Enbridge Shuns the U.S. Offshore Wind Sector

Canadian pipeline operator Enbridge plans to boost its presence in offshore wind in Europe but will shy away from investments in the United States, where escalating costs and supply chain problems have been plaguing projects, a top Enbridge executive told Reuters.

Enbridge, whose main business is oil and liquids transportation via pipeline, generates around 3% of its core earnings from its renewables business.

Enbridge has invested in wind energy projects in five different countries, totaling 4,870 MW (gross)—or 2,117 MW (net)—of wind-power capacity globally, based on projects either in operation or under construction. 

Enbridge has also significantly expanded its presence in European offshore wind sector since 2015. Currently, the Canadian company holds a 24.9% ownership interest in the Rampion Offshore Wind Project in England, a 49.89% ownership stake in the Hohe See and Albatros Wind Projects off the coast of Germany, and a 25.5% and 17.9% ownership stake, respectively, in France's Saint-Nazaire and Fécamp offshore wind projects.

“There will be big (offshore wind) opportunities for us of the billions of dollars in the future still in Europe,” Matthew Akman, Executive Vice President of Corporate Strategy and President of Power at Enbridge, told Reuters in an interview published on Thursday.

But the company doesn’t plan investments in U.S. offshore wind projects soon, due to supply chain and grid bottlenecks, the executive added.

“I do believe that offshore wind will be a significant contributor to the U.S. northeast energy mix over time, but it's going to take longer than everyone thought,” Akman told Reuters.

At the end of last year, Anja-Isabel Dotzenrath, Executive Vice President of Gas and Low Carbon Energy at BP, said that the U.S. offshore wind industry is “fundamentally broken” and needs a reset.

The U.S. regulatory environment is challenging for developers due to a lack of mechanisms to adjust for inflation, permitting issues, and a lag between the signing of the power purchase agreement and the construction of the projects, according to BP’s green energy boss.

Last week, BP and Equinor scrapped a deal to sell power to the state of New York from the Empire Wind 2 offshore wind farm in the Atlantic Ocean, saying the project is no longer commercially feasible.

By Charles Kennedy for Oilprice.com

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