OMNI Features｜Elevated Turbine Costs Drive Increased Orders and Financial Performance for Western Wind Turbine Manufacturers．Ørsted and Equinor win 1.7 GW New York Auction．Trump's Antipathy Towards Turbines Coincides with First Decline in US Wind Power in 25 Years

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｜Elevated Turbine Costs Drive Increased Orders and Financial Performance for Western Wind Turbine Manufacturers
The major Western wind turbine-makers saw order intake rebound materially in 2023 amid an improving market environment, with federal tax credits in the US driving a wave of new contracts.

The 45.9 GW of new orders secured by the four largest manufacturers from Europe and US, up 44% from 2022, sets the stage for the companies to return to profitability in the coming years after a brutal period of inflation and supply chain disruption.

Denmark's Vestas Wind Systems A/S is already back in the black, swinging to a full-year operating profit of €231 million in 2023 after posting a €1.15 billion loss in 2022. Germany's Nordex SE broke even at an EBITDA[1] level in 2023 following a prior-year loss of €244 million.

｜Ørsted and Equinor win 1.7 GW New York Auction
Equinor's 810MW Empire Wind 1 and Ørsted's 924MW Sunrise Wind projects have received provisional contracts in New York's fourth offshore wind solicitation. According to New York Governor, Kathy Hochul, the projects totaling over 1700MW of clean energy, will be the largest power generation projects in New York State in over 35 years once they enter operation in 2026.

As mature projects, Empire Wind 1, located 15 miles off New York's shore, and Sunrise Wind, located more than 30 miles east of the eastern point of Long Island, have already completed most federal and state permitting milestones, including Empire Wind 1 receiving final approval of their Construction and Operations plan from the Bureau of Ocean Energy Management (BOEM).

The weighted average all-in development cost of the awarded offshore wind projects over the life of the contracts is $150.15 per MWh which is on-par with the latest market prices. Empire Wind and Sunrise Wind had previously signed deals for $83.3 per MWh, but cancelling their contracts in favour of rebidding for higher prices.

｜Trump's Antipathy Towards Turbines Coincides with First Decline in US Wind Power in 25 Years
In 2023, the wind energy generation from US utility-scale wind farms saw its first decline in 25 years. This decline was attributed to the former US President Trump's stance, who deemed renewable energy as an unreliable power source. This stands in contrast to the current Biden administration, which is actively seeking to eliminate fossil fuel dependency.

In the last century, the United States' electricity grid primarily relied on coal energy. The Biden administration has set a national goal to achieve a zero-carbon grid by 2035. According to the latest data from the Energy Information Administration (EIA), renewable energy accounted for nearly 23% of the United States' electricity generation in 2023, marking a new record. The robust growth of solar energy has offset the lackluster performance of wind, biomass, and hydropower generation.

EIA's data in Electric Power Monthly February 2024 showed that last year, wind provided 425.2 GWh of power versus 434.3 GWh in 2022, about 10% of the nation’s electricity mix, down from 10.2%. By the end of Q3 last year, the US had 146.7GW of onshore wind in operation, up from 144.2GW at the end of 2022.

Solar generated 5.6% of the nation's electricity mix, on par with hydro, and roughly one-third of coal at 15.6%, according to EIA. At 42.4%, natural gas was the leasing power source.

Note: [1] EBITDA stands for 'Earnings Before Interest, Taxes, Depreciation and Amortisation'. It is a measure of profitability. The benefit of EBITDA is that it focuses on a company's core performance rather than the effects of non-core financial expenses.
Reference: S&P Global｜renews.biz｜rechargenews