President Joe Biden wants the technology to contribute mightily to America's net-zero plans, but ramping up from almost nothing will be challenging, writes Mike Scott
The global offshore wind market has grown rapidly in the last few years, but one key market has been notable by its absence: the United States.
Of 215 existing offshore wind farms, 110 are located in Europe, 103 in Asia and just two are in the United States, although the Department of Energy estimates that the U.S. has the technical potential to generate more than 2,000 gigawatts (GW) of power offshore, or 7,200 terawatt hours (TWh) per year, almost twice the combined generating capacity of all U.S. conventional power plants.
The market was held back by the opposition of Donald Trump, when he was president, and from groups including commercial fishermen, local residents and tourism businesses. Trump has a visceral opposition to wind power and his administration stalled or blocked a number of offshore developments.
Meeting Biden’s target will require the construction, transportation and installation of more than 260 12-15 megawatt (MW) wind turbines per year
A lot of the U.S. wind potential, on the west coast and in the Gulf of Mexico, is in deep waters, where the federal government has jurisdiction. There have also been technology constraints as conventional bottom-fixed offshore wind technology is not suitable.
But the cost of alternative offshore wind technologies has come down, and under Joe Biden the political winds are blowing strongly in the opposite direction: the U.S. government wants to see 30 GW of offshore wind deployed by 2030, while states have committed to procure around 40 GW by 2040.
In December 2021, more than 3 GW of capacity was approved by Maryland and Massachusetts, while in February 2022, the federal government raised $4.37 billion from the sale of six leases off the coasts of New York and New Jersey. The winning projects are expected to produce up to 7 GW of power, enough for almost 2 million homes.
The Bureau of Ocean Energy Management, which leases offshore wind in federal waters, plans to hold up to seven new offshore lease sales by 2025, including undeveloped areas in the central Atlantic, the west coast and the Gulf of Mexico. Last month, Louisiana set a target of building 5 GW of offshore wind capacity in the Gulf of Mexico by 2035 as part of its climate action plan to reach net zero by 2050.
Jocelyn Brown-Saracino, offshore wind lead at the U.S. Department of Energy, says the federal target will support 77,000 jobs in the offshore wind industry and surrounding communities, generate electricity to power 10 million American homes, and cut 78 million metric tons of carbon dioxide emissions.
But how quickly will the United States be able to ramp up the industry? Meeting Biden’s target will require the construction, transportation and installation of more than 260 12-15 megawatt (MW) wind turbines per year, and the U.S. market lacks much of the necessary infrastructure.
The reconciliation bill remains bogged down in Congress, and there is a danger that local content requirements will stifle the growth of the sector
That requires port upgrades, more than 7 million tons of steel and factories for each major windfarm component, including for wind turbine nacelles, blades, towers, foundations and subsea cables, as well as up to six specialist turbine installation vessels.
The Biden administration plans to implement tax credits for offshore wind components manufactured in the U.S. in its budget reconciliation bill, currently under debate in Congress, while a number of states are seeking to impose local content requirements for projects off their coasts.
But the reconciliation bill remains bogged down in Congress, and there is a danger that local content requirements will stifle the growth of the sector at a time when it is clear that the first U.S. offshore wind projects will rely on imported turbines from Europe.
The first signs of a domestic supply chain are emerging, nonetheless. Last October, Siemens Gamesa announced it would build the first offshore wind blade manufacturing facility in the United States at the Portsmouth Marine Terminal in Virginia.
Michael Brown, chief executive of Ocean Winds North America and Mayflower Wind, says many of the key players are European companies looking to leverage their North Sea experience. Ocean Winds itself is a joint venture between EDPR and Engie, and other developers include Orsted, RWE, National Grid, EDF, Iberdrola-owned Avangrid and Equinor. However, they normally partner with U.S. organisations, given the preference for domestic companies to be involved and the distance from European manufacturing facilities.
And while last year’s bipartisan Infrastructure Investment and Jobs Act included $450 million per year for the next five years for the Department of Transportation’s Port Infrastructure Development Program, Brown says upgrading ports will be a big challenge. This is in part because many former waterfront industrial properties in places such as New York and New Jersey have been converted to housing and other uses. Another challenge is that many ports have bridges between them and the sea, making it difficult to transport the giant components required for offshore wind turbines.
The new federal target, by giving companies the confidence to invest in the nascent sector, will attract $12 billion a year in investment
In addition, there is a “limited global pool of specialised vessels needed to build and operate offshore wind facilities, and an even smaller domestic pool of such vessels, which is a major infrastructure challenge that will take years of action to alleviate”, according to Brown.
The lack of installation vessels is key because legislation, called the Jones Act, requires that vessels sailing between U.S. ports are U.S.-registered.
Then there are the shore-based interconnections and grid upgrades that are required to deliver clean power to the places it is most needed.
According to the Department of Energy, existing shore-based grid interconnection points for offshore wind are limited and may become a bottleneck in deploying offshore wind, if not addressed.
Solutions include expanding onshore transmission, which is critical to deliver electricity from offshore wind to consumers, and new offshore transmission backbones that can offer shared interconnection points, cutting costs and boosting reliability. “On shore, substations need to be upgraded to handle capacity from one or more offshore projects on top of their existing transmission capacity,” it adds.
But the Department of Energy’s Brown-Saracino said the new federal target, by giving companies the confidence to invest in the nascent sector, will attract $12 billion a year in investment and catalyse the construction of five to 10 new manufacturing plants, new ships to install turbines and up to $500 million in port upgrades.
Much of the east coast will be suitable for fixed offshore wind, whereas the west coast and Hawaii will mostly be suited to floating wind
She said offshore wind is actually better suited to helping coastal cities meet their renewable energy targets than land-based renewables, because they have “high populations and energy demand, but limited space for utility-scale land-based wind and solar installations”.
The target is bolstered by production tax credits and investment tax credits – offshore wind is eligible for a 30% federal investment tax credit, which expires at the end of 2025 – and the Department of Energy is considering specific federal incentives for offshore wind to help the sector scale up.
And states incentivise offshore wind through mandates to procure offshore wind, which has been a major driver in the development of the market.
The north- and mid-Atlantic markets are developing first and, initially, existing technology and logistical solutions are likely to tap into European supply chains. But over the longer term, there will need to be supply chains and technology innovation tailored to U.S. markets, Brown-Saracino adds.
“The United States must contend with deeper waters that require floating platforms and the potential impacts of hurricanes, while also developing ports and electrical infrastructure to economically build these wind farms,” says Brown-Saracino.
Sam Strivens, manager for programmes and innovation at the Carbon Trust, says floating wind turbines will be crucial to U.S. offshore wind, as around 60% of the country’s technical resource potential is in deep water areas, where only floating platforms would be feasible.
Floating turbines are most suitable for waters more than 60-65m (197-213 yards) in depth. “As a result, much of the east coast will be suitable for fixed offshore wind, whereas the west coast and Hawaii will mostly be suited to floating wind,” says Strivens.
While many of the installed turbines in Europe are 6 MW or smaller, virtually every U.S. wind farm will be able to use the latest 12-14 MW turbines
“Fixed bottom projects will certainly be utilised in all federal lease areas where water depths allow for use of those foundations,” says Brown of Ocean Winds. “In the longer run, however, as more projects are built in deeper and deeper waters the balance will eventually shift towards floating.”
U.S. projects will also benefit from the increase in scale of individual turbines: while many of the installed turbines in Europe are 6 MW or smaller, virtually every U.S. wind farm will be able to use the latest 12-14 MW turbines, which generate much more power and massively improve the economics of offshore wind.
Despite some of the challenges, Brown of Ocean Winds North America believes the U.S. market is on the same kind of growth trajectory that previously was seen for onshore wind and solar, and for offshore wind in Europe.
Mike Scott is a former Financial Times journalist who is now a freelance writer specialising in business and sustainability. He has written for The Guardian, the Daily Telegraph, The Times, Forbes, Fortune and Bloomberg.
This article is part of The Ethical Corporation’s March 2022 Energy Transition briefing: See also:
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