President Joe Biden’s administration on Tuesday christened the US offshore wind industry at commercial-scale, approving the construction and operation plan (COP) for the 800MW Vineyard Wind 1.
The move clears the way for financial close on America’s first utility-scale project ahead of a start to construction in the second half of this year.
Senior administration officials said greenlighting the project less than four months after Biden took office was an important step toward achieving his goal for the US to have 30GW of turbines spinning offshore by 2030.
“A clean energy future is within our grasp in the US,” said Interior Secretary Deb Haaland, whose department oversees energy development on US public lands including the outer continental shelf. “It's not an either-or decision. We can address our climate crisis and build a sustainable economy at the same time.”
They also claimed it was early evidence that a government-wide approach to offshore wind permitting is successful to advance a new industry that will address climate change, create tens of thousand of new jobs, diversify the nation’s energy portfolio, and represents a $50bn or more economic development opportunity this decade.
The Bureau of Ocean Energy Management’s (BOEM) tortuous 39-month environmental review of the project was marked by repeated delays and uncertainty over the outcome under former President Donald Trump. A positive result was never in doubt with Biden in the White House and came as an enormous relief for Atlantic states and the industry.
'Launch of an industry'
“Today’s record of decision (Rod) is not about the start of a single project, but the launch of a new industry,” said Vineyard Wind CEO Lars Pedersen. “It’s been a long road to get to this point but ultimately, we are reaching the end of this process with the strongest possible project.”
The 100-page document (not including memo attachments) authorises joint venture owners Avangrid Renewables and Copenhagen Infrastructure Partners to install up to 84 turbines in a lease area off the southern coast of Massachusetts.
The project's GE Renewable Energy Haliade-X turbines will be placed in an east-west orientation, with all having a minimum spacing of 1.85km (1 nautical mile) between them consistent with US Coast Guard recommendations.
The RoD, which includes an outline of mitigation measures to help avoid, minimise, reduce, or eliminate adverse environmental effects that could result from the construction and operation of the project, was still being reviewed, Pedersen said.
Prior to construction, Vineyard must submit a facility design report and a fabrication and installation report to BOEM for approval. These engineering and technical reports provide specific details for how the facility will be fabricated and installed in accordance with the approved COP.
BOEM Director Amanda Lefton said with the wind now behind the Vineyard project, her agency will redouble efforts to create greater certainty for the industry, state and local governments and other critical stakeholders with processes for permitting and identifying areas for future lease sales.
"The reason that is so important is because we need to ensure that we are creating the investments in America so that we can build a robust supply chain here," she said.
There was uncertainty whether the industry would happen. We definitely think investments are going to flow now.
Pedersen underscored that point, noting that a number of supply chain companies had been holding back investments in the US as "there was uncertainty if the industry would happen. We definitely think they are going to flow right now."
For Vineyard Wind I, domestic firms will supply the crew vessels and onshore cabling and power components, but those offshore will be manufactured and installed by specialised suppliers overseas with foreign-flagged vessels. The project will be staged at the Port of New Bedford, Massachusetts.
Pedersen said the project would now enter a new phase focused on construction and to “start delivering on many of the job, economic and environmental benefits that we and others in the industry have been talking about for so many years”.
Vineyard Wind 1 is eligible for the federal investment tax credit at 30% of capital expenditure. There has been widespread interest from banks and other investors in the project, given the sponsors’ deep balance sheets and the success CIP and Avangrid-parent Iberdrola have had building large-scale offshore wind farms in Europe.
When asked by Recharge for a Vineyard Wind I cost estimate, Pedersen said, "We don't speak publicly about the cost of the project."
First power in 2023
Immediately after financial close, preparations will begin for onshore infrastructure work, he said. Then, in 2022, offshore construction will start on the export and inter-array cabling and in 2023, installation of the foundations and turbines. “We will start exporting power to the grid in second-half of 2023,” said Pedersen.
Haaland and Commerce Secretary Gina Raimondo, who as governor of Rhode Island was instrumental in providing political support for development of the 30MW Block Island array in 2016, the nation's first, touted the job-creation aspect of Vineyard Wind.
They estimated 3,600 new positions although how many will be "high-paying, high-skilled union jobs" or permanent is unclear. Pedersen said about half will be in construction, which would be temporary, and the balance in operation and maintenance.
Approval of Vineyard Wind drew praise from clean energy groups, but harsh condemnation from a leading commercial fishing industry group.
American Council on Renewable Energy CEO Greg Wetstone applauded the move as a “vital down payment” on the administration’s 2030 offshore wind goal.
In a joint statement, Anne Reynolds, executive director of the Alliance for Clean Energy New York and Joe Martens, director of the New York Offshore Wind Alliance, called the approval a “quantum leap forward in President Biden’s commitment to address climate change and transition to clean renewable energy.”
They also said greenlighting Vineyard Wind sends a “clear and unambiguous signal that offshore wind will be a critical component of that transition”.
Liz Burdock, CEO of the Business Network for Offshore Wind, said: “This approval should signal ‘go’ to all the supply chain companies that were waiting to see if the industry would move to commercial scale construction.
“All indicators point to the federal government continuing to move other projects forward through the permitting process, taking into account the unique characteristics of each Wind Energy Area. Consistent approval of these pending offshore wind projects will help catapult the US as a leader in the offshore wind market and create thousands of well-paying jobs.”
Fishing opposition continues
Opposition to the announcement, however, rang out from the Responsible Offshore Development Alliance (RODA), a coalition of fishing industry associations and companies, which condemned BOEM’s issuance of the RoD in the “strongest possible terms”.
Roda slammed the agency for “continuing to abdicate its responsibility to the public and leave all decision-making to large, multinational corporations” that effectively doesn’t include mitigation measures to offset impacts to “critical ocean ecosystems and commercial fisheries”.
Lefton said BOEM did extensive outreach with ocean users including the commercial fishing industry. "They were consulted along the process and it did include mitigation measures as the project advanced," she said.
As offshore wind advances in the US, doing even more to work with the industry and others is going to be "incredibly important" to ensure BOEM is moving forward in a manner that is expeditious but also responsible and weigh impacts of different ocean users, added Lefton.
Pedersen highlighted that Vineyard has made available $32m in funding to the fishing industries in both Massachusetts and Rhode Island in case there would be any loss of revenue from the project. Even if that doesn't happen, fishermen can use the funds for investments in gear that will further allow them to fish safely within the project area, or for additional studies to help the industry transition to an era of co-existence with the wind industry.
"We hope that fishing and offshore wind can co-exist. We believe it can be done," he said. When asked if fishing groups might try to stop the project in the courts, Pedersen said that is "not something we are in control of".
"If someone wants to bring litigation it would be against the federal government and BOEM," he said, adding the risk there is that things have not been studied or haven't been addressed. Pedersen doesn't believe that is the case.
"We feel very, very comfortable... through this extremely thorough process that every concern has been analysed and addressed," he said.
There are currently 1.7 million acres (688,000 hectares) under lease on the federal outer continental shelf spread across 16 zones. This translates to 21GW of potential capacity for those lease areas using the National Renewable Energy Laboratory’s power density calculator for offshore wind.