Few in the US offshore wind power industry have been more of a driving force in getting the fledgling sector to take wing than Jeff Grybowski. He was chief executive of Deepwater Wind, developer of the nation’s first array, the 30MW Block Island; then became co-CEO of global pace-setter Orsted’s North America business, which has a leading 2.9GW development pipeline in the region; and has now stepped into the top job at US Wind, a potentially market-shaking independent aiming to ride the soon-to-boom wave of construction in the US Atlantic, with an eye on wider expansion driven by “the right projects”.

The combined promise of utility-scale clean power production and economic development of the sector in the US Northeast – where billions of dollars in investment is patiently waiting for the sector to get more steel in the water for the coming gigawatts of projects – has lost some its gloss due to a problematic regulatory process under Donald Trump’s administration, not least as Massachusetts’ delayed 800MW Vineyard Wind continues to wait on a final green-light from Washington.

But Grybowski is “extraordinarily optimistic” that the emerging market is at last heading in the right direction and is betting on a build-out reaching the 30GW of installed offshore wind plant many analysts had been forecasting until last year – and at unprecedent pace now given President-Elect Joe Biden’s announced ambition of having 12.5GW of capacity turning inside five years.

“Despite the feeling among some industry observer being angsty over delays and the general slowness of things, a tremendous amount has been happening over the last three to five years, and all of that work is not for naught,” he told Recharge in his first interview as US Wind CEO.

“Multiple large projects are positioned to move forward,” said Grybowski. “Some of [the perceived ‘lost time’] is about what it takes to build projects of this scale, they don’t happen overnight … and a three to five-year timeframe isn’t that crazy to go from development-start to construction.

I think when we are looking back half-way through the Biden administration’s first term, we’ll feel we were pretty silly worrying

“And I think when we are looking back half-way through the Biden administration’s first term, we’ll feel we were pretty silly worrying – our biggest worry will be where are we going to get all the equipment we need to get all these projects done?”

Right now, however, Grybowski – a lawyer by trade who before Deepwater Wind was chief-of-staff for Rhode Island’s then state governor – is focusing on US Wind’s 1.5GW MarWind development off Maryland, which US Wind targets building in stages, starting with a 270MW phase expected to cost $1-1.5bn.

The developer, majority-owned by Renexia, the renewables arm of Italy’s Toto Group, expects to reach first power in 2024 on the lead-off project, which has a 20-year contract with the state valued at $3.3bn on the basis of ORECs (offshore wind energy credits) awarded to the company at $131.94/MWh – the highest price off-take for a large-scale wind farm along the east coast.

And with Maryland expected to procure another 1.2GW in the near term – the next round of solicitations is foreseen being launched next year – Grybowski believes the “nimble and entrepreneurial” business model being shaped by the developer will have a good chance of building the full MarWind megaproject “quite quickly”.

“[US Wind] was one of the few entrants in the market in those ‘early days’,” he notes. “They saw something and were willing to make that bet when very few others would.”

MarWind hopes to capitalise on using some of a vast vacant swath of industrial port space in Baltimore, off Chesapeake Bay, as a fabrication and assembly site, occupying land previously owned by the Bethlehem Steel Corporation, the defunct American shipbuilding giant once one of the world’s biggest industrial conglomerates.

To further sharpen the project’s economics, Grybowski adds, US Wind is exploring use of larger nameplate turbines that had been scoped – much as has been done at Vineyward Wind, where MHI Vestas 9.5MW machines were dropped in favour of 12MW GE Haliades. “We are very much looking at the larger generation models that are on the market today.”

US Wind – like Orsted, Equinor, Iberdrola, Shell and other developers wading in off the eastern seaboard – is facing a formidable task in fashioning a supply chain to support its Maryland project, but Grybowski sees it being a challenge that, while daunting, will be solved by time.

“The supply chain in the US is a lot less mature than many of the projects are, it’s still gearing up. But that’s no surprise because it hasn’t had anything to do yet. There is certainly no lack of interest [among potential supply chain companies and state governments] in the [offshore wind] sector,” says Grybowski.

The “big picture” of 30GW of plant operating in the US Atlantic by 2030 is coming into focus, he says, though he admits “maybe the timeline we were all looking at shifted out a couple years”.

“I don’t think the market fundamentals have changed. The early development phase of this industry has been elongated a bit but not unreasonably,” says Grybowski, adding “if you had told me in 2015 we would be talking about 6-7GW of projects under contract [to utilities], that would have exceeded the high-end of my expectations”.

“It has happened – it is happening – quickly. And we are the ‘victims’ of that bounty.”

Grybowski reckons there is a “very good possibility” that initial organic industrial growth will create a virtuous circle that will cause offshore wind’s market to break free of “linear expansion”, pointing to some of the recently announced construction and assembly facilities announced for New York, New Jersey and elsewhere.

“In 2015, Cape Wind [the industrially infamous 468MW wind power project off Massachusetts ultimately shut down], was not happening – and it wasn’t a slow process for that project to be wound down. Block Island was a couple years late for permitting reasons. There were are couple of other industry ‘failures’. It hadn’t been a good excursion to that point.

“Now, as we get the back-end of the build-out of this first phase of projects – wind farms are coming online, you see activity in ports – there is an opportunity for a boom that is not just linear expansion but another ‘step function’, if you like, as policymakers see offshore wind coming into its own,” said Grybowski.

This maturation of the US offshore wind sector will not come down solely to a streamlining of government regulatory regime, however, he said. Comparisons drawn between the pack of smaller independent offshore oil developers that came of age in the late 1990s using new investment and operation models to monetise fields deemed uneconomic by the supermajors are worth investigating insofar as they help the wind energy industry move forward with the lowest levelised cost of energy.

“It is something we discussed extensively at US Wind – these small- and medium-size development companies that were doing ‘interesting things’,” said Grybowski. “They weren’t chasing volume for the sake of volume, they were chasing good deals and making money doing it. Quite a bit of innovation came out of those companies and much of it was adopted by the bigger players.

“I think there is space in the offshore wind industry for players that aren’t state-owned utilities and it’s good and healthy for the sector to have this perspective.

“Clearly there is a scale to this industry that in some regards benefits the super-large developers and oil & gas majors and utilities. But particularly in the US market where things are less prescribed and less driven by centralised [national government level] policy, there is still a place for companies that have different viewpoint, can move a little quicker.”

Grybowski said US Wind, which last year secured a $265m equity buy-in from infrastructure investor Apollo Funds, was hatching a business model organised around “a small group of high-performing people building a best-in-class development company”.

“Apollo sees the same thing everyone is seeing – it’s a once-in-a-generation opportunity – and [from the vantage point] of a major investor in global infrastructure that wants a greater role in a key market in the clean-energy ‘revolution’, if that isn’t too trite, offshore wind has a scale that is unique.

“Developers in this industry know everything we do is big and financially demanding, as will be the impact in terms of clear power production and economic development [from these projects once in operation].”

‘Big’ is what US Wind aims to be – but not on the grounds of size-for-its-own-sake, added Grybowski. “We are not going to be a one project company: we have interest in doing much more [beyond MarWind], so as opportunities present themselves, we will be pursuing them.

“But we will be very strategic in our approach. We won’t be playing in six different markets at one time, but we are not constrained geographically in taking opportunities and, frankly, we will be looking to create opportunities for ourselves.

US Wind’s prospecting list, he added, could “absolutely” include “the right projects” in the offshore or floating wind sectors off the US West Coast or in the US Gulf.

Capital expenditure going into the US offshore wind industry is expected by some analysts to eclipse that going into the country’s offshore oil & gas sector by mid-decade, while the American Wind Energy Association (recently absorbed into the American Clean Power Association) forecasts that as much as $60bn would be spent install 30GW of capacity by 2030, bringing with it over 80,000 jobs in the US Northeast.

“No one has left the party. People are still trying to get into the party,” said Grybowski. “And it may have started slow but it’s going to be quite a party in a few years.”

Wind

'US offshore wind may be starting slow but it is going to be quite a party'