June will mark the sixth month of the Biden Presidency. In that short span of time, the US offshore wind industry has seen a flurry of supportive actions, regulatory progress, and even new legal precedent coming from the federal government. But it was in May that a crucial – and long-awaited – development took place that will shape the industry along the US’ vast coastlines for years to come.
Early this month, the Bureau of Ocean Energy Management (BOEM) released its final ‘record of decision’ for the 800MW Vineyard Wind 1 development of Massachusetts. This decision officially greenlights America’s first utility-scale offshore wind project, and is proof positive of the administration’s reliance on offshore wind to help reach its clean energy goals. This important milestones for an industry working to establish itself as the next great US industry – one with a keen ability to tackle climate change by supply clean, renewable energy, and creating a variety of sustainable, well-paying jobs and local economic development opportunities.
With these key developments, companies ranging from insurance and financial firms to aerospace, maritime, and oil & gas are looking at offshore wind with renewed interest. As they should: the Biden administration is giving his backing to offshore wind as a centerpiece of its plan to develop a fully clean energy grid by 2035. The Vineyard Wind decision instills industry confidence, spurring more investments and provoking further project developments and increased opportunities. Full construction and operations of the development is projected to create 3,600 jobs and over $200m in economic activity. This will require an expansive supply chain and local work force that is far from fully formed.
For companies looking for ways to diversify – particularly as economies work to overcome the Covid pandemic slump – now is the time to educate themselves on offshore wind and to focus on building out a localised supply chain. In order for the US to compete with emerging markets in Asia as well as mature markets within Europe, a robust local supply network will be needed. In other words, it will take exponentially more time, more money, and logistical hurdles if the US offshore wind industry relies on an international supply chain to establish itself in earnest. American companies also have the opportunity to own new R&D development for floating wind, which will be needed along the West coast and in deeper East Coast waters.
It is not only possible to develop a local supply chain, but the benefits of this will ripple through states and communities nationwide. In May, a partnership was announced between the Business Network for Offshore Wind and the National Offshore Wind Research and Development Consortium, National Renewable Energy Laboratory, the State of Maryland, the New York State Energy Research & Development Authority and the US Department of Energy to create an sector-specific supply chain roadmap, which will facilitate the acceleration offshore wind development in the US.
Supply chain development isn’t the only need. To fully capitalise on these milestone developments, the federal government must open up new areas within the Atlantic, Gulf, and West Coast to leasing and ensure more permitting consistency. It is also vital that we solve issues with the current transmission system: the country desperately needs to invest in an upgraded grid to bring offshore wind power to markets. This will require planning, coordination – including regional state partnerships and leadership in order to keep ratepayer costs down.
The good news is Washington is focused on the same problems. All indicators point to the federal government continuing to move other projects forward through the permitting process in a consistent and environmentally responsible manner, which will help localise supply chains, supporting regional economies, and allowing the US to compete in global markets. And the Biden Administration has proposed spending tens of billions of dollars on port and power infrastructure upgrades to support this ambition.
Looking into the future, the US market will likely be much larger than what is currently being projected. This is both a challenge and a welcomed opportunity. To achieve President Biden’s goal for a clean power grid, installing 30 GW of offshore wind will be just the start. More states are adopting 100% renewable energy goals or 100% decarbonisation goals and will look to offshore wind as a big part of the solution. And we may begin to see power purchase agreements from private entities as our own market matures. Overall, the current growing pains and constraints must be addressed as the industry matures, but solving these problems is creating unlimited opportunities.
· Liz Burdock is CEO of industry non-profit the Business Network for Offshore Wind, which is holding its inaugural Ventus awards later this year