· 2 min read
illuminem summarizes for you the essential news of the day. Read the full piece on The Washington Post or enjoy below
🗞️ Driving the news: Despite the promising declining cost curve for renewable energy, there has been an unexpected upward shift in the price of solar and especially offshore wind projects
🔭 The context: The cost of renewable electricity is mainly determined by the initial cost of establishing the facility, contrasting with fossil fuel where ongoing fuel costs play a significant role
• However, with rising interest rates in countries like the US, the capital projects' upfront costs have been escalating
🌎 Why does it matter for the planet: Escalating costs and regulatory hurdles threaten offshore wind projects, crucial for many regions' energy outlook
• The northeastern US, with its vast coastlines and limited sunlight, is an ideal location for these installations
⏭️ What's next: With factors like the war in Ukraine affecting steel costs, overlapping US policies exacerbating problems, and Jones Act complications, renewable energy projects face potential cancellations
• If the US administration doesn't recalibrate its climate policies and reliance on subsidies, the country may experience higher electricity costs or reduced renewable energy output
💬 One quote: "It’s wrong to assume renewable costs will inevitably fall and treat projects as piggybanks. Progress on costs happens when there is a good-faith effort to improve efficiency" (Matthew Yglesias, Economic Journalist)
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