Report cites US offshore progress

In a new report, the US Energy Department (DOE) says the country’s nascent offshore wind industry has strong potential, as it transitions from early development to demonstration of commercial viability.

The report, done by a Navigant Consulting, characterizes the US industry as having made “incremental but notable progress” during the past year toward completion of its first commercial-scale projects.

It found there is significant potential to increase US electricity capacity and create jobs through the further development of the offshore wind industry.

Moving toward initial construction stages are Deepwater Wind’s 30MW Block Island project off Rhode Island’s coast in state waters and 468MW Cape Wind, in federal waters south of Cape Cod, Massachusetts. Both are targeting second half 2016 completion.

Offshore Wind Market and Economic Analysis: 2014 Annual Market Assessment lists 14 projects representing 4.9GW of potential capacity as moving into “advanced stages” of development.  

All but three are located off the US Atlantic coast.

To qualify as “advanced,” a project must have accomplished at least one of three milestones.

They include having received approval for an interim limited lease or a commercial lease in state or federal waters; having conducted baseline or geophysical studies at the proposed site with a met tower erected and collecting data, boreholes drilled, or geological and geophysical data acquisition system in use; or having a power off-take deal in place.

Aside from Block Island and Cape Wind, the other 12 projects are:

-Deepwater ONE, 1GW, in federal waters off Massachusetts-Rhode Island.

-Dominion Virginia Power, up to 2GW, in federal waters off Virginia.

-Fishermen’s Energy Atlantic City Wind Farm, 25MW, in state waters and Phase II, 330MW, in federal waters off New Jersey.

-Galveston Offshore Wind, 150MW, in Texas waters.

-Garden State Offshore Energy, 350MW, in federal waters off New Jersey.

- LEEDCo, 27MW, Ohio state waters facing Cleveland.

- NRG Bluewater, 450MW, federal waters off Delaware.

- Ocean Energy Offshore, 7.5MW, off the coast of St. Thomas in the US Virgin Islands.

- VOWTAP, 12MW, federal waters off Virginia.

- University of Maine, 12MW, state waters off Maine.

- WindFloat Pacific, 30MW, federal waters off Oregon.

The report notes that the US offshore wind development faces significant challenges. These include cost-competitiveness of offshore wind energy; lack of infrastructure such as offshore transmission and purpose-built ports and vessels; and uncertain and lengthy regulatory processes.

“For the US to maximize offshore wind development, the most critical need continues to be stimulation of demand through addressing cost competitiveness and providing policy certainty,” it says.

The report notes that key federal tax credit policies expired for projects that did not start construction by yearend 2013. On the plus side, DOE did award $47m each to three demonstration offshore wind projects to complete engineering and construction.

The industry needs increased infrastructure to allow demand to be filled with transmission a large necessity, it says. Policies that could be implemented in the short term are to designate offshore wind energy resources zones for targeted grid investments, establish cost allocation and recovery mechanisms for transmission interconnections, and promote utilization of existing grid capacity reservations to integrate offshore wind.