Offshore Wind Farm Financing Grows

Pushes from the Biden administration and coastal states have been a wind at the back of offshore wind farm development. States want offshore wind development for the economic and renewable energy benefits, and producers want to tap into high demand and access to funding. 

From Environment America

Offshore wind farms used to be seen as too expensive. But thanks to advances in wind turbines, drones and robotics that can help inspect and maintain assets, and financing incentives, developers are bidding for the chance to get in on wind. 

A federal auction for the rights to develop wind farms off the New York City coastline generated a record $4.4 billion, a Carolina auction just landed $315 million, and there are six more auctions scheduled by the Biden administration through the end of next year.

The cost of each MWh of wind production continues to decrease, and those drops are supported by tax credits—both production tax credits (PTCs) and investment tax credits (ITCs)—and an increase in availability for funding as investors and lenders grow more confident in the likelihood of returns. 

Is there an environmental bent behind these wind farms? We can hope so. But: “Ultimately it comes down to the money,” said Samantha Bobo, an analyst with the research firm S&P Global. 

Let’s just hope financial and environmental incentives continue to align.