Almost two years ago the Biden administration determined that offshore wind power would provide a key part of the nation’s clean energy goals.
President Biden himself said that by 2030, a substantial portion of the energy flowing into the U.S. electric power system—perhaps as much as 30 gigawatts of electricity, enough to power, by his estimate, 10 million homes—would come from offshore wind.
In November, Boston public radio station WBUR’s program On Point featured a discussion of how far the offshore wind industry in the U.S. had advanced and the many obstacles that impede more rapid progress. Program host Meghna Chakrabarti was joined by:
• Ali Zaidi, the White House national climate advisor
• Kris Ohleth, director of the Special Initiative on Offshore Wind, a non-profit think tank
• Amanda Lefton, vice president of development, U.S. East for RWE Offshore
• and WBUR environmental journalist Miriam Wasser.
Ironically, a little more than a month after the program aired, the largest windfarm under construction off the coast of the U.S.—Vineyard Wind 1—began sending a limited amount of power into the Massachusetts electric grid, with the promise of substantially more to come by the end of this January. And in early December, a smaller project located off the Rhode Island coast, South Fork Wind, began sending electricity to the grid in the town of East Hampton on Long Island.
The two projects are of significantly different scale.
Worldwide, there are nearly 11,000 “fully commissioned offshore wind turbines” in operation.
When completed, Vineyard Wind 1 will include 62 turbines placed on towers standing some 800 feet tall and spaced about a mile apart in the waters south of Nantucket Island. It will generate as much as 800 megawatts of power, enough electricity for some 400,000 Massachusetts homes. When South Fork is finished, it will include a dozen turbines and generate about 132 megawatts of power.
While those two projects may seem substantial, they are tiny on a global scale. Chakrabarti noted that worldwide, there are nearly 11,000 “fully commissioned offshore wind turbines” in operation. Currently, there are fewer than a dozen operating in U.S. waters. Why the enormous gap? And why have developers cancelled plans for proposed offshore power wind farm projects in Massachusetts and, just last fall, in New Jersey?
Ohleth, whose think tank is one of many organizations operating under the umbrella of the nonprofit Multiplier, which describes itself as “a 501(c)(3) organization that supports projects that are turning game-changing ideas into planet-saving impact,” pointed to several reasons for the slow growth of the “offshore wind vision” in the U.S.
Currently, there are few facilities in the U.S. manufacturing the components required for wind power installations. Until relatively recently, Ohleth said, there was insufficient domestic demand to warrant the huge investment required to build those facilities.
Now, while the demand is beginning to grow, potential manufacturers have been reluctant, or unable, to make those investments in the recent financial climate of inflation and high interest rates.
Developers want flexibility to increase rates to reflect their rising costs while state utility regulators want to protect consumers…
According to Lefton, head of East Coast operations for RWE Offshore, a major windfarm developer in Europe and elsewhere around the world, those financial issues aren’t unique to offshore wind projects.
“This is actually a challenge that really any large infrastructure project is facing right now,” she said. “I think the difference for offshore wind is because we’re just getting this industry off the ground floor.”
Another issue: like many others around the world, the domestic wind industry continues to suffer from the disruptive impacts of COVID on the global supply chain. Those disruptions are further complicated by the logistical demands of the war in Ukraine that has “misdirected supply chain resources back to Europe” where, at present, virtually all the equipment required for offshore power generation—the turbine generators, the immense windmill blades that are often longer than a football field—is manufactured.
The war hasn’t affected just logistics. Because European nations have been driven to find alternative energy supplies to reduce their reliance on Russian oil and gas, she said, “there’s a much more sense of urgency” in Europe to increase the amount of renewable energy available.
Other major issues for offshore wind development are the complex, multilevel permitting process required for each project and the need to contract with different state entities to provide electricity and a fixed rate for as long as 20 years.
In a volatile world economy, deals that made sense when they were scoped out years ago may no longer be economically viable. Developers want flexibility to increase rates to reflect their rising costs while state utility regulators want to protect consumers from potentially limitless rate increases.
That kind of fixed rate contract was the principal reason that the Danish developer Ørsted backed out of two New Jersey projects—one of them already well underway—despite reportedly having to write off as much as $4 billion.
The permitting process is no less vexing. In Denmark, there is a “one-stop shop” through which a developer can deal with whatever permitting authorities may be involved for a particular project. In the U.S., a developer might have to deal with two dozen agencies—federal, state, and even local—starting with the federal Bureau of Ocean Energy Management (BOEM) which has jurisdiction over the siting and development of wind projects in all federal waters (more than three miles offshore.)
Zaidi, the White House climate advisor, said the Biden Administration has adopted the one-stop shop model and has “streamlined our permitting approach” for offshore wind projects. And despite the complex issues and multiple challenges facing the industry, and the Administration in an election year, Zaidi was confident that offshore wind power will be successfully developed.
“We know there are 47 gigawatts that are in the pipeline,” he said. “We know that over 20 gigawatts already have a path to being green lit for construction.”
