Daily Archives: November 9, 2021

The countrys largest offshore wind farm just got a lot more expensive.

Dominion Energy Inc. disclosed Friday that its plan to raise 180 turbines off the coast of Virginia Beach will cost ratepayers $2 billion more than previously thought.

When the company first announced its preliminary plan for the Coastal Virginia Offshore Wind project in 2019, it estimated a cost to Dominion customers of $8 billion. The utility now expects that will be closer to $10 billion, said Bob Blue, president and CEO of Dominion Energy in a call with investors Friday.

The cost increase can be attributed to, among other things, commodity and general cost pressures as seems to be the case across a number of industries right now, he said.

The Dominion project is unique in the United States as the only one brought solely by a state-regulated utility that plans to place the cost burden on its ratepayers, as well as earn a profit from the regulated return on the investment (Energywire, Feb. 4, 2020).

Its also the largest single proposed offshore wind project in U.S. waters and one of the most expensive.

The projects fatter price tag could increase pressure on Dominion as it seeks approval from state regulators at the State Corporation Commission (SCC), who have already indicated they plan to scrutinize the offshore wind cost projections.

Also Friday, Dominion filed its application for project approval with the SCC. Though its located in federal waters, the commissions approval will be necessary for Dominion to advance the offshore project.

In their call with investors, Dominion officials expressed confidence that the wind farms benefits are worth the expense, pointing to more than 900 annual jobs estimated to be created during construction alone.

This project represents a viable and needed opportunity for Virginia to achieve its clean energy goals, said David McFarland, director of investor relations on the call.

Blue defended the projects levelized cost over its lifetime of $87 per megawatt hour. Thats below the $125 per megawatt maximum set by Virginias Clean Energy Economy Act of 2020, he said.

With potentially extended federal tax credits, that levelized cost could dip even lower, he said.

He also discouraged comparing Dominions costs to other projects in the burgeoning U.S. offshore wind industry that are not state regulated and noted that the project is helping kick-start a supply chain that would make Virginia a regional hub for the offshore wind sector.

Last month, Siemens Gamesa Renewable Energy announced that it would build the first offshore wind blade facility in Virginia.

Meanwhile, Dominion is building a jack-up vessel to raise the heavy turbines at sea, at a cost of about $500 million the first boat for the U.S. wind industry that will be able to meet the Jones Act requirement that only American-flagged ships can move goods between domestic ports. State regulators will determine whether its used for the coastal Virginia wind project and if ratepayers pay for that investment.

The fledgling U.S. offshore wind industry has gained significant federal support from the Biden administration, which aims to deploy 30 gigawatts of offshore wind power by 2030. To meet that, Bidens Interior Department has been rapidly conducting the environmental analyses needed to advance the queue of projects seeking a federal green light.

The Bureau of Ocean Energy Management began environmental review of the Dominion offshore wind project in July and the utility said it expects an approval by 2023. The entire project is slated to finish construction by 2026.

In Virginia, too, political favor has also boosted the project.

The Clean Energy Economy Act, passed by the states Democratic-led Legislature and signed by Democratic Gov. Ralph Northam last year, declared offshore wind to be in the public interest. Thats given power to Dominions proposal even as critics say it could limit the ability of state regulators to curb high costs.

Company officials Friday were asked whether the outlook for Virginias energy politics will change with last weeks election. GOP candidate Glenn Youngkin won the governors seat and control of the House of Delegates flipped to Republican control (Energywire, Nov. 4).

Blue said political changes were nothing new for the utility, which has witnessed several dramatic shifts in recent years.

Whats remained consistent throughout that period is that our company has maintained constructive relationships with members of both parties, and we dont see any reason that that would change, he said.

Clean energy advocates in Virginia have been supportive of the Dominion project, despite a history of locking horns with the utility over its fossil fuel investments and cost burdens on customers.

Tim Cywinski, spokesman for the Sierra Club Virginia chapter, echoed Dominion that the offshore wind project was needed for Virginia and that as the industry grows the cost will be driven down. Until then, he said public and regulatory pressure can keep the utility in line.

Every single time you want to increase costs, there needs to be an overly detailed justification, said Cywinski. We need to ensure that clean energy is developed in a way that maximizes benefits for ratepayers. And that includes finding the most affordable options.

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Cost of largest U.S. offshore wind farm spikes by $2B - E&E News

Another case involved Czech President Andrej Babi, a right-wing populist media billionaire (and allegedly a former Cold War spy) who, during his tenure as finance minister, had participated in discussions with other E.U. ministers on how to reform offshoring rules. In the Aladdin files, Alecci discovered his name in a report that the Panamanian law firm working on Babis offshore accounts had sent to regulatory authorities in the British Virgin Islands. Babi had used a series of secret shell companies to transfer money from the British Virgin Islands to Washington, D.C., to Monaco, in order to buy an estate in the South of France. Its a very complicated route just to buy luxury property, Alecci said. It was particularly striking to her that the trail of offshore shells had run through the city that was supposed to be policing much of this activity. Alecci said, He wasnt the only one. There were a few people who used a Washington, D.C., L.L.C.

It took more than two years to prepare the stories, now collectively called the Pandora Papers, for publication. Youre kind of, like, living with a secret, Ryle told me. The initial leak of five million files grew to nearly twelve million, from the same source, and the work of sorting through it was laborious. Russian names were notoriously difficult, since the spelling was so variable; Chinese, Korean, and Arabic names were tricky to track, too. Shiel recalled to me that the King of Jordan, a major target, was referred to in some of the documents as the Jordanian and in others merely as you-know-who.

The global political situation has changed in the decade or so since Ryle first began working on the files that became Offshore Leaks. The global populist shock of the mid-twenty-tens has neither entirely upended the existing political order nor been smothered to extinction; instead, you can now find overtly populist traits in most major political parties. For journalists, the risk is mundanity. In 2016, when the Panama Papers revealed that the Prime Minister of Iceland secretly owned an offshore company with multimillion-dollar claims on the countrys failed banks, there were mass demonstrations and he almost immediately stepped down. But, by this most recent I.C.I.J. investigation, the fourth batch of leaks, the offshoring scandal was familiar, and populist politicians have learned to blame the stories on a hostile or partisan press, or simply ignore them. I think maybe a lot of them have become more sophisticated in the reaction, Alecci told me.

At the same time, many of these politicians were more vulnerable to charges of hypocrisy, since they had often come to office decrying corruption or the global lite. Wopke Hoekstra, the Dutch finance minister, for instance, had campaigned against tax havens. And yet, in 2009, he had used a shell company in the British Virgin Islands to invest in a friends safari company. (He sold the shares a week before becoming finance minister, in 2017). Paulo Guedes, the Brazilian finance minister and another anti-offshoring campaigner, had more than nine million dollars in secret family accounts. (In a statement, Guedess lawyers said the minister had recused himself from the offshore investment before joining the government, in 2019.) These arent rogue outliers, Ryle said. This is mainstream. The geography of the offshore world now took in Washington, D.C., and the City of London. Its principals ran the finance ministries of major Western countries, and campaigned against offshore corruption. If, during the Trump years, the leaks had detailed a system of global oligarchy that seemed to form an opposing force to liberal democracy, then the Pandora Papers emphasized the oligarchy that had taken root within liberal democracies themselves.

Will Fitzgibbon focussed on much of the U.S. file. For years, tax-advocacy groups had identified South Dakota, where disclosure laws are particularly loose, as one of the most problematic tax havens in the world: one report had suggested that the amount of money held in trusts in South Dakota had grown from two billion dollars in 2007 to three hundred and sixty billion dollars today. Its excruciating work, where at first Im just like a monkey typing in South Dakota and Sioux Falls to search these documents, and then going through the thousands of files that come up, Fitzgibbon said. He noticed that many of the people hiding money in South Dakota came from Latin AmericaBrazil, Colombia, Ecuador, Mexico, El Salvador. I dont speak Spanish; I dont speak Portuguese, Fitzgibbon said. But the first Google result for two of them was quite literally involved in a money laundering ring and involved in a settlement with the U.S. government.

Fitzgibbon travelled to Sioux Falls, where he met with a whistle-blower, researched the lawyers who had pushed legislation limiting scrutiny of trusts to the state legislature, and checked out the office building that housed a group called Trident Trust. The scene in South Dakota was phenomenally mundane. Hundreds of billions of unreported dollars were being hidden in the same place that processed receipts for grain. The problems, the inequalities, and the wrongdoing enabled by the offshore system isnt just because theres a few Mr. Burns-like figures sitting at their desks wrapping their fingers together, Fitzgibbon said. There is no evidence that theres some evil mastermind in Sioux Falls unscrupulously soliciting foreign wealth. He noted that, in addition to South Dakota, Alaska, New Hampshire, and Nevada have become U.S. hot spots for tax evasion. Its often specifically because they are small jurisdictions with part-time legislators, small populations and failing economies, and, therefore, in the eyes of trust lawyers, ripe for persuasion. It turned out that Latin American billionaires moved their offshore wealth from the Caribbean to South Dakota, as the British Virgin Islands and others tightened some regulations in the aftermath of the Panama Papers. Fitzgibbon said, Same wine, different bottle.

The Pandora Papers went public on October 3rd. The release was extraordinary in its scale: stories from media outlets in a hundred and seventeen countries appeared simultaneously, naming twenty-nine thousand offshore accounts held by, among others, more than a hundred billionaires and thirty-five current or former heads of state, containing hidden assets totalling somewhere between five trillion and thirty-two trillion dollars. But, by the standards set by the Panama Papers, the response was muted. There were no mass demonstrations. In Kenya, where the I.C.I.J. and its partners had identified thirty million dollars that President Kenyattas family had hidden in offshore accounts, Kenyatta eventually issued a statement welcoming the scrutiny and calling for greater transparency. In Pakistan, where the I.C.I.J. had linked millions in offshore accounts to key associates of Prime Minister Imran Khan, the Prime Minister issued a similar statement. This was in keeping with Aleccis observation that politicians increasingly pretended that they werent implicated in the I.C.I.J.s revelations.

Still, there were detectable ripples. Together with her Czech and French colleagues, Alecci had identified the twenty-two-million-dollar chteau near Cannes that Babi, the Czech President, had bought through a shell company. The Czech parliamentary elections were held the same week as the release of the Pandora Papers, and Babi, who had denounced the report and denied any wrongdoing, was still expected to win. Until the very end, I thought he was winning, Alecci said. And then all of a sudden the results changed by a tiny fraction. A poll would eventually suggest that eight per cent of voters in Babis party had turned against him because of the offshore revelations. Babi failed to win enough seats to form a government. It was a quieter effect than the mass demonstrations that had brought down the Prime Minister of Iceland. But Babi soon conceded that his party would not share in the next Czech government. The man who had been compared to the Hungarian autocrat Viktor Orbn was out.

Slowly, Ryle began to see the investigations impacts elsewhere. In Chile, where the Pandora Papers had suggested that President Sebastin Piera might have used an offshore company to conceal the proceeds from the sale of a mine, the opposition began impeachment proceedings. In Ecuador, the legislature opened hearings into the President, an ex-banker named Guillermo Lasso. Were now being inundated by governments looking for the documentsEuropol, police forces, tax offices, Ryle told me, when I visited. Its a slow burn.

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Uncovering the Secret Offshore Accounts of the Global Elite - The New Yorker

The company logo is seen on the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song

HONG KONG/SHANGHAI, Nov 8 (Reuters) - Some holders of offshore bonds issued by a unit of developer China Evergrande Group (3333.HK) had not received interest payments due on Nov. 6 by Monday evening in Asia, two people familiar with the matter said.

Scenery Journey Ltd was due to make semi-annual coupon payments on Saturday worth a combined $82.49 million on its 13% November 2022 and 13.75% November 2023 U.S. dollar bonds. ,

Non-payment of interest by Nov. 6 would have kicked off a 30-day grace period for payment.

Twice in October, Evergrande narrowly averted catastrophic defaults on its $19 billion worth of bonds in international capital markets by paying coupons just before the expiration of their grace periods.

One such period expires on Wednesday, Nov. 10, for more than $148 million in coupon payments that had been due on Oct. 11. Evergrande is also due to make coupon payments totalling more than $255 million on its June 2023 and 2025 bonds on Dec. 28.

A spokesperson for Evergrande did not immediately respond to a request for comment. The sources could not be named as they were not authorised to speak to the media.

Reuters was unable to determine whether Evergrande has told bondholders what it planned to do regarding the coupon payment due on Saturday.

BONDS, SHARES FALL

Evergrande's shares edged lower on Monday, finishing the day down 0.9%. They have fallen nearly 85% this year. Duration Finance data showed the company's dollar bonds continuing to trade at discounts of about 75% from their face value on Monday.

Once China's top-selling developer, Evergrande has been reeling under more than $300 billion in liabilities, and its liquidity woes have reverberated across the country's $5 trillion property sector, prompting a string of offshore debt defaults, credit rating downgrades and sell-offs in the developers' shares and bonds in recent weeks.

Spreads on Chinese corporate high-yield dollar debt (.MERACYC) widened to record highs on Friday, and on Monday Shanghai Stock Exchange data showed developers' bonds once again dominating the list of the day's biggest losers. One yuan bond issued by an onshore unit of Shimao Group (0813.HK) was suspended from trade after falling more than 34%.

Falls even extended to investment-grade names. Tradeweb data showed a 4.75% January 2030 bond issued by a unit of Sino-Ocean Group Holding (3377.HK) fell nearly 15% on Monday to just above 75 cents. Sino-Ocean is rated "BBB-" by Fitch Ratings and has a "Baa3" rating from Moody's Investors Service.

Nomura economists Ting Lu and Jing Wang said in a note that they expected "much higher" repayment pressures on developers in the coming quarters, almost doubling from $10.2 billion in the fourth quarter of 2021 to $19.8 billion and $18.5 billion in the first and second quarters of 2022, respectively.

"With the worsening property sector, we might see a rebound of defaults onshore by developers, and bond prices in onshore and offshore markets may increasingly impact one another as investors are on alert," they said.

"We believe regulators are likely to step up efforts to avoid rising defaults in China's (offshore commercial dollar bond) market."

Regulators in October told developers to proactively prepare for repayment of both principal and interest on their foreign bonds and to "jointly maintain their own reputations and the overall order of the market." read more

Reporting by Clare Jim and Andrew Galbraith; Editing by Muralikumar Anantharaman and Louise Heavens

Our Standards: The Thomson Reuters Trust Principles.

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Some investors have not received Evergrande unit's bond interest due Nov 6, say sources - Reuters

Going into this last weekend the forecast was tricky. The models were handling the area of low pressure that would sit offshore differently. While the rain forecast was a curve ball at times, the wind and tide forecasts went about as expected.

Some of the coastal winds did gust to over 40 mph, but most were between 25-35 mph.

The area of low pressure has finally started moving to the east. The rain and clouds have moved offshore as well. Now high pressure is building in from the west.

As high pressure builds into the region it will still create a pressure gradient between the low offshore. So our winds will be out the north again today, but they wont be as strong as the weekend. They will run out of the north at 10-20 mph with gusts to 25mph. There will be some gusts to 30 mph near the shore. However, the winds should all decrease this afternoon as the low gets farther away.

The north breeze will keep high temperatures down a bit, but the strong sunshine will put us in the mid 60s this afternoon.

The wind will create some more tidal flooding today. It will be minor for many areas along the Chesapeake Bay. This will be during the mid-late morning

There will be a couple of spots like Kiptopeke and near the Chesapeake Bay Bridge-Tunnel that will have some brief moderate tidal flooding. However, it will be major again for the Outer Banks.

Yesterday morning the water level at Duck, North Carolina, made it up to 6.87 feet. There was a lot of ocean overwash, and this ended flooding out part of Highway 12.

The tide forecast down there today will be close to that level. The forecast was aiming for around 7 feet, but looking at the latest levels I think it will be just a bit under that. The winds were just a little overforecast for this morning by the models. So lets hope Im right. Either way there will be more ocean overwash today and more beach erosion down there. The record tide at Duck was from Hurricane Isabel in 2003. That level was 7.8 feet.

Tomorrow the winds will decrease, and the sun will be out. So it will be a very nice day. High temps will be in the low 70s. Well have similar weather Wednesday and Thursday. Then well have some rain move in on Friday.

Meteorologist: Jeremy Wheeler

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Blog: Storm Rolls Offshore, But Wind and Tides Remain. - WAVY.com

Bulk carrier turned offshore wind installation shipowner Eneti Inc. (NYSE: NETI) on Monday announced its intention to offer $200 million worth of common stock to help fund the companys pipeline of newbuild wind turbine installation vessels (WTIVs).

Proceeds from the underwritten public offering are expected to be used for general corporate purposes, including the funding of the companys WTIV newbuild program consisting of one contracted newbuild, one option, and a proposed Jones Act compliant newbuild vessel.

As part of the offering, Scorpio Holdings Limited, a related party and major shareholder, has expressed an interest in the shares at the public offering price with a value of at least $30 million.

Led by Chairman and CEO Emanuele Lauro, in 2020 Eneti shifted from owning and operating dry bulk carriers under the brand name Scorpio Bulkers to embark on a new and more sustainable future in the offshore wind sector. Since then, it has changed its name and sold off its fleet of dry bulk ships while pursuing new and used highly-capable next generation WTIVs needed to develop offshore wind projects in the United States and globally.

Earlier this year, the company entered into an agreement to construct its first WTIV with South Korean shipbuilder DSME at a price tag of $330 million, including one option for an additional vessel. Delivery is planned in early Q3 2024. At the same time, it revealed it was in advanced discussions with American shipbuilders for the construction of a Jones Act compliant WTIV.

Later, in August, Eneti acquired UK-based Seajacks and its fleet of five purpose-built WTIVs, positioning the company as one the top owners and operators of wind turbine installation vessels worldwide. The acquisition resulted in existing Eneti shareholders owning 58% the company and owners of Seajacks owning 42%.

The shares are being offering through an underwritten public offering. Citigroup, DNB Markets, BTIG and Nomura are acting as Joint Book-Runners. Clarksons Platou Securities, Fearnley Securities and Kepler Cheuvreux are acting as Co-Managers.

Shares of Eneti (NYSE: NETI) fell 15% to $11.94 on Monday.

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Eneti Initiates $200 Million Stock Offering to Pay for Offshore Wind Newbuilds - gcaptain.com

Nov 4 (Reuters) - A top U.S. official on Thursday challenged nations to join the United States in setting aggressive goals to expand electricity production from offshore wind.

Interior Secretary Deb Haaland issued the call during an appearance at the United Nations climate change conference in Glasgow, Scotland.

The administration of President Joe Biden has moved swiftly this year to support a nascent offshore wind industry in the United States, a key part of its plan to decarbonize the power sector by 2035 and address global warming.

"We are in an exciting time - and the Biden-Harris administration is taking bold action to advance clean energy to make people's lives better and build a more sustainable future," Haaland said. "Together, we need to set ambitious goals and commit the resources to get it done."

This year, the White House set a target of deploying 30 gigawatts of offshore wind energy along every U.S. coastline by 2030. That would be enough electricity to power 10 million homes.

The 30-GW goal is roughly the amount that already exists in Europes two-decade old industry, but is a tall order for a nation that currently has just two small offshore wind farms.

At a press conference in Glasgow, Haaland dismissed concerns that Washington's efforts to boost offshore wind would be hindered by tough environmental review process and opposition from fishing interests.

"It's a priority and we'll just make sure that it gets done," she said.

Haaland's agency has stumbled in its effort to restrict fossil fuel development on public lands after a federal judge in June ordered the government to resume drilling auctions that were paused by Biden in January.

Because of that ruling, Interior is scheduled to hold a sale of oil and gas leases in the Gulf of Mexico later this month and has proposed to auction onshore parcels to drillers in several states in early 2022.

Interior is "making a lot of changes now" to its oil and gas leasing program, Haaland said at the press briefing, including evaluating its impacts on climate change.

"We are doing everything we can at the department to ensure that we are analyzing these leases with climate change as a backdrop," Haaland said in response to a question about the future of the program.

Reporting by Nichola GroomEditing by Marguerita Choy and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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U.S. calls on nations to set bold targets for offshore wind - Reuters