Winds of Change

The economics of green energy are in flux, both in the United States and globally, and proposed wind farms have suddenly become more expensive, which has prompted some industry leaders, including the Danish energy company Ørsted, to rethink aggressive strategies.

But, viewed in context, it’s a sign that wind energy has become an established option, and the costs of both labor and materials are starting to rise — in the short term, a problem, but probably a blip where the long-term viability of the technology is concerned.

As noted last week, South Fork Wind won’t be affected by these recent changes in costs: The 12 turbines are expected to be operational by the end of the year, and the costs for the project were contracted well before the recent volatility. The same is true for the eventual users of the green energy the turbines will produce, both here and throughout the Long Island Power Authority system: a 2018 contract set the rates to be paid by customers.

Still, it’s important to clarify what South Fork Wind is, and what it isn’t. It is a confident, significant step forward in beginning to move away from fossil fuels in generating electricity. It is New York State’s first commitment to the cause, and New York is in the leading pack nationally. When the turbines begin to turn, and the power starts to flow, it will be a big moment for new technology becoming a realistic measure in combating climate change.

But this investment in green energy should not be seen by consumers as a way to cut costs. In fact, ratepayers in this region are likely to see electric bills go up a bit in the beginning — the cost of innovation, the price of being at the forefront of a revolution. South Fork Wind eventually might be a harbinger of the future, which could be more economical when it comes to electricity, but that will require years of rolling adoption, and probably a decade or more of new innovations.

It’s important to know the value of this project, not just the price. It won’t be the first wind farm in the region: The one near Block Island is the first commercial offshore wind farm in the United States, and it’s been online for nearly seven years. But South Fork Wind is more than twice the size, more efficient, and it points toward a scale of operation that would truly be impactful.

That said, economic conditions have suddenly made Sunrise Wind, the even bigger proposal about 30 miles southeast of Montauk, a lot less attractive. Ørsted, for now, has nixed plans for wind farms off New Jersey, and plans in waters off Massachusetts were put on hold. The story of alternative energy is one of fits and starts, and this is clearly a “fits” stage.

And yet, many of the headwinds for utility-scale projects have little to do with the actual technology, and more to do with the cost of money: inflation and rising interest rates are making any ambitious project look a little less rosy. But don’t believe for a moment that the momentum for wind energy — and other forms of green energy — will be slowed for long.

“The timely and successful development of early-wave projects is critical to the buildout of the offshore wind supply chain in New York,” Ørsted noted. Translation: These are bumps in the road, and the few dollars a month to be paid for this pure new energy coming from offshore starting in 2024 is a privilege. This is the splash that starts the big wave. Someone had to do it — and this region did.