But now the higher cost of commodities and materials is catching up with the sector, inhibiting growth and threatening delays to existing projects in the pipeline.

What’s happening: Commonwealth Wind, planned to be installed offshore Massachusetts, recently filed a motion with state Department of Public Utilities requesting an immediate suspension of the DPU’s review of power purchase agreements between the LLC and utilities for the nearly 1,200 megawatt project because it is “no longer viable” under existing contracts.

Global commodity price increases, supply chain constraints, and persistent inflation “have significantly increased the expected cost of constructing the project.”

Developers behind the 400-megawatt Mayflower Wind project said they supported Commonwealth Wind’s request and that more time was needed to address the impact of current “extraordinary global economic conditions.”

In Europe, offshore wind is having challenges of its own. New wind turbine orders fell by 36% in the third quarter compared with Q3 of last year, according to a report released Friday from industry association Wind Europe. Inflationary cost pressures, including the higher costs for raw materials, components, and shipping have risen sharply have all contributed, it said.

What about the Inflation Reduction Act?: The Inflation Reduction Act was drawn up to bring down inflation (right there in the name) by subsidizing the manufacture of green energy technologies and the production of carbon-free electricity.

Various forecasts have charted out how it can positively do that, although ironically, the law is likely an inflationary force in the near term for buttressing demand for technologies where there are already constraints on key materials and inputs like minerals.

“The US Inflation Reduction Act will usher in more energy service inflation in the next 18 months as the incentives offered to manufacturers struggle to keep up with the increased demand triggered by the bill,” analysts with Rystad Energy wrote back around the bill’s passage.

Commonwealth Wind and Mayflower Wind both said they sought a delay from the DPU in order to take a closer look at tax incentives provided in the IRA, including heartier production tax credits.

The law’s benefits to the project “are not fully known at this time” and developers want to explore how they could share any benefits with ratepayers, Commonwealth Wind said in its filing. It also said that whatever the benefits, they are “not anticipated to make the project economic absent other changes to the [power purchase agreements].”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

EUROPEANS WEIGH TRADE RETALIATION OVER ELECTRIC VEHICLE SUBSIDIES: European leaders are threatening trade retaliation over provisions in the Democrats’ Inflation Reduction Act changing subsidies for electric vehicle purchases that are meant to reshore production, Breanne writes.

European Commission Vice President Margrethe Vestager said last week that the law and tax incentives pose a great risk to some of Europe’s businesses, and Emmanuel Macron and Olaf Scholz have discussed the need for countermeasures among themselves.

“We need a Buy European Act like the Americans, we need to reserve [our subsidies] for our European manufacturers,” Macron told the news outlet France 2 last week. “You have China that is protecting its industry, the U.S. that is protecting its industry, and Europe that is an open house.”

The IRA’s revised tax credit regime for EVs requires vehicles to be assembled in North America to be eligible for the credit.

That requirement has angered the Japanese and Koreans, too, who have national manufacturers with considerable EV footprints. Most of their models would not be eligible for the credit as things stand.

FOSSIL DIVESTMENTS LIMIT ENDOWMENT GAINS: University endowment investment funds have taken on significant losses this year due to volatility in the stock and bond markets, and some institutions’ decisions to divest from oil, gas, and coal meant their funds couldn’t fully take advantage of the surge in that segment of the market, the Wall Street Journal reported.

A number of college and university endowments have decided to pull holdings from fossil fuels in recent years, including Harvard, Dartmouth, and Amherst.

Princeton also last month formally disassociated itself from dozens of fossil fuel companies, particularly those involved in thermal coal and tar sands. But it still has investment exposure to the sector overall, which has benefited its endowment this year, according to the Journal.

Stepping back: Rising oil and gas prices, driven by the war in Ukraine and associated market volatility, have pushed up the valuation of energy companies, while other sectors have struggled thanks to recessionary pressures.

The story suggests that for the benefits endowments see in giving up their fossil fuel stakes, they could well be missing out on big financial gains in years to come where and when energy commodity prices rise.

WESTINGHOUSE TO BUILD FIRST REACTORS FOR POLAND: Poland selected Westinghouse Electric Co. to build the first nuclear reactors in the coal-reliant nation, Prime Minister Mateusz Morawiecki said Friday.

The Polish government worked alongside Vice President Kamala Harris and Energy Secretary Jennifer Granholm to come to an agreement, he said in a tweet.

Westinghouse will initially build three of its AP1000 reactors, the same technology in the new units at Plant Vogtle in Georgia.

Morawiecki’s tweet capped off the International Atomic Energy Agency’s nuclear summit in Washington, where government and industry leaders from across the world met to promote the expansion of nuclear power.

Comments from representatives from the developing world, especially Africa, reflected a special keenness to stand up nuclear plants and lift their people out of energy poverty.

Challenges ahead: The imperative to increase electricity generation from clean sources adds another element of pressure to nuclear developers who, in the advanced nuclear space, are hard at work to show they can build novel commercial plants affordably and at scale.

For earlier generation technologies, including Westinghouse’s AP1000s, developers are under pressure to limit cost overruns that have long plagued the industry.

“There are some question marks here,” Fatih Birol, executive director of the International Energy Agency, said during the IAEA summit. “The first question mark I have is whether or not nuclear industry will this time deliver on time and on budget? Because when we look at the performance of nuclear industry, we don’t only see bright notes.”

Birol also questioned whether governments around the world would provide investment conditions adequate enough to lure developers.

CHENIERE ENTERTAINING CAPACITY GROWTH FOR EUROPEAN DEMAND: The largest American liquefied natural gas company is contemplating building new export capacity to serve the hot European market.

Corey Grindal, executive vice-president of the Houston-based company, downplayed the prospect of LNG companies bring a bunch of new gas to market in short order to respond to the energy crisis in Europe.

“When you look at the next 12 to 24 months, realistically, there is no new liquefaction capacity that is able to come online,” he told Euractiv. “And that’s worldwide”.

But, Cheniere is “willing to build incremental facilities” to satisfy growing European demand,” he said, although that wouldn’t come online until later this decade.

“For the long term, we’re willing to expand – with the right contract support that justifies building these very large, expensive facilities,” Grindal said.

Cheniere operates the single largest liquefaction facility in the U.S. at Sabine Pass in Louisiana. Its liquefaction trains at Corpus Christi have the second-largest total capacity, and the company moved forward with an expansion of that facility in June.

NORWAY STEPS UP SECURITY AROUND PIPELINES: The Norwegian military is increasing surveillance of the country’s oil and gas infrastructure in the North Sea following the suspected sabotage of the Nord Stream pipelines last month, Bloomberg reported.

The fall in exports of Russian gas to the EU has made exports from Norway all that much more critical for the Europeans, who’ve been bringing in more Norwegian gas this year at a premium.

The Rundown

The Guardian ‘It’s got nasty’: the battle to build the US’s biggest solar power farm

Bloomberg Russia is mostly failing in race to find new oil markets

Calendar

THURSDAY | NOVEMBER 3

11:00 a.m. The National Science Foundation holds a meeting of the Advisory Committee for Geosciences. Learn more and register here.