The Bill for Offshore Wind Power Is Rising
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,599,192 (-0.51%)       Melbourne $986,501 (-0.24%)       Brisbane $938,846 (+0.04%)       Adelaide $864,470 (+0.79%)       Perth $822,991 (-0.13%)       Hobart $755,620 (-0.26%)       Darwin $665,693 (-0.13%)       Canberra $994,740 (+0.67%)       National $1,027,820 (-0.13%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $746,448 (+0.19%)       Melbourne $495,247 (+0.53%)       Brisbane $534,081 (+1.16%)       Adelaide $409,697 (-2.19%)       Perth $437,258 (+0.97%)       Hobart $531,961 (+0.68%)       Darwin $367,399 (0%)       Canberra $499,766 (0%)       National $525,746 (+0.31%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 10,586 (+169)       Melbourne 15,093 (+456)       Brisbane 7,795 (+246)       Adelaide 2,488 (+77)       Perth 6,274 (+65)       Hobart 1,315 (+13)       Darwin 255 (+4)       Canberra 1,037 (+17)       National 44,843 (+1,047)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,675 (+47)       Melbourne 7,961 (+171)       Brisbane 1,636 (+24)       Adelaide 462 (+20)       Perth 1,749 (+2)       Hobart 206 (+4)       Darwin 384 (+2)       Canberra 914 (+19)       National 21,987 (+289)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $770 (-$10)       Melbourne $590 (-$5)       Brisbane $620 ($0)       Adelaide $595 (-$5)       Perth $650 ($0)       Hobart $550 ($0)       Darwin $700 ($0)       Canberra $700 ($0)       National $654 (-$3)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $730 (+$10)       Melbourne $580 ($0)       Brisbane $620 ($0)       Adelaide $470 ($0)       Perth $600 ($0)       Hobart $460 (-$10)       Darwin $550 ($0)       Canberra $560 (-$5)       National $583 (+$1)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,253 (-65)       Melbourne 5,429 (+1)       Brisbane 3,933 (-4)       Adelaide 1,178 (+17)       Perth 1,685 ($0)       Hobart 393 (+25)       Darwin 144 (+6)       Canberra 575 (-22)       National 18,590 (-42)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 6,894 (-176)       Melbourne 4,572 (-79)       Brisbane 1,991 (+1)       Adelaide 377 (+6)       Perth 590 (+3)       Hobart 152 (+6)       Darwin 266 (+10)       Canberra 525 (+8)       National 15,367 (-221)                HOUSE ANNUAL GROSS YIELDS AND TREND         Sydney 2.50% (↓)       Melbourne 3.11% (↓)       Brisbane 3.43% (↓)       Adelaide 3.58% (↓)     Perth 4.11% (↑)      Hobart 3.78% (↑)      Darwin 5.47% (↑)        Canberra 3.66% (↓)       National 3.31% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.09% (↑)        Melbourne 6.09% (↓)       Brisbane 6.04% (↓)     Adelaide 5.97% (↑)        Perth 7.14% (↓)       Hobart 4.50% (↓)       Darwin 7.78% (↓)       Canberra 5.83% (↓)       National 5.76% (↓)            HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.7% (↑)      Melbourne 0.8% (↑)      Brisbane 0.4% (↑)      Adelaide 0.4% (↑)      Perth 1.2% (↑)      Hobart 0.6% (↑)      Darwin 1.1% (↑)      Canberra 0.7% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.4% (↑)      Brisbane 0.7% (↑)      Adelaide 0.3% (↑)      Perth 0.4% (↑)      Hobart 1.5% (↑)      Darwin 0.8% (↑)      Canberra 1.3% (↑)        National 0.9% (↓)            AVERAGE DAYS TO SELL HOUSES AND TREND         Sydney 28.7 (↓)       Melbourne 30.7 (↓)       Brisbane 31.0 (↓)       Adelaide 25.4 (↓)       Perth 34.0 (↓)       Hobart 34.8 (↓)       Darwin 35.1 (↓)       Canberra 28.5 (↓)       National 31.0 (↓)            AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 25.8 (↓)       Melbourne 30.2 (↓)       Brisbane 27.6 (↓)       Adelaide 21.8 (↓)       Perth 37.8 (↓)       Hobart 25.2 (↓)       Darwin 24.8 (↓)       Canberra 41.1 (↓)       National 29.3 (↓)           
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The Bill for Offshore Wind Power Is Rising

Prices in recent offshore auctions have increased by anywhere from 20% to 70%

By CAROL RYAN
Thu, Nov 23, 2023 10:30amGrey Clock 3 min

With offshore wind projects bleeding cash, governments will have to pay more to hit their clean-energy targets. Recent auctions show just how much more.

Higher prices for steel, labor and debt financing have raised the cost of developing a wind farm by almost 40% since 2019. It is a big problem for developers like Danish energy company Ørsted, which signed power supply agreements a few years ago at prices that no longer cover today’s costs.

Developers’ struggles are having a knock-on effect on the turbine makers that supply them, including Vestas, GE and Siemens Energy. The latter’s wind unit, Siemens Gamesa, lost €4.3 billion in the company’s latest fiscal year, equivalent to $4.7 billion at current exchange rates—although its issues are mainly with faulty onshore turbines rather than offshore ones.

Germany last week stepped in with a multi-billion-euro state-backed guarantee for Siemens Energy, which told investors at a capital markets day on Tuesday that its wind division won’t make a profit until after 2026. GE says its offshore wind business will lose $1 billion this year, and the same again in 2024.

The industry’s deepest challenges are in the U.S., a market that was meant to be the next growth frontier following the Biden administration’s pledge to install 30 gigawatts of offshore capacity by 2030. Instead, developers are taking multibillion-dollar impairments on U.S. projects, or backing out entirely. According to BloombergNEF, of the 21.6 gigawatts of offshore wind power awarded or signed so far in the U.S., a quarter has been canceled and almost another third is at risk.

Governments are now responding by topping up the prices at which they auction off licenses. Britain was forced to raise its guaranteed price for offshore wind power by 66% after a September auction didn’t attract a single bid. The average price in New York’s latest offshore wind auction in October was a fifth higher than previous rounds, according to BloombergNEF, and the bill could rise further as new contracts include inflation protection that will shield developers from future cost pressures.

Paying higher, more flexible prices for fresh contracts might still end up being a cheaper solution for New York than renegotiating old ones. Developers including BP and Equinor asked for increases of 49% on average over what was agreed in their original power supply contracts. They may pull out after getting a no from the state.

Governments and companies had become used to the cost of renewable energy heading only one way. The global average levelized cost of electricity generated by offshore wind—a measure of the minimum price necessary to cover the lifetime costs of a project—has plunged by 66% since 2009, according to BloombergNEF data.

After years of becoming more competitive as a source of power, offshore wind is beginning to look expensive in some markets compared with fossil-fuel alternatives. Globally, new offshore wind projects still work out cheaper than natural gas ones and are level with coal. But offshore wind looks costly in the U.S., partly because the supply chain is so immature and will need heavy investment for several years.

The new reality makes it harder for governments to meet their net-zero targets while also keeping power costs low for the public. But densely populated areas like New York may not have much choice but to exploit offshore wind. Clean alternatives such as land-based wind and solar farms are tough to roll out where space is at a premium.

The European Union is also aware that if governments don’t do more to support local companies like Siemens Energy, Chinese turbine manufacturers that enjoy generous subsidies from Beijing will be only too happy to step in. This would help the EU stay on track with an ambitious plan to increase its offshore wind capacity sevenfold by 2030, but at the expense of the bloc’s energy independence.

Harnessing the winds out at sea is still a key part of countries’ plans to cut their carbon emissions and boost energy security. But governments can no longer pretend that these political objectives can come cheap.



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Companies Say Push to Decarbonise Comes From Their Own Boards

Call to cut corporate carbon footprints is loudest from inside organizations, outweighing demand from customers and regulators, survey finds

By YUSUF KHAN
Sun, Mar 3, 2024 2 min

The pressure on companies to cut their carbon footprint is coming more from within the organisations themselves than from customers and regulators, according to a new report.

Three-quarters of business leaders from across the Group of 20 nations said the push to invest in renewable energy is being driven mainly by their own corporate boards, with 77% of U.S. business leaders saying the pressure was extreme or significant, according to a new survey conducted by law firm Ashurst.

The corporate call to decarbonise is intensifying, Ashurst said, with 30% of business leaders saying the pressure from their own boards was extreme, up from 25% in 2022.

“We’re seeing that the energy transition is an area that is firmly embedded in the thinking of investors, corporates, governments and others, so there is a real emphasis on setting and acting on these plans now,” said Michael Burns, global co-head of energy at Ashurst. “That said, the pace of transition and the stage of the journey very much depends from business to business.”

The shift in sentiment comes as companies ramp up investment in renewable spending to meet their net-zero goals. Ashurst found that 71% of the more than 2,000 respondents to its survey had committed to a net-zero target, while 26% of respondents said their targets were under development.

Ashurst also found that solar was the most popular method to decarbonise, with 72% of respondents currently investing in or committed to investing in the clean energy technology. The law firm also found that companies tended to be the most active when it comes to renewable investments, with 52% of the respondents falling into this category. The average turnover of those companies was $15.1 billion.

Meanwhile, 81% of energy-sector respondents to the survey said they see investment in renewables as essential to the organisation’s strategic growth.

Burns said the 2030 timeline to reach net zero was very important to the companies it surveyed. “We are increasingly seeing corporate and other stakeholders actively setting and embracing trajectories to achieve net zero. However, greater clarity and transparency on the standards for measuring and managing these net-zero commitments is needed to ensure consistency in approach and, importantly, outcome,” he said.

Legal battles over climate change and renewable investing are also likely to rise, with 68% of respondents saying they expect to see an increase in legal disputes over the next five years, while only 16% anticipate a decrease, the report said.

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