Permitting and consent are quite complex in the nascent US offshore wind industry, despite otherwise compelling market fundamentals, industry executives stressed in a keynote panel at the opening of the virtual version of the US Offshore Wind 2020 conference.
“One challenge [for US offshore wind] is about permitting. It is quite complex. What we observe with the first project – Vineyard Wind – is that it is a difficult journey to make,” said Grzegorz Gorski, chief operating officer at the offshore wind joint venture between French and Portuguese utilities Engie and EDPR.
“Certainly here, some streamlining will be useful.”
To be able to build an offshore wind farm in the US, developers have to go through a myriad of local, state and federal permitting processes that can be time-consuming and expensive as delays can mean the loss of support otherwise granted.
The US government only last week had released a draft-supplement to its 2019 environmental review for the pioneering 800MW Vineyard Wind offshore project and now expects to issue a final permitting decision in December.
The industry had anxiously been awaiting that document since the surprise decision in August 2019 to delay the first utility-scale offshore wind project by the US Bureau of Ocean Energy Management (BOEM) - a federal agency that oversees commercial offshore wind development on the outer continental shelf.
The delay meant that Vineyard, a joint venture between Iberdrola’s Avangrid and Copenhagen Infrastructure Partners, now won’t qualify for federal investment tax credit (ITC), which makes its economic case more complicated.
Lars Thaaning Pedersen, CEO Vineyard Wind in a pre-recorded 'fireside chat' for the conference, said:
"[After Cape Wind fell through] there was a lot of apprehension — would the market ever happen or would it be a string of [unbuilt] projects. I think over the last year and a half, we have seen quite a lot of excitement.
“Unfortunately, the permitting challenges for offshore wind has also cooled off some of the interest.”
As at the same time Asia and Europe are growing so tremendously in offshore wind, suppliers need to carefully consider where to put their resources, he cautioned.
“I think a large part of the supply chain has become convinced about the potential in the market. There’s some doubt about the timeline and how rapidly we can deploy it, but I think most people see that offshore wind will happen and it’s more a question of how quickly it can happen.”
Sven Utermöhlen, chief operating officer EU and New Markets at RWE Renewables, at the opening panel also urged that permitting and consent need to be as transparent and predictable as possible.
“How do I get to a consent? What are the steps exactly that I need to take, and who in the end will have to take which decision? What are the rules of that that everyone can play by – between the developers, the NGOs, the interest groups and stakeholders, the regulators? Who are the permitting authorities?” Utermöhlen asked.
“The more that can be clarified, and the path to a permit be clear and predictable, the better it will be.”
Utermöhlen also said that coming from a European perspective, “you have to sort out the grid connection question.”
“The earlier that is clear, the rules, the process of how to get a grid connection … the earlier that is clarified, the better it is.”
On the positive side, the RWE executive said there is a great potential along the US East Coast for supply chain opportunities, or example in foundation manufacturing.
“It is important for this [the supply chain] to take off. The basics are all there.”
Gorski also mentioned that an upside of US offshore wind is that many states early on had set long-term targets for offshore wind, providing great visibility to developers.
Leigh Collins contributed to this article
Available for a limited time only, watch the full session on-demand for free here