European oil majors seek to harness US offshore wind energy
Reuters reported that some European oil majors have made inroads into the emerging U.S. offshore wind energy market, aiming to leverage their experience of deepwater development and the crowded offshore wind arena at home. Late entrants to the offshore wind game in Europe, which began with a project off Denmark 25 years ago and is now approaching maturity, they are looking across the Atlantic at what they view as a huge and potentially lucrative new market.
Norway's Statoil has won a licence to develop a wind farm of the New York coast, is marketing its new floating turbine to California and Hawaii and is retraining some oil and gas staff to work in its wind division.
Royal Dutch Shell bid for a lease offshore North Carolina earlier this year while Denmark's DONG Energy, a wind energy pioneer which agreed to sell its oil and gas business in May, is in a Massachusetts-based offshore wind consortium, holds a lease off the New Jersey coast and has opened an office in Boston.
Offshore wind generation began in the United States late last year, ironically after the election of President Mr Donald Trump. He is sceptical about climate change, complains about subsidies for renewable energy and battled against an offshore wind farm near his Scottish golf resort.
However, a string of federal seabed leases were awarded before Trump took office and more are planned. The investment needed to get projects going is one of the biggest obstacles.
Mr Samuel Leupold chief executive of DONG Energy's offshore wind business, said that "Undeniably, offshore wind is a big boys' game because it requires large amounts of capital because scale is such an important cost driver."
While DONG has shifted decisively towards renewables, Statoil and Shell are still firmly rooted in fossil fuels and other major European oil companies, in common with their U.S. counterparts, have so far steered clear of U.S. offshore wind.
Washington estimates its potential at 2,000 gigawatts (GW), many times anticipated capacity in Europe of 25 GW by 2020, but U.S. federal subsidies expire at the end of 2019 and while they may be renewed by Congress, that is no means certain.
Costs in Europe have fallen to a level that enabled DONG to place a zero subsidy bid earlier this year, but offshore wind farms are still multi-billion dollar projects. A push into deeper U.S. waters and the bigger turbines needed to compete without subsidies will keep price tags high.
Source : Reuters