How much would the Humboldt offshore wind project cost to develop, build, and operate? Who would pay/is paying for it?

A 2023 CalMatters analysis (6) shows that the cost California’s offshore wind projects carry a host of implications and uncertainties:

• Energy companies would need hundreds of millions of dollars in state subsidies or bonds to assist with the extreme costs of construction and operation. Each wind farm could cost about $5 billion to develop, construct and assemble.

• Wind farms require an unprecedented industrialization of the coast, with millions in public funds to expand and upgrade ports, harbors and support facilities which would have environmental impacts.

• Local communities would bear social costs and strains on infrastructure, such as higher housing costs and utility upgrades. 

• Building transmission lines and related infrastructure to distribute the new wind power carries a price tag of as much as $8 billion (7) in California and at least $700 billion nationwide.

• Private investments and public funds totaling more than $260 billion would be needed by 2045 to improve the industry’s supply chains (8) — the parts and materials, such as rotors and turbines — to achieve the nation’s clean energy goals.

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The developers would pay for the projects with assistance from both private investments and Federal and State grants, funded by taxes and other government revenue. For example, the Humboldt Wind Energy Area (WEA) (9) lease holders (RWE [10] and Copenhagen Infrastructure Partners [11]) paid a combined $331.5 million to the U.S. Department of the Treasury through the U.S. Bureau of Ocean Energy Management (BOEM)’s December 2022 lease auction (12). And in January 2024, the Humboldt Bay Harbor, Recreation & Conservation District (Harbor District) received a $426 million INFRA grant (13) from the U.S. Department of Transportation to help develop the proposed Humboldt Bay Heavy Lift Marine Terminal Project (14) on Wigi/Humboldt Bay’s Samoa Peninsula, which is contingent (15) on raising a 50% match in funding that still must be generated. That grant estimated that the heavy lift marine terminal would cost $853,439,620 (16).
Additionally, government and philanthropic funding are supporting significant environmental studies, and developers, government funding and philanthropy are supporting Tribal and community capacities.

 

Some people are concerned that a transition to offshore wind would result in higher energy costs for ratepayers. While studies (17) have shown that the cost of offshore wind transmission could actually result in substantial savings to ratepayers, now and in the coming years, it will be important for our communities, Tribal Nations, and local governments to work with Federal and State governments to develop policy solutions that ensure savings for our local communities.