| Compare the cost of floating offshore wind to the cost for solar energy. Both require battery or other storage backup, adding cost, but at $1 million per megawatt of capacity at a much lower 25 percent yield, under the same terms, the financing cost for photovoltaic electricity is $0.03 per kilowatt-hour. Three cents. Seven times cheaper than floating offshore wind. |
There are at least three ways to evaluate the economic viability of energy projects. The easiest way is to just repeat whatever is in a press release. The other extreme, a mandatory exercise for anyone poised to actually invest and build a project, is to develop complex projections that take into account the benefits of tax credits, favorable depreciation treatment, other deductions and subsidies, revenue enhancements, grants — every conceivable variable that affects long-term after-tax cash flow.
There’s another method, however, that may get closer to the heart of the matter. What do the actual physical assets cost to build, and how much does it cost to operate them? After all, if subsidies and tax breaks improve a private return on investment, those costs were socialized, and the economy at-large still covers the full cost. But what if the subsidies and tax breaks are reduced or even eliminated?
This reality is playing out right now in Morro Bay, where two of the three offshore wind developers have terminated their leases. Could it be that the decision to withdraw was because, absent massive public sector incentives, the projects could not make a profit?
A few months ago I took a look at the cost for floating offshore wind, basing the analysis purely on actual construction costs as documented by official sources. Here is an updated summary – the numbers haven’t changed much:
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Artificial intelligence has moved from the realm of technological promise to the center of a global political, economic, and ethical debate. What was once seen as a neutral tool to improve efficiency and innovation is now raising fundamental questions about power, governance, security, and even the future of human freedom.
California’s oil industry has been active for well over a century, and Los Angeles was always at the heart of it. By 1894, about 80 wells were already producing oil in the city, setting off a boom that peaked in the 1970s at nearly 100 million barrels per year. Today oil production in Los Angeles County is barely one-tenth of that, and conventional wisdom holds the cause to be reservoir depletion.