GE’s 15.5MW Offshore Cap, New York’s Canceled Projects, and Colorado’s Manufacturing Wins

Allen, Joel and Phil discuss GE's decision to stop at 15.5MW for
offshore turbines, the impact of cancelled New York offshore wind
projects, challenges for Siemens Gamesa's rumored 21MW turbine, and
Colorado attracting wind manufacturing jobs. Sign up now for Uptime
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www.weatherguardwind.comIntelstor - https://www.intelstor.com Allen
Hall: Joel, we're getting close to American Clean Power up in
Minneapolis. What are the warmer destinations in the states in May?
Joel Saxum: Actually, the weather doesn't look like it's going to
be too bad. It's going to be, it's going to be what sounds like
I've been talking to some of my friends that they're, what you
would expect is a traditional spring in Minnesota. Not snow, not 80
degrees. It looks like 65. So it'll be nice where you can wear a
blazer and do your things and not sweat too much. Allen Hall: Is
that a promise, Joel, or a wish? Joel Saxum: Weather in the
Midwest, it's a wish. Bring flip flops and winter boots. Allen
Hall: And Weather Guard will be with AC 883 at ACP. And so if you
want to come talk to us, stop by, you'll see us wandering around
the halls and making all kinds of noise and reporting, recording
podcasts. If you have a company that's involved in wind energy and
you want to be on the podcast, that's a good time to talk to us.
Our podcast numbers have exploded. So there's a lot of listeners at
the moment. And if you want to get your company out in the
industry, heard of all around the world. We're a good way to do it.
We're absolutely free. And we'd love to talk to you. The other
thing that's happening which is I think going to create an
earthquake up in Minnesota is that Phil is actually going to go to
ACP. You can't believe the amount of leverage it took to get him
out of sunny California and go to Minnesota in May. We worked on it
for weeks. Joel Saxum: He'll be there though. Smiling. Philip
Totaro: This is actually something I'm pretty excited and
interested about this time though, because I've never had so much
so many potential, partners and customers show up to an event
before and so many existing ones as well, there's a lot of people
that I'm going to have. It almost feels like we're back to before
the pandemic, which is when I was, a lot more enthusiastic about
going to these these events and trade shows. There was a lot more
payback, frankly when you participated and that diminished a lot.
For obvious reasons with the pandemic and whatnot, we weren't
getting together in person. But it feels like they're starting
hopefully to create an environment that is conducive to the
industry flourishing and actually transacting some business. And so
that's what's attracting me to, to participate in this thing. I
hope that continues and, I'm happy at this point to dip my toe back
in the water of participation. Joel Saxum: So if you're in
Minnesota, be prepared for a hundred percent increase of people
that grew up next to Rick James. Allen Hall: All right, over in New
York State the offshore industry has been really hit, and this is
due to the state's third solicitation, what they call a third round
for offshore wind, and they aim to add four gigawatts offshore.
Everybody goes back in time and remembers they had all the sort of
the cancellations happened and they re bid everything at the end of
last year. That got approved, there were three projects approved,
Attentive Wind, Community Offshore Wind, and Excelsior Wind. All
those projects had just been essentially cancelled as of a couple
of days ago. I went to NYSERDA, which is a group that manages
offshore wind for the state of New York, didn't even put it on the
website. There was no press release about it. It was, they updated
the website to eliminate these projects, and somebody noted that,
hey, three projects are gone off the website. Huh, that's weird.
And they're starting to follow up on it. Yeah, it wasn't widely
announced. Attentive Wind, which is Total Energies, and Community
Offshore Wind, which is RWE, and then Excelsior Wind, which is Kof
and Hagen Infrastructure Partners those projects were canceled. And
the reason they're giving, Phil, is because GE decided not to make
an 18 megawatt turbine to stick to their existing 15. 5 megawatt
platform, and that would change the number of turbines that would
go into the water, basically the number of holes in the ground and
the ocean floor. And that was enough to reset everything. We have
to cancel it and start over again. Now, first off, let's get to the
method in which New York State went through this. They canceled
these projects because of this Turbine change. Is that the right
approach? We'll start there. Is that the right approach to cancel
projects because they use a slightly smaller turbine? Philip
Totaro: You're asking somebody, competent and who actually has an
industry domain experience. I'm going to say, no, that's not really
a good basis for doing that. And by the way, if you think my Jones
Act rants are epic, just wait. So the thing with this is, GE pulled
the plug on an 18 megawatt turbine, which necessarily triggered a
change in what the project developers had submitted, but. Normally
when a project gets bid, certainly in Europe, for example, when a
project gets bid, they bid, a maximum capacity and then like a
maximum turban size or maximum turban envelope I'm not quite sure
if New York was trying to be more specific or deliberate with
saying that, okay, if you're going to submit these bids with, this
18 megawatt turban, then it has to be an 18 megawatt turban and you
can't downscale You know that's a question that I don't think we're
ever going to get an answer to. But the, the reality of this is
that I can understand where New York's coming from a little bit.
And I've said this, that I'm putting this 80 percent on, New York,
and 20 percent on the developers as far as, culpability for why,
the projects themselves didn't get canceled. They, the companies
that still own the rights still, have the lease rights and all that
the companies have the option to rebid. It's just the OREC process
that they were engaged in. That's what got the plug pulled on it.
So just to clarify but the reality of it is that the reason that
this, the developers are partly to blame because they knew what the
rules were and they, so when they submitted the bids and it was
with. Specific number of turbines or what have you size specific
project, CapEx, PPA, et cetera, that they were asking for. If
there's a change to any of that, New York said, Hey we're not going
to allow any changes to be made. Okay. Which is one thing. And if
that's going to be a rule then that's fine, but there's also common
sense, and this is why I put 80 percent of the blame on New York
for this, which Okay, if a company who's going to manufacture a
product says we're not going to manufacture that product, we're
going to substitute something else, why is that really a problem?
Why does New York, why does it matter to New York if that's
something that happens? And this is just emblematic of you saw
their lack of willingness to negotiate with Orsted in the past and
the reality that, this is just more of the same, like New York is,
thinks that they're being clever or playing hardball or I don't
know what they think they're doing. But at the end of the day
they're wasting time. They're costing everybody more money,
including rate payers, including the project developers, because
the longer they drag this out, now a rebid of these three projects
is necessarily going to result in higher costs, probably
necessarily higher project CapEx and probably higher PPAs because.
Two reasons. One, pulling the plug on a project development
timeline and pushing it out, which New York has just done, means
that there are necessarily going to be more costs, overhead and
capex costs, that the developers have to incur. And secondly,
everyone was bidding predicated on the fact that the Federal
Reserve was going to start lowering interest rates later this year,
which now, everybody's up in the air about whether or not that's
even going to happen. You're necessarily going to see a higher PPA
price, if these guys re bid in the newly announced round 5 that New
York has just come Joel Saxum: out with. Okay, so the math works
out here basically to this. If you are using a 15. which is The
Haley Idex, right? It's scalable 14 to 16 or 12 to 16, I think,
actually. So either way I'll just go with, I'm gonna go with 15 and
we'll go with 15 megawatt machines. Either way, for every six, 18
megawatts you'd put in, you'd have to put an extra turbine in,
right? To make sure that if you were going to have the same
project, create the same amount of power, that's what the math
works out to. In the grand scheme of things cost per turbine, I
know the installation costs are a little bit more, of course,
right? Some more inter array cables and some other things, more
steel. Is that cost, does it upend the whole project? By the, by
the time you're done building it? Philip Totaro: The difference
between 15 and 18 megawatt really isn't that much. If we look at
total cost of ownership, Joel, you're absolutely right that,
there's more foundations, more cables more time with installation
vessels. Et cetera. So that does necessarily drive up the cost of a
project by a little bit. But the reality is there's a huge
difference between,