US approves offshore wind build in New England, New Jersey; Nordex to restart US nacelle factory

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US approves New England, New Jersey offshore wind projects

The U.S. government has approved construction plans for Avangrid’s New England Wind 1 & 2 offshore wind project in Massachusetts and the Atlantic Shores South project off the coast of New Jersey.

Avangrid’s New England Wind 1 & 2  will be built on two adjacent lease areas with a capacity of up to 2.6 GW. Atlantic Shores South, a  50:50 partnership between Shell New Energies and EDF Renewables, consists of two lease areas that could host up to 2.8 GW.

“Today’s milestone is yet another step toward our ambitious goal of deploying 30 gigawatts of offshore energy by 2030,” U.S. Secretary of the Interior Deb Haaland said in a statement.

The federal government has now approved nine offshore wind projects with a total capacity of more than 13 GW.

Last year developers canceled several projects citing higher costs and a lack of installation vessels. East Coast states have revamped offshore wind power auctions to help protect investors from inflationary pressures going forward but supply chain and vessel constraints will continue to hamper developers in the coming years.

Avangrid, a subsidiary of Spain's Iberdrola, plans to build the 800 MW New England Wind 1 and 1.2 GW New England Wind 2 projects in the lease areas. It aims to install up to 130 turbines of capacity 16 MW on the  sites as well as three onshore substations, according to the construction plan.

                   Global average offshore wind turbine capacities

                                                           (Click image to enlarge)

Source: U.S. Department of Energy's Offshore Wind Market Report, 2023 Edition (August 2023)

Avangrid could start building New England Wind 1 in 2025 and start commercial operations in 2029, although it is yet to secure an offtake contract, it said. The group submitted several bids for offshore wind power in a joint auction held by Massachusetts, Connecticut and Rhode Island in March and the final winners are likely to be announced in August.

Atlantic Shores South plans to install up to 200 turbines and up to 10 offshore substations. The construction plan does not specify a turbine size but the developer said turbines larger than 12 MW will likely be available for purchase during the project’s development timeframe.

Atlantic Shores has already secured an offtake agreement for 1.5 GW for the first phase of the project, which is slated to start producing power in 2026. A second phase would have an “indicative capacity of 1.2 GW” and is slated to start operating in 2028.

Nordex to restart US nacelle factory as demand rises

Nordex Group plans to restart a nacelle manufacturing facility in the U.S. state of Iowa in the first half of 2025, ahead of an expected rise in demand in North America, the German turbine supplier said.

In recent years, GE Vernova, Siemens Gamesa, and Vestas have also announced plans to expand nacelle production in the United States.

Wind developers are increasingly sourcing nacelles from U.S.-based suppliers in order to benefit from additional tax credits in the 2022 Inflation Reduction Act.

            US market share of wind turbine manufacturers by MW

                                                          (Click image to enlarge)

Source: U.S. Department of Energy's Land-Based Wind Market Report, August 2023. Data: American Clean Power (ACP)

Nordex focuses on large onshore turbines of capacity 4 to 6 MW and the company has manufacturing facilities in Germany, Spain, Brazil, India and Mexico.

The Iowa facility, which was shut down a decade ago, will manufacture nacelles for 5 MW Nordex turbines and another model “specifically tailored to the U.S. market,” the company said in a statement, without providing further details.

              Average US turbine capacity, hub height, rotor diameter

                                                            (Click image to enlarge)

Source: DOE's Land-Based Wind Market Report, August 2023. Data: American Clean Power (ACP), Berkeley Lab

The plant’s production capacity will eventually reach 2.5 GW a year but actual volumes will depend on demand, the company said.

Nordex plans to start recruiting and training workers in the coming months.

“Manufacturing nacelles in the U.S. represents a significant next step in expanding local procurement, and our manufacturing presence in North America, which is a key element of the company’s growth strategy for the region,” Nordex CEO Jose Luis Blanco said.

California seeks to speed up offshore wind permitting

The California Energy Commission (CEC) has proposed the creation of a “multi-agency permitting approach” to accelerate offshore wind development and achieve the state's clean power targets.

California aims to install between 2 GW and 5 GW of floating wind in its deep coastal waters by 2030 and build 25 GW by 2045, but progress has been slow.

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In a revamped strategy, the CEC suggests policymakers should adopt a similar approach used by the Desert Renewable Energy Action Team in 2008 to streamline permitting for clean energy projects in the California desert.

Two offshore wind agencies should be created, the commission said. The first would focus on permitting and environmental reviews, while the second would liaise with stakeholders to solve potential conflicts.

The commission also recommends a “coordinated multiport strategy” that could potentially include 16 large and 10 small port sites that would be built over the next decade. Between $10 billion and $12 billion of port investments are needed to meet the 2045 target, it said.

Several of the ports should host manufacturing facilities for blades, towers, nacelles, and foundations, the commission said.

In addition, state policies are required to minimise the environmental impact of offshore wind projects on local indigenous tribes, sea life, migratory birds and fisheries, the commission said.

California grid operator CAISO has pledged to build onshore transmission infrastructure to transport offshore wind energy to load centers.

In its latest draft investment plan, CAISO said it plans to invest $6.1 billion in new grid infrastructure, with two thirds of that budget going to power lines to deliver clean energy into the Bay Area.

The lines will transport up to 4.7 GW of offshore wind, including 3.1 GW in the Central Coast (Morro Bay call area) and 1.6 GW in the North Coast area (Humboldt call area).

Grid backlogs largest threat to wind growth in Europe

A lack of grid capacity has become the main bottleneck for the wind industry, with more than 500 GW of wind energy stuck in grid connection queues across Europe, industry group WindEurope said in a new report.

Grid approvals for wind and solar can take several years, depending on permitting requirements, grid congestion and the resources available to power authorities.

Italy has the largest wind queue at 191 GW, followed by the UK (145 GW), Germany (70 GW), Poland (51 GW), and Spain (40 GW), WindEurope said. Not all of these projects will be built but long waits for transmission infrastructure in key markets could undermine the European Union's goal to install 425 GW of wind capacity by 2030, up from 220 GW today, it said.

“Grid access is the new permitting – the number one bottleneck to the build-out of wind. The system is clogged up – and holding back hundreds of gigawatts of wind farms. This means less energy security and higher power prices,” said WindEurope CEO Giles Dickson.

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The EU introduced a raft of policies last year to speed up wind development, including a Grid Action Plan that calls for more long-term planning, but in the short term, countries need to clear up their backlogs.

At present, most countries are following a “first come, first served” approach, which can create further delays because it leads to "unthoughtful allocation" of grid capacity and an imbalanced mix of technology and geographic spread, WindEurope said.

Instead, countries should prioritise mature projects that have already met a number of milestones. France, Norway, Spain and the UK have started using this methodology, the group noted.

This approach could incentivise wind developers to build hybrid plants that also include solar and battery components, which would maximise the use of available grid capacity, WindEurope said.

Last year, the EU approved new rules to accelerate permitting that require governments to set aside land for solar and wind ,and designate renewable energy as projects of overriding public interest. Germany has fast tracked the new rules into its national laws to accelerate renewable energy development but other EU countries have been much slower.

“Overriding public interest (OPI) for new wind farms is a success story. Germany and others that use OPI have significantly ramped up their permitting volumes – and done so very quickly,” Dickson said.

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