NextEra CEO: Offshore wind is 'terrible energy policy'
- NextEra Energy CEO Jim Robo said the economics for offshore wind projects are bad for customers during an earnings call Monday. He said the company has not ventured into those projects because of the expensive costs and lengthy timeline, concluding that ultimately it is "terrible energy policy."
- NextEra has increasingly focused on renewable energy projects primarily in the United States, with thousands of megawatts of wind and solar controlled by subsidiary NextEra Energy Resources. But officials say there are plenty of onshore opportunities, making it unnecessary to invest in offshore resources.
- The offshore wind industry in the United States is unlikely to heed Robo's warnings, however. Recent solicitations have returned extremely low prices, and developers are gearing up to build several projects offshore the Atlantic Coast.
The U.S. offshore wind industry was practically non-existent for years, while Europe's has rapidly grown. Despite dismissing offshore wind, Robo said that NextEra's focus for renewable energy projects will be "primarily U.S. going forward." Offshore wind's costs and lengthy construction timeline soured the company's appetite for offshore wind.
"It is a moonshot in terms of building in terms of finding people who actually know what they're doing from a construction standpoint," Robo said.
But offshore wind inthe U.S. gained momentum recently: the U.S. Department of the Interior has proposed leasing two areas for wind generation offshore Massachusetts earlier this year; New York is preparing for large development; New Jersey Gov. Phil Murphy (D) signed an executive order to accelerate the development of offshore wind resources; and Massachusetts is also in the process of selecting projects.
In particular, Robo criticized the state's push for developing renewable energy, citing the state's government's rejection of several bids from NextEra for one of its RFPs. According to Robo, NextEra bid several projects — primarily solar — at $0.05/kWh for one of its renewable energy RFPs. With that in mind, Robo warned that the RFP for offshore wind will not see as cheap a project cost.
"The offshore wind RFP in Massachusetts is not going to come in at $0.05. So it is, it is just — it's bad energy policy, and it's bad business," he told analysts.
According to SNL ENergy, NextEra Energy Resources President and CEO Armando Pimentel had weighed in similarly last year.
"There are an enormous number of hurdles ... and then you get to the biggest hurdle, which is just, it is bad economics for customers," Pimentel reportedly said during a 2017 earnings call. "It is really not good for customers to be doing offshore wind relative to solar or onshore wind. So to say that we are not fans would be an understatement."
Even so, prices have been dropping. Offshore wind projects planned for Maryland have come in at $0.132/kWh, though onshore wind and natural gas prices can go lower.
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