act in August 2022. according to The White House aims to decarbonize the U.S. economy by 2050.
The Biden administration is also investigating whether offshore wind farms are causing abnormal death rates in people. humpback whale and right Whales reported by the National Oceanic and Atmospheric Administration (NOAA).
An offshore wind lease sale in the Gulf of Mexico on August 29 failed with only one of three regions bidding. As a result, the sales could provide enough power for 450,000 homes, less than 50% of the amount the Biden administration expected all three regions could generate.
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