Commercial start later this year of Dominion’s 12MW pilot off the coast of Virginia represents a significant step in the US offshore wind market’s evolution and will serve as a “living laboratory” for the industry this decade, according to a new report from Business Network for Offshore Wind (BNOW).

The two-turbine Coastal Virginia Offshore Wind (CVOW) project will provide local supply chain experience and enhance federal, state and local government understanding of how regulatory structures impact the offshore wind development process.

The first fully permitted project in federal waters on the outer continental shelf will also expose areas requiring greater inter-agency coordination and communication and generate invaluable real-world data regarding turbine performance during east coast hurricanes, said US Offshore Wind Market Report & Insights 2020.

The US Atlantic offshore wind industry is forecast by the American Wind Energy Association to be set to see investment of as much as $57bn to install up to 30GW by 2030, and could support as many as 83,000 jobs by then – a far cry from the current 30MW installed in the form of the Block Island wind array off Rhode Island.

Liz Burdock, CEO of the advocacy non-profit group, said the recent drop in oil prices won't diminish demand for offshore wind. “Petroleum is key in the transportation industry, but offshore wind is focused on electricity,” she noted, adding that demand for offshore wind energy is growing because of its carbon reductions and inexhaustible supply.

“States still have renewable energy targets to meet, and that shift in attitudes isn't changing,” she said. Until now, the US offshore market has focused mainly on New England, New Jersey and New York which have better wind resource, higher energy prices and larger consumer markets.

The Virginia pilot will bring the industry's reach the furthest south to date and pave the way for Dominion's commercial-scale project that introduces a different business model for the US market.

CVOW, which has a hefty $300m price tag, excluding financing costs, will be in an 8.6 sq km area leased by the state about 43km from shore, adjacent to the western flank of a 456 sq km zone that the utility is leasing for commercial wind development.

Dominion is building the pilot in partnership with Orsted which is acting as engineering, procurement and construction contractor for the offshore phase. LE Meyers is performing land-based construction to facilitate interconnection with the utility’s Birdneck substation near Virginia Beach, while Siemens Gamesa will supply the turbines.

CVOW will lay groundwork for Dominion’s planned three-stage 2.64GW array – among the world’s largest – that “presents a uniquely vertically-integrated framework” in the US offshore wind market, according to the report.

Dominion, the state’s dominant electric utility, will serve as the leaseholder, project developer and operator, and buyer of the electric power. It will seek to recover project costs directly from its ratepayers. This contrasts with the industry's model of a third-party developer owner-operator selected by states through competitive tenders that enter PPAs with electricity distribution companies.

Virginia's General Assembly earlier this month passed landmark clean energy legislation that doubles its offshore wind goal to 5.2GW and clears the way for big deployments of wind, solar and storage.

Elsewhere, the report said it appears unlikely the Trump administration will auction additional offshore wind energy areas before the Bureau of Ocean Energy Management (BOEM) issues a Record of Decision (ROD) for the final Environmental Impact Statement that Vineyard Wind requires to begin construction on its pioneering $2.8bn development south of Massachusetts.

If this occurs as programmed on 18 December, then decisions by BOEM on seven other projects with construction and operations plans from Maryland to Massachusetts should follow in a more timely manner, it added.

BNOW believes the domestic wind vessel, maritime and port industries will continue to mature this year, creating jobs and helping drive down offshore wind project costs. It contends that 2020 will be the “year of the offshore wind vessel” in the US.

“Additional crew transfer vessels (CTVs) and service operation vessels (SOVs) orders will follow during 2020-21 as projects in New York, New Jersey and Virginia advance through the development and permitting processes. Forecasts suggest 50-60 CTVs and 4-8 SOVs must be built in the next 5-6 years to service the projected offshore wind pipeline,” said the report.

Regional collaboration is also on the uptick as states increasingly find common interests to advance the industry such as collectively pushing the federal government on project permitting and additional leasing, and procuring offshore capacity from each other.

“States will always compete with each other for economic development, but it is clear that states understand they are stronger together if they cooperate – particularly in the development of offshore wind,” the report added.

In that vein, BNOW said it is imperative that collaborative approaches for grid and transmission solutions be developed on both coasts in order to justify the billions of dollars of investments necessary for establishing a local manufacturing and supply chain.

“Otherwise, there is a real risk that the continued expansion of the U.S. offshore wind industry will be stymied by an inability to integrate the electricity generated offshore into the onshore grid,” the report said.

BNOW also sees further engagement with commercial fishermen as crucial as the industry continues to accelerate. The fishing industry is divided over offshore wind with opponents asserting it will destroy their livelihood by interfering with traditional harvesting practices, while others believe the two sides can coexist, but more study of the potential negative impacts is necessary.

Last week, AWEA forecast the US offshore wind industry along the Atlantic coast would invest as much as $57bn to install up to 30GW by 2030 and could support as many as 83,000 jobs by this date.