Telegraph Piece: US offshore wind is holed and sinking
A costly solution to a non-existent problem
For better or worse, the boosters of the much-advertised energy transition decided early on to focus their subsidy strategy on a trio of voracious rent-seeking industries: Wind and solar in power generation, and electric vehicles in transportation. It is a sort of green three-legged stool that we have been assured by activists, politicians, media and the industries themselves would be able to rapidly displace villainous fossil fuels in a cheap and seamless manner.
But a funny thing has happened on the way to our new net-zero utopia, as two of the three legs of the stool have begun to show clear signs of financial distress that could render this stool highly unstable. The EV business was the first to signal that things were not going to plan early this year as unsold inventory began to pile up on dealer lots amid slowing demand, stubborn inflation, and rising interest rates.
In recent weeks, some analysts have begun to predict that peak EV adoption could happen in the next 2-3 years and top out at just 10-12 per cent of the total vehicle fleet. Distressed automakers like Ford and GM have recently announced cancellations in some big investments in plant and equipment and year-long delays in new factory openings and new model introductions.
If anything, the Big Wind industry appears to be in even deeper financial distress. In recent weeks, Siemens Energy, a major manufacturer of wind turbines, platforms and other green technologies, has sought loan guarantees from the German government of up to €16 billion ($16.9 billion), as rising costs and supply chain issues have changed the economics of its major projects, despite the generous subsidies and incentives the government has already provided. German economy minister Robert Habek says the government is prepared to support the company’s needs as a strategic asset, saying, “In terms of industrial policy, we are at a turning point, and it would be wrong to think that if you don’t face competition, we will benefit as an economy.”
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