Once again, wind’s numbers have proved not to add up.
Much of the recent news about wind power has been focused on the woes surrounding the Danish company Ørsted, the world’s largest offshore wind power developer. These have been made even worse by President Trump’s decision to put a halt to the company’s Revolution Wind project off Rhode Island.
Ørsted . . . has already faced mounting challenges, including rising costs, higher interest rates, and supply chain disruptions, leading to delays and cancellations in the U.S. and other markets. The company’s market value has plummeted 87% since its January 2021 peak.
How strange: Ørsted was something of an ESG superstar, and ESG was sold as a way of reducing risk.
Oh well.
Another integral part of [Ørsted’s] journey was ensuring that ESG objectives were integrated into corporate governance. Ørsted is working to ensure sustainability is embedded across all relevant parts of its operating model so that, as the company describes it in its 2022 Sustainability Report, “every colleague, every decision and every business development pull toward the same ambition. . . .”
In 2022, Ørsted strengthened ESG criteria in its executive team’s short-term incentive remuneration scheme, giving them the same weight as financial KPIs. “It’s not salary alone that incentivizes an organization,” Krabek said, “but it is a very important tool in showing what we value as an organization.”
Indeed.
Meanwhile (via Bloomberg):
A group led by Mitsubishi Corp. withdrew from three offshore wind projects in Japan — the latest global setback for the sector.
“Tight supply chains, inflation, exchange rates, and rising interest rates” have significantly changed the outlook for offshore wind since the consortium won the sites in a 2021 government tender, Mitsubishi said in a statement on Wednesday.
Mitsubishi had headed the consortia which in 2021 had “won” the state-run auction (the first to be arranged by the Japanese government in this sector) to develop these three wind farms.
Once again, wind’s numbers have proved not to add up. This is not always true (of course, a lot hangs on what is included in those numbers), but this news is another blow to the heavily promoted notion of wind power’s irresistible rise — and of its ability to deliver cheap power.
Oh well.