South Fork Wind offers a glimpse at what’s possible as offshore wind power projects struggle to gain traction

Published

5 months ago

October 13, 2024

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Pippa Stevens | CNBC

GREENPORT, N.Y. – Roughly 35 miles off the east coast of Montauk, New York, 12 turbines gently spin in the wind at Orsted’s newly developed South Fork Wind farm. The project, which connected to the grid earlier this year, is the first commercial-scale offshore wind farm in the U.S., providing enough power for 70,000 homes annually.

It’s a needed bright spot for the U.S. offshore wind industry, which has faced a number of challenges getting off the ground. Rising interest rates and supply chain snags have changed project economics, forcing some developers to return to the market in search of higher contracted prices. Other projects have been canceled entirely.

Soren Lassen, head of offshore wind research at Wood Mackenzie, said the U.S. offshore wind industry is going through a needed readjustment, and that while the long-term outlook remains intact, progress has been pushed out. South Fork Wind offers tangible evidence that wind projects can work.

A long-term investment

Traveling by way of a high-speed ferry from Greenport, New York, it takes about two hours to get to South Fork Wind. It’s hard to get a sense of just how large these turbines are until you’re right under one: they tower 460 feet above the water, with blades that are each longer than a football field. And that’s just what the eye can see. Underwater, each tower sits atop a custom foundation drilled into the seabed. Apart from the gentle “swoosh” of the blades – only audible when right next to the turbine – the wind farm is otherwise quiet in the middle of the ocean.

South Fork Wind’s substation, which is connected to the power grid in East Hampton via a subsea and then underground cable.

Pippa Stevens | CNBC

Each turbine is connected to an offshore substation – the first of its kind built in the U.S. – which is connected to the local power grid in East Hampton, New York, via a 65-mile subsea and underground cable.

South Fork Wind was not without opposition. The waters off the Long Island coast have long been a place for recreational and commercial fisherman alike, some of whom opposed the project. Residents in Wainscott – the summer community where the cable comes ashore – also fought it. This led to Orsted adding extra space between each turbine so that the area remains open both to transit by pleasure and fishing boats, and the company buried the onshore cable beneath the beach and local roads.

Denmark-based Orsted is not new to the area. The company developed the five-turbine Block Island Wind Farm, which is northwest of South Fork Wind, in 2016. And northeast of South Fork Wind sits Revolution Wind – a 65-turbine project that Orsted broke ground on in 2023. In July, Orsted began construction on Sunrise Wind, which is also in federal waters off the New York coast.

Offshore wind projects are long-term investments, with work starting years before a single foundation is even drilled into the seabed. Securing the necessary permits is a lengthy process.

The Bureau of Ocean Energy Management first awarded the leases for South Fork Wind in 2013, which where acquired by Deepwater Wind. Orsted acquired the company in 2018 and partnered with Eversource Energy to start building the project. Onshore construction began in February 2022, with offshore construction following in 2023. In September, Skyborn Renewables, a Global Infrastructure Partners portfolio company, acquired Eversource’s 50% stake in both South Fork Wind and Revolution Wind.

South Fork Wind, which is 35 miles East of Montauk, New York.

Pippa Stevens | CNBC

Offshore wind developers typically use power purchase agreements, which are signed ahead of construction. Put simply, it’s a long-term agreement between the owner and a third party who agrees to pay a specific price for the power – oftentimes for 20 years or more. At South Fork Wind, the power is being sold to Long Island Power Authority.

While this model provides long-term certainty, it can also be a huge obstacle if project costs balloon. Orsted is developing Revolution Wind and Sunrise Wind, but last year it walked away from Ocean Wind 1 and 2, which were slated to be built off the coast of Atlantic City, New Jersey.

“Macroeconomic factors have changed dramatically over a short period of time, with high inflation, rising interest rates, and supply chain bottlenecks impacting our long-term capital investments,” David Hardy, CEO Americas at Ørsted, said in October 2023. “As a result, we have no choice but to cease development of Ocean Wind 1 and Ocean Wind 2.”

In May, Orsted agreed to pay New Jersey a $125 million settlement.

The financial problems are not unique to Orsted. Equinor and BP ended a joint venture to develop a project in waters off the coast of New York in January. Equinor took sole ownership of the project and re-entered the market in search of better prices – securing a deal for Empire Wind 1, but not for Empire Wind 2, which remains on pause.

High rates, supply chain struggles

The two main obstacles around building offshore wind farms are interest rates and the supply chain. Offshore wind is capital intensive: it takes a lot of money to build one of these projects in the middle of the sea, and as interest rates rose companies’ cost of capital surged. At the same time, raw material and labor costs accelerated out of the pandemic. It’s hard to begin construction without a PPA locked in, but if costs rise significantly above initial estimates, the PPA might not be high enough for the project to be feasible.

Each turbine at South Fork Wind rises 460 feet above the water.

Pippa Stevens | CNBC

Much of the supply chain is also highly specialized. There are only a few vessels in the world, for example, that can lay the underwater cables. Turbine installation vessels are also industry-specific. The offshore wind industry is not new globally, but it is in the U.S., meaning just a few years ago a domestic supply chain was virtually nonexistent.

But some of those supply chain constraints are beginning to ease as more and more projects get off the ground. Dominion Energy is building the first Jones Act-compliant turbine installation ship in Brownsville, Texas, which will be used to transport supplies to its Coastal Virginia Offshore Wind project. Once the project is completed, the ship will be contracted out to other companies.

‘Not disappearing’

Offshore wind port hubs are also popping up, including the South Brooklyn Marine Terminal, the Port of Virginia and Connecticut’s Port of New London. Orsted’s domestic supply chain now spans more than 40 states, and work for South Fork Wind took place in New York, South Carolina, Texas, Rhode Island and Connecticut, among other states.

The U.S. Department of the Interior recently approved its tenth offshore wind project – this one in Maryland – in what it called a “major milestone.” But the Biden administration’s goal of 30 gigawatts of offshore wind power by the end of this decade remains far off.

South Fork Wind’s offshore substation is the first-of-its-kind built in the U.S.

Pippa Stevens | CNBC

Vineyard Wind, off the coast of Martha’s Vineyard and Nantucket, Massachusetts, is the only other commercial-scale offshore wind project currently powering homes. Developer Avangrid had to pause construction over the summer after a blade broke off and fell into the ocean, with parts ultimately washing ashore on Nantucket beaches. GE Vernova, which made the blade, called it a “manufacturing deviation” related to “insufficient bonding” in the blade.

Two other projects – Block Island Wind Farm and Dominion’s two-turbine Coastal Virginia Offshore Wind Pilot Project – are operational, although they are much smaller, powering 17,000 and 3,000 homes, respectively.

The U.S. does have 58 gigawatts of capacity under development, according to American Clean Power, but some of those projects won’t come online for years, and there is no guarantee all of them will be built. The industry group estimates that $65 billion will be invested in offshore wind by 2030, supporting 56,000 jobs – up from 1,000 today.

“There are cycles in everything, and now we’re going through a negative cycle,” said Wood Mackenzie’s Lassen, in an interview. “That means that what is now driving the adjustments to price are, instead of success, failures.”

But Lassen is encouraged projects are pushing forward.

“The positive thing is that then there is some readjustment,” he said. “That means the sector is not disappearing. It’s bouncing back, but it is different.”

Orsted’s Block Island Wind Farm. The turbines are supported by jacket foundations, rather than the monopiles used at South Fork Wind.

Pippa Stevens | CNBC

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Environment

Tesla’s top crash safety architect quits

Published

3 hours ago

March 15, 2025

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Tesla's top crash safety architect quits

Petter Winberg Tesla crash safety architect — Petter Winberg, Tesla crash safety architect, via LinkedIn

Tesla’s top crash safety architect, who helped the automaker achieve top safety scores for its entire car line-up, announced that he is leaving the automaker after 14 years.

We are talking about Petter Winberg, Tesla’s Principal Engineer for CAE crashing safety for the last decade.

After an extensive career at Volvo and SAAB, both car brands praised for their commitment to safety, Winberg joined Tesla in 2011 to work on the “crash safety development of Model S structure and side occupant restraints.”

At the time, Tesla was still working on the Model S, its first vehicle built entirely from the ground up, considering the original Roadster was based on the Lotus Elise.

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CEO Elon Musk aimed for “Tesla vehicles to be the safest on the planet,” and Winberg took the challenge seriously.

He led the development of the vehicle body and chassis structure for Model 3 and Model Y, as well as the crash structure for Model S and Model X.

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All of these vehicles have received top safety crash scores from independent testers worldwide – quickly elevating Tesla’s brand into a leader in passive safety.

Winberg and his team deserve a lot of the credit for this.

The engineer also led the design of crash readiness and the energy-absorbing capacity of Tesla’s latest “gigacasting” and structural battery pack designs, for which he obtained patents. Other automakers have since adopted similar designs.

For those less technical who want to understand how good and respected Winberg is at Tesla, he has been working for Tesla remotely in Sweden for the last five years. That’s impressive in itself, considering how much Musk hates remote work. He previously emailed Tesla management to tell them that only exceptional employees would be eligible for an exemption to work remotely, which he would approve himself.

After 14 years at Tesla, Winberg announced last week that he is leaving (via LinkedIn):

Having developed Model S, S-DM, X, 3, Y, Y-SP as well as future crash architectures, I have decided now is the time to move on. Thank you Tesla, keep crushing it! What an incredible team, I will miss you all.

He didn’t elaborate on his reasons for leaving the automaker or announce another venture.

Electrek’s Take

While Tesla has received much criticism for the dangers of its Autopilot and “Full Self-Driving” systems, I don’t think anyone can question that Tesla vehicles perform extremely well in terms of passive safety.

Independent testing has proven it time and time again.

Tesla has led the way in taking advantage of designing electric vehicles from the ground up. Its skateboard-like powertrain design and lack of engine in the front allow for a giant crumple zone to absorb the energy in case of a crash.

A big thank you to Petter Winberg for his designs and leadership in improving Tesla’s passive safety. He has undoubtedly made the automotive industry safer and saved lives. Congratulations.

As for his departure, it’s certainly a blow for Tesla. As we previously reported, the company has suffered a significant exodus of talent over the last year, with a big part of its leadership leaving during and after a wave of layoffs last year.

Many predict that Tesla could again initiate another wave of layoffs in the coming months as its sales are crumbling worldwide.

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Environment

Tesla Model S Plaid gets smoked in drag race by Xiaomi’s cheaper SU7 Ultra

Published

6 hours ago

March 15, 2025

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Tesla Model S Plaid gets smoked in drag race by Xiaomi's cheaper SU7 Ultra

The SU7 Ultra, Xiaomi’s new flagship electric vehicle, went against a Tesla Model S Plaid in a drag race and it smoked it.

The car is ridiculously powerful, and it’s about 35% cheaper than the Plaid, which is already affordable relative to its supercar performance.

We recently released a report about how impressed we are by Xiaomi’s incredible rise in the EV market in China.

Its first vehicle, the SU7, is a smash hit. It now consistently delivers over 20,000 units a month, it has surpassed the Tesla Model 3, its closest competitor, and has a more than 30-week-long backlog of orders.

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The vehicle achieves more range and is cheaper than Model 3 while having additional features.

Last month, Xiaomi launched a new top-of-the-line version of the SU7: the SU7 Ultra.

The headline is that the $72,800 (529,900 RMB) has a powertrain packing up 1,526 horsepower. That’s absolutely insane. Xiaomi quotes a 0 to 100 km/h (0 to 62 mph) acceleration in just 1.98 seconds.

While the SU7 is meant more as a Model 3 competitor, the SU7 Ultra actually competes with Tesla’s flagship Model S Plaid in terms of performance.

They organized a drag race between the SU7 Ultra and Model S Plaid. Here it is:

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As you can see, the SU7 Ultra slipped at the start, which is not surprising considering how much power it outputs, but it still managed to catch up and beat the Model S Plaid.

At over 1,000 horsepower, many, myself included, thought that it was a bit mad to offer a vehicle like the Model S Plaid with such supercar power for a relatively cheap price – RMB 814,900 (approximately $112,000 USD) in China and just $95,000 in the US.

But now, Xiaomi shakes things up even more by offering 1,500 horses for just a little more than $70,000. It’s mad.

Now, I can hear your thoughts: “but it’s just good in a straight line drag race like other EVs.” Think again, the SU7 Ultra prototype claimed the title as the fastest four-door sedan at the famous Nurburgring race track in Germany.

Electrek’s Take

Damn, the Chinese are good. Xiaomi has come hard with the SU7, but the crazy thing is that it’s just one of several Chinese top-of-the-line EVs coming out. Nio has the ET7, BYD has the U7, and there are many more.

These vehicles are all impressive in their own rights.

It’s easy to understand why American automakers are so scared and lobbied the US government for 100% tariffs on them.

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Environment

Trump administration sends a clear message to the oil and gas industry: ‘You’re the customer’

Published

8 hours ago

March 15, 2025

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Interior Secretary Doug Burgum: We're bringing back manufacturing and mining to the U.S.

HOUSTON — The officials leading President Donald Trump’s energy agenda made clear to oil, gas and mining executives this week that they have an ally in Washington who intends to make it as easy as possible for them to drill in federal lands and waters.

Interior Secretary Doug Burgum told executives gathered for the world’s largest energy conference that the Trump administration does not view climate change as an existential threat. Energy Secretary Chris Wright said rising global temperatures are simply a byproduct of developing the country’s national resources to support economic growth and national security.

Burgum leads Trump’s recently established National Energy Dominance Council and Wright serves as his deputy on the interagency body tasked with boosting production. Burgum was effusive in his praise of the oil and gas industry during remarks delivered at CERAWeek by S&P Global conference.

“I’m going to share two words that I do not think that you have heard from a federal official in the Biden administration during the last four years. And those two words are thank you,” said Burgum, who previously served as governor of North Dakota, a state that produces 1.2 million barrels of oil per day.

Burgum leaned on his experience as software company executive to lay out his view of the interior department’s role. The department under his leadership views the companies developing resources on federal lands as “customers” who are contributing revenue to the nation’s “balance sheet,” Burgum said.

“If someone was sending me revenue, they weren’t the enemy. They were the customer,” Burgum said. The administration loves anyone who wants to harvest timber, mine for critical minerals, graze cattle, or produce oil and gas on federals, the interior secretary said.

Royalties sent from lease agreements on federal land will help the U.S. pay down its national debt and balance the budget, Burgum said. “You’re the customer,” the interior secretary told the executives.

The value of nation’s abundant natural resources far outweighs its $36 trillion in debt, Burgum said. If financial markets understood the value of America’s natural resources, the 10-year long-term interest rate would come down, Burgum claimed.

“The interest rates right now are one of the biggest expenses we have as a country,” Burgum said. “So one of the things that we have to do is unleash America’s balance sheet, and President Trump is helping us do that,” he said.

Burgum slammed the Biden administration’s focus on climate change as an “ideology.” He said the Trump administration views Iran acquiring a nuclear weapon and China winning the artificial intelligence race as the two existential threats facing the U.S. rather than global warming. Wright said Biden had a “myopic” and “quasi religious” belief in reducing emissions that hurt consumers.

Burgum and Wright dismissed policies that support a transition from fossil fuels to renewable energy, arguing that wind and solar won’t be able to meet rising energy demand in the coming years from artificial intelligence and re-industrialization.

“There is simply no physical way that wind, solar and batteries could replace the myriad uses of natural gas. I haven’t even mentioned oil or coal yet,” Wright said at the conference. Wright previously served as CEO of oilfield services company Liberty Energy and a board member at nuclear startup Oklo.

Oil execs see allies in Washington

Oil executives are enthusiastic about the change of administrations in Washington, returning the praise they received from Trump’s energy team during the week.

ConocoPhillips CEO Ryan Lance said Wright and Burgum “understand the business,” describing them as the best energy team the U.S. has seen in decades. TotalEnergies CEO Patrick Pouyanné said he was “impressed by the quality of our counterparts.” Chevron CEO Mike Wirth said the industry is “seeing some reality come back to the conversation.”

“For years, my message has been, we need a balanced conversation about affordability, reliability and the environment, and focusing only on climate leads us to ignore the first two,” Wright said.

Energy Sec. Wright: We can get to no or very low tariffs, but it's got to be reciprocal

The executives all referred to the Gulf of Mexico as the Gulf of America, following Trump’s executive order to rename the body of water. The president issued an order on his first day to repeal Biden’s ban on offshore drilling in 625 million acres of U.S. coastal waters.

BP CEO Murray Auchincloss briefly slipped before correcting himself when discussing how generative AI is helping with exploration: “We started doing this in the Gulf of Mexico, uh America, and we spread that to other nations as well.”

But Trump’s calls to “drill, baby, drill” are running up against market reality. The CEOs of Chevron and Conoco said U.S. oil production will likely plateau in the coming years after hitting new records under the Biden administration.

“Chasing growth for growth’s sake has not proven to be particularly successful for our industry,” Wirth said. “At some point, you’ve grown enough that you should start to move towards a plateau, and you should generate more free cash flow, rather than just more barrels.”

Lance sees U.S. oil production plateauing later this decade and then slowly declining.

“Maybe it’s time to go back to exploring the Gulf of America,” Pouyanné said. “The new administration is opening the Gulf. It has been slowed down after the Macondo drama,” he said, referring the Deepwater Horizon oil spill, the largest in the history of marine drilling operations.

U.S. oil producers are scheduled to meet with Trump next week, industry lobby group American Petroleum Institute said in statement.