A new wind energy era
After a decade of uncertainty, US offshore wind is riding high following a series of pivotal announcements resulting from the Biden administration’s clean energy initiatives, in which offshore wind will play a crucial role.
Biden’s offshore wind initiative kickstarts concentrated federal actions and enables funding set to support rapid industry development to support reaching a total operating capacity of 30GW by 2030.
Meeting that target is no small feat - at the time of writing, the total offshore wind capacity in the US is just 42MW (less than 1% of the target).
Some analysts suggest these targets are unattainable. IHS Markit estimates only 21GW turning by 2030, citing bottlenecks such as the complex process for obtaining federal and state permits and the lack of a domestic supply chain.
For offshore wind insiders, however, these targets are not only attainable - they signal an “industry-making” moment for the United States.
I think out of all markets, the US will be the most exciting in the course of this decade.
Jonathan Cole - Managing Director, Iberdrola Renewables Offshore
"I think out of all markets, the US will be the most exciting in the course of this decade.", shares Jonathan Cole, managing director of Iberdrola Renewables' offshore wind division.
On the heels of this historic initiative, the administration ratified final approval of Iberdrola's JV Vineyard Wind project in Massachusettes, the nation’s first commercial utility-scale offshore wind farm.
"The acceleration of the US market is largely due to the Vineyard Wind project showing that offshore wind could be bigger, deployed quicker and at lower cost than expected," says Cole.
Indeed, the excitement and activity in offshore wind has ramped up since the Vineyard Wind approval in May. Federal agencies have hit the ground running in recent weeks launching environmental reviews to break bottlenecks for proposed projects on the Atlantic coast. In addition, BOEM has recently announced plans to advance offshore wind leasing off the coasts of New York, New Jersey, North Carolina, and California as well as explore offshore wind potential in the US Gulf Coast.
Iberdrola’s U.S. affiliate Avangrid Renewables is pioneering the development of offshore wind in the U.S. In addition to Vineyard Wind 1, Avangrid Renewables is a partner on Park City Wind, an 800 MW project to serve the state of Connecticut, as well as on additional lease areas off the coast of Massachusetts and Rhode Island to deliver up to 3,500 MW. The company is also developing Kitty Hawk Offshore Wind, which has the potential to deliver 2,500 MW of clean energy into Virginia and North Carolina.
The challenging work and patience of the teams behind Vineyard Wind have paved the way for a decade of tremendous clean energy growth through offshore wind, but there is still work to be done to meet the targets and ensure the industry is profitable and effective.
“Vineyard Wind 1 is a historic clean energy project that will deliver cost-effective clean energy, thousands of jobs, and more than a billion dollars in economic benefits to Massachusetts, but it is only just the beginning,” said Dennis V. Arriola, CEO of Avanagrid.
Key Opportunities for US Offshore Wind Development
Leveraging Iberdrola's OSW expertise in Europe and experiential knowledge gained from the twists and turns of the VW1 project, Avangrid Renewables has identified the necessary work to be done in the US to ensure the burgeoning industry is able to scale sustainably and at the rapid pace required to meet net-zero targets.
Shipbuilding and Vessel Technology
Building out 30GW of offshore wind capacity is no easy feat – and neither is getting the components out to sea. Offshore wind farm construction requires the use of purpose-built wind turbine installation vessels (WTIV) to safely handle components.
U.S.-based projects face an additional caveat of complying with the Jones Act – which requires all vessels carrying goods between two US points to be transported on ships built, owned, and operated by American flagged vessels. Developers are seeking solutions in order to abide by the Jones Act while U.S. flagged vessels can be built to serve this new industry.
The offshore wind plans set out by the Biden administration in March specifically call for the construction of 4 to 6 Wind Turbine Installation Vessels (WTIV) to meet the 2030 target, each representing investments of up to $500 million.
Beyond WTIV’s, the industry will need an array of offshore vessel types to support cable installations and service operations. Offshore services providers in the US that traditionally work in the offshore oil sector are uniquely positioned to capitalise, leveraging their already developed expertise.
Supply chain and infrastructure
Acceleration of project reviews and promises of new lease sales will enable the deployment of offshore wind at scale, catalysing enormous potential market makers in the nascent supply chain. And the $3 billion in funding made available for offshore wind innovation through the U.S. Department of Energy (DOE) loan programs will offer further momentum and support.
The fact sheet for the Department of Energy’s loan programs indicates additional build-out opportunities for infrastructure projects such as dockside staging areas, laydown yards, and manufacturing facilities for various project components.
To meet the 2030 target, Biden’s offshore wind initiative calls for “one to two new U.S. factories for each major windfarm component” Windfarms require a vast array of components including towers, foundations, subsea cabling, blades and turbines nacelles. With an estimated cumulative demand of over 7 million tons of steel, a typical American steel mill can be put to work for 4 years.
In addition, the US Department of Transportation announced $230 million of grant funds available for modernising and upgrading US port infrastructure, specifically in support of activities associated with offshore wind project developments.
Workforce development and training
The future scope of America’s offshore wind industry is truly massive, and a significant skills transfer will be needed between Europe and the U.S. in order to develop and train the workforce needed to meet demand and scale with the rapid growth. While there is some basis for cross-skilling with related industries like oil and gas, certain aspects of project development require highly specific training.
Just last month, Vineyard Wind and the Southeastern Massachusetts Building Trades Council signed a Project Labor Agreement (PLA) for the 800-MW Vineyard Wind 1. It’s the nation’s first PLA for the offshore wind industry and it ensures that there will be talented and skilled laborers available during construction to meet the project’s needs and deliver the project on schedule.
GWO Basic Safety Training is the globally recognised standard for the industry and is likely the most important skill to acquire for those interested in project development. Some organisations and labor unions are already laying the groundwork - Massachusetts Maritime Academy has partnered with Reylon Nutec, to deliver full GWO training at their Buzzard’s Bay campus.
This initiative is just one product of Vineyard Wind’s $2 million investment into local workforce development. Commercial divers from the Piledrivers and Divers Local Union 56 of the New England Regional Council of Carpenters worked with the Massachusetts Clean Energy (MassCEC) to acquire the requisite training.
Similar programs will be needed elsewhere sooner rather than later as more projects enter development down the East Coast.
Research and Development
In addition to supporting infrastructure and supply chain developments for the industry, the Biden order has also delegated significant funds towards research and development in the sector.
The National Offshore Wind R&D Consortium will award $8 million in grant funding for 15 offshore wind R&D projects. Funding will be awarded through a competitive process for projects specifically focused on the following areas:
- Offshore support structure innovation
- Supply chain development
- Electrical systems innovation
- Mitigation of use conflicts to reduce barriers and costs for offshore wind development
Furthermore, the executive order also promoted requests for research proposals to support more than $1 million in grant funding to improve understanding of the impact of offshore renewable energy for the benefit of non-industry stakeholders including coastal and fishing communities.
This is only the beginning
30GW is only the start – the Biden administration sees this initiative as a stepping stone towards a potential 110GW by the year 2050. Technological advances in wind power generation continue to reduce costs and increase efficiencies, while new innovations like floating wind show potential for more than 260GW by 2050.
The fire being lit offshore would not be possible without the decades of experience and perseverance from wind leaders like those behind Vineyard Wind. Now, converging with full federal support, it’s without a doubt that there are significant economic opportunities for early entries and market makers.
The offshore wind revolution in the US has officially begun – and it’s not too late to be a part of it.