US offshore will create $70bn supply chain and support 40,000 jobs

New York State's recent landmark offshore wind tender was a multi-gigawatt game-changer that truly kick-started this emerging new American industry. It was a moment US offshore wind had been eagerly awaiting — and it exceeded expectations. In one fell swoop, the 1.7GW awarded by the Empire State to Equinor and Orsted's venture with Eversource almost doubled the size of offshore wind projects under contract in US coastal waters, which now exceeds 4GW.

Moreover, it represents a utility-scale down payment on what has now reached 20GW — and counting — of offshore wind power approved or committed to development by eight East Coast states. New York State also committed to training 2,500 workers and investing in ports and service facilities necessary to tap America's world-class offshore wind resource. Codified commitments to invest in offshore wind, a qualified workforce and local facilities will drive the industry to fully consider the business case and make substantial supply-chain investment decisions.

We've come a long way in five years. What may have seemed to some like a clean-energy pipe dream has become a multi-billion-dollar project pipeline. In March, our white paper analysis forecast that US offshore wind would drive almost $70bn in capex for supply-chain businesses by 2030. The sector is also projected to support nearly 40,000 US jobs in the next decade. And that's just for starters.

Clean-energy competition powering states & scale for offshore wind

The road ahead is looking even brighter. It is competition among states for clean-energy leadership and jobs that is accelerating the scale of US offshore wind deployment. This competition continues to create a virtuous cycle of economies of scale that drive down price.

• New York — In his July 18 address, Governor Andrew Cuomo said: "New York will lead the way in developing the largest source of offshore wind power in the nation." He announced the first 1.7GW installment towards a goal of 9GW offshore wind by 2035, and also outlined agreements with Equinor and Orsted that will result in significant investment in New York state.
• New Jersey — In June, Governor Phil Murphy announced the state's award to Orsted of a 1.1GW contract, then the nation's first tender to exceed 1GW. Orsted's win included the company's commitment to invest in grants to support local infrastructure and businesses.
• Massachusetts — In May, Massachusetts Electric Distribution Companies, in coordination with the Massachusetts Department of Energy Resources, issued its second request for proposal (RFP) for offshore wind power projects. This was on the heels of the Bay State’s approval in April of its first utility-scale offshore wind contract, awarding 800MW to Vineyard Wind, which committed to delivering at a low price of $65/MWh. The project still has regulatory hurdles to overcome.
• California — The Golden State rivals New York in its ambitious clean-energy goals, recently committing to supply 100% of its power from renewables by 2045. California has a big lead in solar, but may find it hard to reach that target without offshore wind. Offshore wind requires floating foundations for deeper West Coast waters. Floating offshore wind projects are already generating 55MW globally, with another 275MW-plus in development. Industry leaders are looking seriously at California as an offshore wind leader.

These market and policy dynamics are critical because they shape and define the trajectory of US offshore wind growth. Right now, that trajectory is on an upward path — and gaining altitude fast.

No doubt many challenges remain, but so do their solutions, which these new contracts begin addressing. For example, Equinor’s project will use an innovative foundation design. Gravity-based foundations will be deployed, eliminating piling driving and reducing impacts on marine mammals. Additionally, Equinor has announced that the foundations will be fabricated in New York, quickly localising the supply of this key component.

Solutions like this one will be found quicker and smoother in an environment of increasing market momentum, industry confidence and state policy commitments — which is where US offshore wind is today.

What is becoming clearer is the growing size of the prize for businesses. Keep in mind the $70bn my team projected by 2030 for the US offshore wind supply chain represents only capex spending. Annual opex spending — which we're working to further quantify — promises to bring total business expenditures to more than $100bn in the next decade for the first 20GW of US offshore wind power.

Stephanie McClellan is a director at The Renewables Consulting Group (RCG) and director of the University of Delaware's Special Initiative on Offshore Wind (SIOW).