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United States has its first large offshore wind farm, with more to come
America’s first commercial-scale offshore wind farm is officially open, a long-awaited moment that helps pave the way for a succession of large wind farms.
Danish wind energy developer Ørsted and the utility Eversource built a 12-turbine wind farm called South Fork Wind 35 miles east of Montauk Point, New York. New York Gov. Kathy Hochul went to Long Island Thursday to announce that the turbines are delivering clean power to the local electric grid, flipping a massive light switch to “turn on the future.” Interior Secretary Deb Haaland was also on hand.
Achieving commercial scale is a turning point for the industry, but what’s next? Experts say the nation needs a major buildout of this type of clean electricity to address climate change.
Offshore wind is central to both national and state plans to transition to a carbon-free electricity system. The Biden administration has approved six commercial-scale offshore wind energy projects, and auctioned lease areas for offshore wind for the first time off the Pacific and Gulf of Mexico coasts. New York picked two more projects last month to power more than 1 million homes.
This is just the beginning, Hochul said. She said the completion of South Fork shows that New York will aggressively pursue climate change solutions to save future generations from a world that otherwise could be dangerous. South Fork can generate 132 megawatts of offshore wind energy to power more than 70,000 homes.
“It’s great to be first, we want to make sure we’re not the last. That’s why we’re showing other states how it can be done, why we’re moving forward, on to other projects,” Hochul told The Associated Press in an exclusive interview before the announcement.
“This is the date and the time that people will look back in the history of our nation and say, ‘This is when it changed,’” Hochul added.
South Fork will generate more than four times the power of a five-turbine pilot project developed earlier off the coast of Rhode Island, and unlike that subsidized test project, was developed after Orsted and Eversource were chosen in a competitive bidding process to supply power to Long Island. The Long Island Power Authority first approved this project in 2017. The blades for the 12 Siemens Gamesa turbines reach speeds of more than 200 miles per hour (350 kilometers per hour).
Ørsted CEO Mads Nipper called the opening a major milestone that proves large offshore wind farms can be built, both in the United States and in other countries with little or no offshore wind energy currently.
With South Fork finished, Ørsted and Eversource are turning their attention to the work they will do offshore beginning this spring for a wind farm more than five times its size. Revolution Wind will be Rhode Island and Connecticut’s first commercial-scale offshore wind farm, capable of powering more than 350,000 homes next year. The site where the cable will connect in Rhode Island is already under construction.
In New York, the state said last month it would negotiate a contract with Ørsted and Eversource for an even larger wind farm, Sunrise Wind, to power 600,000 homes. The Norwegian company Equinor was picked for its Empire Wind 1 project to power more than 500,000 New York homes. Both aim to start providing power in 2026.
After years of planning and development, 2024 is a year of action— building projects that will deliver sizeable amounts of clean power to the grid, said David Hardy, group executive vice president and CEO Americas at Ørsted.
Ørsted, formerly DONG Energy, for Danish Oil and Natural Gas, started aggressively building wind farms off the coast of Denmark, the U.K. and Germany in 2008. The company sold off the North Sea oil and gas assets on which it had built its identity to focus on clean energy, becoming Ørsted. It’s now one of the biggest wind power developers.
The first U.S. offshore wind farm was supposed to be a project off the coast of Massachusetts known as Cape Wind. A Massachusetts developer proposed the project in 2001. It failed after years of local opposition and litigation.
Turbines began spinning off Rhode Island’s Block Island as a pilot project in 2016. But with just five of them, it’s not a commercial-scale wind farm.
Last year brought challenges for the nascent U.S. offshore wind industry, as Ørsted and other developers canceled projects in the Northeast that they said were no longer financially feasible. High inflation, supply chain disruptions and the rising cost of capital and building materials were making projects more expensive as developers were trying to get the first large U.S. offshore wind farms opened.
Industry leaders expect 2024 to be a better year, as interest rates come down and states ask for more offshore wind to meet their climate goals.
The nation’s second large offshore wind farm, Vineyard Wind, is expected to open later this year off the coast of Massachusetts, too. The first five turbines are providing power for about 30,000 homes and businesses in Massachusetts. When all 62 turbines are spinning, they’ll generate enough electricity for 400,000 homes and businesses. Avangrid and Copenhagen Infrastructure Partners are the joint owners of that project.
The Biden administration wants enough offshore wind energy to power 10 million homes by 2030. Interior Secretary Haaland said that “America’s clean energy transition is not a dream for a distant future— it’s happening right here and right now.”
Wholesale prices picked up in Feb. in sign that inflation pressures remain
WASHINGTON | Wholesale prices in the United States accelerated again in February, the latest sign that inflation pressures in the economy remain elevated and might not cool in the coming months as fast as the Federal Reserve or the Biden administration would like.
The Labor Department said Thursday that its producer price index — which tracks inflation before it reaches consumers — rose 0.6% from January to February, up from a 0.3% rise the previous month. Measured year over year, producer prices rose by 1.6% in February, the most since last September.
The figures could present a challenge for the Fed, which meets next week and is counting on cooling inflation as it considers when to cut its benchmark interest rate, now at a 23-year high. The Fed raised rates 11 times in 2022 and 2023 to fight high inflation. A rate cut by the Fed could boost the economy and financial markets because it would likely ease borrowing costs over time for mortgages, auto loans and business lending.
Higher wholesale gas prices, which jumped 6.8% just from January to February, drove much of last month’s increase. Wholesale grocery costs also posted a large gain, rising 1%.
Yet even excluding the volatile food and energy categories, “core” inflation was still higher than expected in February. Core wholesale prices rose 0.3%, down from a 0.5% jump the previous month. Compared with a year ago, core prices climbed 2%, the same as the previous month. Core inflation, which tends to provide a better sign of where inflation may be headed, is watched particularly closely.
Persistently elevated inflation could become a threat to President Joe Biden’s re-election bid, which is being bedeviled by Americans’ generally gloomy view of the economy. Consumer inflation has plummeted from a peak of 9.1% in 2022 to 3.2%. Yet many Americans are exasperated that average prices remain about 20% higher than they were before the pandemic erupted four years ago.
The producer price index can provide an early read on where consumer inflation is headed. It is also closely watched because some of its data is used to compile the Fed’s preferred inflation gauge, known as the personal consumption expenditures price index.
Thursday’s producer price index report suggested that core prices in the Fed’s gauge rose 0.3% last month, according to economists at Capital Economics, and are up 2.8% compared with a year ago. The year-over-year measure, if accurate, would be unchanged from the previous month.
A separate report Thursday showed that retail sales grew 0.6% from January to February, after a sharp fall of 1.1% the previous month. The data points to cooling consumer demand, with many consumers having run through their pandemic-era savings and putting more spending on credit cards.
A more cautious consumer could provide some reassurance to the Fed that the economy is cooling a bit, a trend that could potentially lower inflation over time.
Thursday’s data follows a report earlier this week on the government’s most closely watched inflation measure, the consumer price index. The CPI rose by a sharp 0.4% from January to February, a faster pace than is consistent with the Fed’s 2% inflation target. Compared with a year earlier, prices rose 3.2%, up from a 3.1% increase rise the previous month.
The CPI report, which marked the second straight pickup in consumer prices, illustrated why Fed officials have signaled a cautious approach toward implementing rate cuts. After meeting in January, the officials said in a statement that they needed “greater confidence” that inflation was steadily falling to their 2% target level. Since then, several of the Fed’s policymakers have said they think inflation will keep easing.
Inflation had been expected to tick higher in January and February, in part because companies typically impose price increases at the beginning of the year. Though the government’s seasonal adjustment process is supposed to account for such regular annual patterns, it doesn’t always do so perfectly.
Still, February’s acceleration in producer prices suggested that inflation could stay elevated into the spring. Economists and Wall Street traders expect the Fed to cut its benchmark rate in June, but that could slip into later in the year.
In December, the policymakers had signaled they would reduce their rate three times this year. On Wednesday, the officials will issue new quarterly projections that could either maintain or revise that forecast.
Last week, Fed Chair Jerome Powell signaled to Congress that the central bank was “not far” from starting rate cuts.
Solid spending and hiring so far this year show that the economy has stayed healthy despite the Fed’s aggressive series of rate hikes. Last month, employers added a solid 275,000 jobs, the government reported. And though the unemployment rose by two-tenths to a still-low 3.9%, it has remained below 4% for more than two years — the longest such stretch since the 1960s.
Federal officials investigating a tire problem American Airlines flight
FORT WORTH, Texas | Federal officials are investigating an incident in which an American Airlines plane flying from Dallas to Los Angeles suffered a tire problem, just a week after a United Airlines jetliner lost a tire during takeoff.
The Federal Aviation Administration said Thursday that preliminary information indicated that American flight 345 “blew a tire” during takeoff from Dallas-Fort Worth International Airport but said later “the crew reported a flat tire.” American said the pilots got a warning of low pressure in one of the tires.
The Boeing 777 landed safely and taxied to the gate under its own power, American said.
That model of plane has 14 tires to handle the pressure of takeoffs and landings: six on each of the two main landing gear assemblies and two more under the nose landing gear. The FAA is also investigating an incident last week in which a United Airlines Boeing 777 lost a tire during takeoff in San Francisco and cut short a flight to Japan, landing safely at Los Angeles International Airport.
Both planes in the recent incidents are more than 20 years old.
Number of Americans filing for jobless benefits remains low
The number of Americans applying for jobless benefits last week inched up but largely stayed at historically low levels as the labor market continues to thrive despite elevated interest rates.
The Labor Department reported Thursday that filings for unemployment claims for the week ending March 9 ticked down by 1,000 to 209,000 from the previous week’s 208,000.
The four-week average of claims, which evens out some of the weekly volatility, came in at 208,000, a decrease of 500 from the previous week.
In total, 1.81 million Americans were collecting jobless benefits during the week that ended March 2, an increase of 17,000 from the previous week. Last week’s number, which had been the most since November, was revised down by 112,000.
Weekly unemployment claims are considered a proxy for the number of U.S. layoffs in a given week. They have remained at historically low levels since the pandemic purge of millions of jobs in the spring of 2020.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in an effort to bring down the four-decade high inflation that took hold after the economy roared back from the COVID-19 recession of 2020. Part of the Fed’s goal was to loosen the labor market and cool wage growth, which it believes contributed to persistently high inflation.
Many economists thought the rapid rate hikes could potentially tip the country into recession, but that hasn’t happened. Jobs have remained plentiful and the economy has held up better than expected thanks to strong consumer spending.
In February, U.S. employers added a surprising 275,000 jobs, again showcasing the U.S. economy’s resilience in the face of high interest rates.
At the same time, the unemployment rate ticked up two-tenths of a point in February to 3.9%. Though that was the highest rate in two years, it is still low by historic standards. And it marked the 25th straight month in which joblessness has remained below 4% — the longest such streak since the 1960s.
The unemployment rate is 3.9%, and has been below 4% for 25 straight months, the longest such streak since the 1960s.
Though layoffs remain at low levels, there has been an uptick in job cuts recently, mostly across technology and media. Google parent company Alphabet, eBay, TikTok, Snap, and Cisco Systems and the Los Angeles Times have all recently announced layoffs.
Outside of tech and media, UPS, Macy’s and Levi’s also recently cut jobs.
—From AP reports
