alt Hacker NewsWe need to be careful in not throwing the babies out with the bath water - the fees paid for the leases for these projects were so high that the projects would not be economically viable in the first place. The developers are probably doing back flips behind closed doors that they have exited these positions without major financial impairments.
This does not mean that renewables or offshore wind should not be built it just means that the regime around how sites are awarded, and how power purchase contracts are made need to be reworked.
A lot of the world is struggling with this (recently UK re-tendered for Mona lease area with much more favourable conditions than r4 initial lease).
Generally speaking I think the best approach would be to have almost zero / nominal lease fee, then have a competitive auction around a two sided CFD - if the market price is below the strike price the state makes up the difference, if the market price is above the strike price the excess goes back to the state.
> the fees paid for the leases for these projects were so high that the projects would not be economically viable in the first place.
Can you explain where you got your information from?
* The leases were already paid for (in total) in 2022-2023 for $1bn.
* The expected output would have been 7gigawatts annually, which is a 5-7x return per year on paper.
* The sale of the lease is due to a regulatory blockade, not a traditional cost benefit analysis.