While US offshore wind, especially in the northeast, is an important part of the country’s “decarbonisation journey” Pattern Energy has no plans to invest there in the foreseeable future, CEO Hunter Armistead told Recharge.
“We have continued to look at whether, or not, that is something we should be able to step into the fray and take on as part of what we do,” he said. “So far, we have found there is a significant number of very qualified people who seem to be well-positioned to deliver on those opportunities.”
Pattern is based in San Francisco, was acquired in March 2020 by Canada Pension Plan Investment Board and later taken private.
The company is one of three prominent independent renewable power producers here shunning US offshore wind. The others are NextEra Energy Resources, the onshore solar, storage, and wind pacesetter, and AES ranking ninth.
The sector promises potential huge long-term growth this decade and beyond with President Joe Biden targeting 30GW of capacity in commercial operation by the end of 2030 versus 42MW now.
The demand is there. On 1 January, 10 states had set more than 81GW in procurement targets led by California with 25GW, New Jersey (11GW), and New York (9GW). To incent supply, the Inflation Reduction Act, the nation’s landmark climate law signed by Biden last August, provides generous long-term federal subsidies.
At this early stage, the industry is dominated by large European oil companies such as BP, Equinor, and Shell, and utility groups including EDF, Engie, Iberdrola, and RWE, not to mention global leader Orsted from Denmark, many of which have felt the squeeze on their projects. With Eversource exiting the business, Dominion and Invenergy are the only US players with major ambitions.
One reason is the high bar to entry given the very high capital requirements. Other significant challenges include lengthy development timelines and uncertain permitting outcomes, major electric grid shortcomings, over-reliance on foreign supply chains, and financial, legal, and political risks.
Armistead said Pattern is focused on its baseline onshore business in North America consisting of a multi-gigawatt solar and wind project pipeline and two ambitious major clean energy interstate transmission initiatives.
“That doesn’t mean we won’t potentially find the right moment,” he said. “We haven’t seen that we were bringing anything unique to the table versus whether it’s oil companies that already have the deep offshore resources internally, Orsted, and a few others that are just more advanced than we are.”
In Japan, Pattern gained offshore wind experience with its 112MW Ishikari project that includes energy storage under construction in Hokkaido.
In May, Pattern announced it had entered an arrangement for sale of both its directly owned Japanese renewables assets and 100% interest in affiliate Green Power Investment Corporation to NTT Anode Energy Corporation and JERA for a reported $2.2bn.
