Experts believe it would be a major mistake to compare European offshore wind development costs with those in The Great Lakes

All wind power installations in the US to date have been onshore, though there are now 11 “advanced-stage” offshore wind project proposals totaling more than 2,000 MW in various phases of development in the US waters.

Going by the recent developments, current sentiments and even initiatives indicate that the US offshore wind industry is moving in the right direction.

Last month, the US government issued five exploratory leases for renewable wind energy production on the Outer Continental Shelf. This is the first time the federal government has issued offshore wind leases. The leases cover areas 6-18 miles off New Jersey and Delaware.

In another development, a newly formed collaborative between the private sector and a host of New York State and New York City agencies issued a Request for Information (RFI) for a wind farm.  The group is exploring the possibility of creating an offshore wind project that would be situated approximately 13 miles off the south shore of the Rockaway Peninsula in the Atlantic Ocean. The initiative is a step towards the development of what could be the largest offshore wind farm proposal in the country. The wind project would likely be designed for 350 MW of generation, with the ability to expand it to 700 MW. 

“We believe that the sentiment to develop offshore wind resources in North America is very strong and will continue to grow for some time,” said John Kourtoff, president and chief administrative officer, Trillium Power.

Kourtoff, who is scheduled to speak at the Offshore Wind Energy in Coastal North America and The Great Lakes Conference to be held in Toronto (October 21-22) this year, believes that the industry has just started to witness the development of Offshore Wind resources in North America and particularly in The Great Lakes.

“Going-forward, there is no doubt that offshore wind will lead technological advances in the wind sector due to its high reliability requirements and maintenance economics,” he said.

Support from the government

Kourtoff says the US President Barak Obama, and “his exciting new US administration”, seem to intuitively understand the enormous security and economic opportunities that can be harnessed through the development of a wide portfolio of renewable energy technologies and development projects - especially large ones such as those typical of offshore wind sites.

While it is widely known that the US has been slow over the past 5 to 8 years to move towards offshore wind development it is now applying a tremendous amount of financial and regulatory resources to make up for lost time.

“US Energy Secretary Steven Chu and US Secretary of the Interior Ken Salazar are making great strides to coordinate policy initiatives as well as provide the necessary funding resources to a wide range of renewable energy technologies,” said Kourtoff.

He added that the New York Power Authority (NYPA), too, has been diligently working on plans to get offshore wind development moving. In this context, it is not surprising to see NYPA make an announcement regarding its intention to have offshore wind developed in the New York State waters of The Great Lakes.

Avoiding comparison with Europe

Trillium Power Wind Corporation advocates that large offshore wind projects are essential in building the green economy because their size provides the critical mass to spinoff large-scale economic benefits.

Even as there is hardly any doubt over the fact that the coasts of North America have a tremendous amount of offshore wind resources, Kourtoff says it would be a major mistake to compare European offshore wind development costs with those in The Great Lakes.

The North Sea has bathymetric issues which are very different than those found in The Great Lakes and this difference can drive up development costs substantially.

In addition to costs associated with placing wind turbines in salt water, extreme wave heights in the North Sea can reach 25m, thereby posing an engineering and economic challenge.

“By way of comparison, the average wave height at our TPW1 Offshore Wind site from April 1 until October 31 is less than 1 metre for 94% of the time,” Kourtoff said.

He added that due to the complex soil and sediment in many good wind locations in the North Sea tripod foundations must be deployed, which require that piles are driven into the footings of each of the foundations. This requires calm seas and the use of Jack Up ships - if they are available. The ships must frequently stay in port due to high-seas and/or wave conditions all-the-while costing 100s of thousands of dollar per day for ship rental and idle skilled labour costs.

“These significant additional costs can have a dramatic effect on the economics of offshore wind projects in Europe. In Central and Northern Europe, for every $1 of wages-paid there is an additional $0.80 paid to various levels of government as social taxes,” Kourtoff said.

By comparison, in Ontario, for every $1 of wages-paid there is approximately an additional $0.30 paid to various levels of government as social taxes. Skilled labour in Ontario therefore provides a 27.8% advantage over European rates. This will naturally have a significant positive effect on all aspects of developing offshore wind in The Great Lakes region.

“Recent media articles have noted that there has been an 18% decrease in the cost of onshore turbines and related products and services,” said Kourtoff.

According to him, the bubble prices demonstrated by the overheated demand of the past several years with only a couple of offshore wind turbine suppliers should not be taken as any indicator of future prices in a post global meltdown environment.

“In addition, we expect that the significant number of new offshore wind turbine manufacturers that will be ramping up production of larger, more efficient turbines will moderate overall costs and potentially lower the turbine costs on a per MW basis,” said Kourtoff.