Is the much-hyped “energy transition” starting to crumble at its foundations now? In recent weeks we have seen the following:

• Ford Motor Company warns investors its electric vehicle division will lose $4.5 billion in 2023;
• Reports that China has commissioned another 50 GW of new coal-fired electricity generation capacity;
• The British government led by Prime Minister Rishi Sunak beginning to back away from absurdly aggressive transition timelines amid public outcry over rising energy bills and other deprivations;
• The German government continuing to reactivate mothballed coal plants and facilitating new mining for coal;
• The Scottish government forced to admit it has facilitated the felling of 16 million trees in this century to make way for new wind farms;
• The Japanese government moving to reinvigorate its own coal-fired power sector;
• Global demand for crude oil rapidly growing and outpacing supply growth, surprising all the supposed experts;
• The U.S. Department of Energy forced to admit its initial estimate of consumer “savings” from converting from gas stoves to more expensive electric models was grossly overstated.

This list could go on and on, but the macro view is clear: Everywhere one looks, the aggressive timelines and heavily subsidized plans for a rapid transition are falling apart. Nowhere is the dynamic becoming clearer than in the wind industry. (DAVID BLACKMON: Biden Raided Our Gas Reserves To Help Win An Election. Will He Do It Again?)

In an Aug. 7 report titled “Wind Industry in Crisis as Problems Mount,” the Wall Street Journal catalogues $30 billion in planned investments in new wind projects in the U.S. and elsewhere that have now been delayed due to an expanding variety of factors. “After months of warnings about rising prices and logistical hiccups, developers and would-be buyers of wind power are scrapping contracts, putting off projects and postponing investment decisions,” the story says, emphasizing that the problems are becoming especially severe in the offshore wind business that has been so heavily promoted by the Biden administration.

I wrote a story in July detailing the fact that some of the so-called “Big Oil” companies have recently made big inroads into the offshore wind business, winning bids in the U.S. and Germany for licenses to develop large projects.  But the Journal’s story quotes Anders Opedal, CEO of Norwegian oil giant Equinor, saying, “At the moment, we are seeing the industry’s first crisis.”

Along with British oil major BP, Equinor has plans in place to develop three wind farms off the Atlantic coast of New York, but recently warned state officials they would need to renegotiate power prices or the projects would not be able to obtain the needed financing. This demand by the two oil companies echoed a call by traditional wind developer Orsted in June for more subsidies from the U.K. government if its planned projects in the North Sea are to remain viable.

Make no mistake about it: Developing these offshore wind projects doesn’t come cheap. Orsted pulled out of a competitive bidding auction in Germany last month for government licenses to develop 7 GW of new offshore wind capacity when BP and French oil major TotalEnergies ran the final bids up to almost $14 billion.

“Orsted very deliberately chose not to pay record high concession prices for new offshore projects in Germany,” Orsted CEO Mads Nipper said in a post on LinkedIn. Orsted objected to the process that awarded the licenses based on the willingness of developers to pay the government for the right to develop — the same process used in oil and gas leasing all over the world — rather than the government offering more and more subsidies to incentivize development.

Therein lies the central conundrum for this subsidized transition: At some point, wind, like solar, electric vehicles and all the other rent-seeking solutions being promoted in this energy transition will have to become viable without an expectation of permanently rising subsidies, since governments already seeing their credit ratings downgraded due to overwhelming debt won’t be able to just keep printing money forever.

But, at the present moment, the business models in play do not appear to be headed for that outcome. And that’s why this energy transition seems to be falling off the rails.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

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