Ringside: Floating Offshore Wind – A Financial and Environmental Catastrophe

Earlier this year, the California Coastal Commission released a report titled “Statewide Strategy for the Coexistence of California Fishing Communities and Offshore Wind Energy.” In addition to providing a “guiding framework” to protect California’s fishing communities, it “presents a roadmap for proposed offshore wind projects to become consistent with California’s relevant Coastal Act policies that recognize and protect marine resources.”

Before considering the immensity of that challenge, let’s review the projected total financing cost per kilowatt-hour for floating offshore wind installations.

According to the National Renewable Energy Laboratory (NREL), the cost to procure and install floating offshore wind is $7,349 per kilowatt of capacity. It is cited on pages 7, 40, and 43 in the NREL publication “NREL Cost of Wind Energy Review: 2024 Edition.” This cost is based on economies of scale, insofar as the NREL report is specifically evaluating costs for the “Pacific Coast floating project,” assuming 12 megawatt turbines.

California’s official state goal for floating offshore wind is to develop 25 gigawatts of capacity. That equals a construction cost of $184 billion dollars. Add to that the California Energy Commission’s estimate of $12 billion to construct and upgrade ports and staging areas, and, from the California Independent System Operator, $36.5 billion to install the required new transmission lines, substations, and grid interconnections. Finally, an absolute best case scenario for the necessary battery storage to achieve baseload power, based on NREL data, is another $16 billion.

Altogether, the total project cost for California’s planned offshore wind developments is $248 billion, or not quite $10 billion per gigawatt of capacity. The financing cost for this sum at 4 percent interest and a 20 year term is $18.3 billion per year. If we assume a 40 percent yield for these intermittent sources of energy (that’s optimistic, when onshore wind farm yields are closer to 25 percent), the completed project will produce 10 gigawatts of baseload power, which is equal to 87,600 gigawatt-hours per year. That is 87.6 billion kilowatt-hours, generated at an annual project financing cost of $18.3 billion, and that’s equal to $0.21 per kilowatt-hour. This is a best case wholesale price, before construction cost overruns, ongoing costs for operations and maintenance, and retail markups (adding about $0.20/kWh) to cover distribution, utility overhead, and regulatory charges.

Compare this to the financing cost per kilowatt-hour to build a modern combined cycle natural gas power plant. The latest estimates from U.S. EIA put the construction cost at $2,500 per kilowatt of capacity, and baseload natural gas power plants can easily deliver uptimes of 90 percent. Under the same terms, the financing cost for natural gas is $0.05 per kilowatt-hour, one fifth as much. As for fuel costs? They’re surprisingly low, ranging between $0.02 and $0.4 per kilowatt-hour, depending on market prices.

But offshore wind isn’t just a financial catastrophe quietly moving toward realization. At 12 megawatts per turbine, achieving 25 gigawatts of capacity would require 2,083 of these monstrosities floating in the water offshore. Each would be 800+ feet high from the waterline to the tip of a rotor blade in vertical position. Each would require tethering cables to the ocean floor, more than 4,000 feet down, as well as high voltage underwater cables to transmit electricity 20 miles to onshore substations.

It does not require an expert to appreciate the mess this is going to make, but experts have critiqued the impact of offshore wind farms. A 2024 report claims underwater noise from surveying and installation reaches 200–240 decibels, enough to deafen marine mammals and cause fatal injuries to fish. It also points to North Sea data suggesting major fishery declines following wind development, along with concerns about ocean contamination from turbine blade corrosion releasing toxic substances like bisphenol A.

A separate August 2023 report from a New England fishermen association highlights additional risks. Wind farms increase sea surface temperatures and alter upper-ocean hydrodynamics in ways scientists do not yet understand. They create wakes several kilometers in length that may disrupt phytoplankton, the base of marine food chains. Operational noise from turbines, concentrated in low frequencies (between 2-200 Hz), overlaps with the sounds fish use for communication, mating, spawning, and navigation. Electromagnetic fields from high-voltage undersea cables generate magnetic and electromagnetic fields that distort the drifting paths of haddock larvae and cause birth deformities in juvenile lobsters.

These studies primarily examine offshore wind impact in the North Sea and off the U.S. East Coast. So where are California’s powerful environmentalists? Where is Greenpeace? Where is the Surfrider Foundation? Why are they silent? How, for example, are migrating whale species expected to navigate an obstacle course hundreds of miles in extent, with thousands of underwater tethering and high voltage cables and nonstop low frequency sound? How can environmentalists who object to virtually anything affecting the earth, sea, or sky, tolerate this abominable, gargantuan industrialization of our coast and coastal waters?

In the California Coastal Commission’s recent report, 440 pages long, a search for the words “Cetacean” and “whale” came up with zero results. Yet one of this report’s stated objectives is for “wind projects to become consistent with California’s relevant Coastal Act policies that recognize and protect marine resources.”

The Coastal Commission has aggressively restricted any form of development on the California coast, and yet they take a supportive position on floating offshore wind, a project that by any reasonable assessment is an environmental and financial catastrophe.

That any state agency is still putting resources into support for floating offshore wind development is a stomach churning betrayal of everything Californians are supposed to care about, from opportunities for working families to be able to afford energy, to the precarious health of our marine ecosystems.