Lo and behold: After a sleepy long weekend across much of the Western world, Dong has made precisely that announcement. Suddenly the US offshore wind market looks a very different place.
Denmark-based Dong has built more than one-third of the world's existing offshore wind capacity, or about 2.5GW, and it has 1.4GW currently under construction. No company is better equipped to judge the economic and technical viability of a new market.
The US offshore wind sector, such as it is, has had an up-and-down 2015.
Cape Wind, by far the country’s most high-profile project, was put on hold in January after a marathon battle with well-funded local opponents.
New Bedford, Massachusetts – whose port last September signed a lease to act as Cape Wind's onshore staging area – has now reportedly turned its prayers for economic revival to a proposed waterfront casino instead.
In happier news, Deepwater Wind’s Block Island project, off the Rhode Island coast, last month nailed down its financing, with offshore construction set to commence this summer.
But at 30MW, Block Island is not big enough on its own to spark the creation of a competitive US offshore wind supply chain. Block Island was always going to be a stepping stone to something larger.
Even in the smoothest scenario, it would be years before Dong erected its first turbine in US waters. For starters, there is no clear route to market for any electricity generated off the Massachusetts coast. Cape Wind never managed to secure PPAs for its full output, which weighed heavily on the project.
That could change, however, if a bill proposed earlier this year by an influential Massachusetts lawmaker is approved, requiring the state’s utilities to steadily buy more offshore wind.
With Dong in the picture, that bill’s legislative journey is sure to attract many more eyeballs.
Relatively little is known about the zone Dong is looking at. The lease Dong plans to acquire was only awarded in January – to UK-based RES, another experienced European offshore developer.
RES paid just $281,285 for the lease – which covers 760 sq km of surface area, and could hold more than 1GW of generating capacity. Two of the four Massachusetts zones up for grabs in that auction did not receive a single bid.
Dong will have until January 2016 to submit a Site Assessment Plan to the US Bureau of Ocean Energy Management, outlining its plans for assessing the zone’s wind resources. Upon approval, Dong would then have four and a half years to submit a Construction and Operations Plan.
Such things should be all but routine for Dong, although inevitably there will be challenges to working within an entirely new -- and still inchoate -- system.
But any scepticism about the potential of US offshore wind should, for now at least, be overshadowed by Dong's announcement.
Dong, whose largest shareholders are the Danish government and Goldman Sachs, is a behemoth within the European offshore wind sector, having built one-third of the world's capacity. It has deep experience – and a sterling track record – in every segment of the industry, from project development through construction and into the O&M phase.
Dong has partnerships with many of the industry’s key players, from financiers through the supply chain. Critically, it understands what the offshore wind industry is doing right today and where it must improve in order to survive.
There are still huge question marks about the prospects for offshore wind in US waters. But anyone supportive of the industry should take great comfort in the knowledge that Dong has put its shoulder to the wheel.
