Energy transition

Tracking the Energy Transition: Plans Fall Victim to Rising Project Costs

Several projects have been scrapped across the US as inflation causes project costs to soar, while projects in Costa Rica and Rotterdam move forward.

Wind turbines in the sea
Source: piranka/Getty Images

TotalEnergies is teaming up with Corio Generation and Rise Light and Power for the joint development of a wind project off the coast of New York and New Jersey known as the Attentive Energy One project. The project is expected to supply 1.4 GW of renewable electricity, enough to provide power for up to 1 million homes across both states. “Thanks to this project’s secured offtake price and competitive advantages such as the 40% IRA tax credit and its very competitive interconnection, Attentive Energy One project will contribute positively to our integrated power profitability target of 12% and to our ambition of more than 100 TWh of power generation by 2030,” said Vincent Stoquart, senior vice president of renewables at TotalEnergies.

Rising Costs Force Shell To Exit
Shell has exited a power purchase agreement for the planned SouthCoast wind farm off the coast of Massachusetts, according to Reuters. The supermajor has agreed to pay a penalty as opposed to continuing with the rising costs due to inflation. This announcement comes as BP and Orsted have faced $300 million and $5.6 billion impairments, respectively, on similar projects in the US.

CCS Begins in the Barnett Shale
BKV Corporation and EnLink’s first injection of carbon dioxide at a carbon capture and storage (CCS) facility in Texas was completed ahead of schedule, according to Reuters. The partnership allows EnLink to transport natural gas produced by BKV in the Barnett Shale to its Bridgeport, Texas, processing plant, where CO2 will be compressed and stored underground in a nearby well. The companies have reported the project is expected to achieve an average sequestration rate of up to 210,000 metric tons of CO2e per year over the course of the project life. BKV’s second CCS project, Cotton Cove, is expected to begin commercial operations by the end of 2024.

Heartland Scrapped in US
The Heartland Greenway pipeline project, a $3.5 billion, 1,300-mile carbon capture pipeline, has been scrapped by Navigator CO2 Ventures due to regulatory and government process issues. The pipeline was slated to run through five Midwestern states but ran into issues obtaining permits in several states including Illinois and South Dakota.

Construction Continues in Costa Rica
Construction on the Borinquen I geothermal power project in Costa Rica has now surpassed the 40% mark in construction, with commercial operations anticipated to begin in 2027. Seven production wells and five reinjection wells have been drilled as part of the project, and construction of access roads and a working water storage lagoon has been completed. The project is being developed by the Costa Rican Electricity Institute and has a planned capacity of 55 MW; a second 55-MW Unit 2 is also planned for development.

Sembcorp Explores Indonesia
Singapore-based Sembcorp Industries announced in late October it has signed a deal to explore the feasibility of green hydrogen production in Indonesia for export to Singapore, according to Reuters. The facility will partner with Indonesian state-owned utility firm PLN to produce up to approximately 100,000 tons of green hydrogen annually. The company also announced it will develop offshore wind and other capacity with Petrovietnam Technical Services for export to Singapore.

Vineyard Wind Makes Progress in Massachusetts
Prysmian Group has announced it has completed the installation and high-voltage testing activities at Vineyard Wind 1, the first utility-scale offshore wind farm in the US. The farm, more than 15 miles off the coast of Massachusetts, features 62 wind turbines that will generate 800 MW of electricity and power over 400,000 homes.

Offshore Wind Blocks for Auction in Colombia
The Colombian government will begin accepting offers in August 2024 for offshore wind blocks. This development comes as Colombian President Gustavo Petro announced his intention to wean Andean country off its dependence on fossil fuel revenues while ensuring energy self-sufficiency, according to Reuters. Wind and solar provide less than 1% of Colombia’s power generation, with more than 50 proposed projects announced in the country since 2019.

A Partnership Forms in Rotterdam
Air Products has announced it will build, own, and operate a carbon capture and carbon dioxide treatment facility at its hydrogen production plant in Rotterdam. The facility is expected to be onstream in 2026, with the blue hydrogen transported via Air Products’ hydrogen pipeline network system to ExxonMobil’s Rotterdam refinery and other customers. The project is part of long-term agreements with ExxonMobil and the Dutch state.

Carbon Free Power Project Terminated
Utah Associated Municipal Power Systems (UAMPS) and NuScale Power Corporation have announced that they have agreed to terminate the Carbon Free Power Project (CFPP). The planned six-reactor 462-MW project was anticipated to launch in 2030. Rising project costs caused several towns to pull out of the project along with concerns customers would be able to pay for the generated power, leading UAMPS and NuScale to terminate CFPP.