The US offshore wind industry is witnessing large-scale offshore wind generation. As of 2019, the US had a total capacity of 30 MW of offshore wind connected to the grid. The north-eastern states are driving strong demand for offshore wind energy and have together established huge offshore wind procurement targets. However, it is imperative to effectively connect offshore wind energy to the grid to reap clean energy benefits, as planned by various states in the US. Political push and regulatory initiatives to achieve clean energy goals have so far been the major market drivers for the offshore wind industry in the US, which has a target of achieving 22 GW of offshore wind generation by 2030 and 86 GW by 2050. However, the massive infrastructure buildout over a relatively short period of time has posed unique challenges for the country. For states to achieve their respective clean energy targets, the ability of offshore wind energy projects to connect to the grid in a predictable, timely and cost-effective manner is important. Therefore, transmission solutions that facilitate a strong, reliable grid, supporting offshore wind energy, need to be explored in order to satisfy the country’s increasing power demand.
Keeping this in view, the Federal Energy Regulatory Commission (FERC) recently convened a technical conference to determine whether and how the existing interconnection and merchant transmission facility frameworks in regional transmission operators and independent system operators (RTOs/ISOs) can accommodate anticipated growth in offshore wind generation in a cost-effective manner. Below are the key takeaways from the conference.
Progress in development of offshore wind
In order to meet its long-term renewable energy (RE) targets and to decarbonise the economy, various states in the US have been eyeing offshore wind, engaging in procurement on a large scale.
North-eastern states that have made offshore wind procurements include Maine, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Maryland and Virginia, with a total of 6,460 MW selected (contracted) and a goal of 28,530 MW by 2035.
Massachusetts has so far procured about 1,600 MW of offshore wind and has plans to procure an additional 1,600 MW in the next two years. Post the first wave of procurement, the state needs about 700-800 MW annually between 2030 and 2050 to meet its goal of net zero carbon emissions by 2050. Additionally, New York, New Jersey and Virginia are in the process of procuring another 7,540 MW cumulatively.
In July 2020, the Governor of New York State announced the largest combined clean energy solicitations ever to be issued in the US, seeking up to 4,000 MW of RE—including New York’s second offshore wind (OSW) solicitation, which seeks up to 2,500 MW of projects, the largest in the nation’s history.
Another key driver of offshore wind in the US is the requirement for electrification of transportation and heating systems, which in turn is anticipated to contribute to load growth in the country. This in turn cultivates the need for a well-defined transmission planning process.
The scale at which offshore wind is being generated and procured calls for a solid plan to ensure that offshore and onshore systems work together to support clean energy goals.
Challenges in offshore wind integration
The present system governing offshore wind transmission projects focuses on developing the generation facilities first and then taking the associated transmission facilities into consideration. Various states are also accepting proposals from developers that bundle generation and transmission together, creating a patchwork of proposals to deliver wind-generated power from offshore to a limited number of onshore interconnections. However, it is being realised that such an unplanned approach cannot continue.
There have been discussions in the past stressing on the fact that the country cannot afford to develop its offshore wind technology in an unsystematic manner, relying on partial measures being taken over a period of time. It is becoming clear that the existing principles may not be valid anymore as the changes required in transmission planning associated with offshore wind seem to be blurring the line between reliability needs vs economic needs (such as congestion relief and public policy needs). Moreover, it was highlighted that focusing on one project at a time would not ensure the large-scale transmission infrastructure required across the country to integrate offshore wind.
Lack of coordinated transmission policy
As the East Coast braces for up to 30 GW of offshore wind development by 2035, there has been limited coordination between the federal government, states and grid operators on the offshore wind transmission issue. The lack of a coordinated transmission policy is seen as an existential constraint upon the ability of the US offshore wind industry to realise its full potential.
A white paper released on October 26, 2020 by the Business Network for Offshore Wind—a non-profit organisation for the promotion of offshore wind—also recommended that policymakers, regulators and grid operators engage in long-term, inter-regional planning that quantifies all benefits and public policies set out by states.
Moreover, it is feared that FERC’s Order 1000 might not be working for inter-regional transmission projects—which might hold true for offshore wind projects as well. The Order was meant to promote greater regional transmission development and competition; remove barriers to the development of transmission; promote cost-effective planning and fair allocation of costs for new facilities; and foster competition between existing transmission owners and non-incumbent developers. Thus, the interregional aspects of the Order might need re-examination.
Unprepared onshore grid
The onshore grid needs to be upgraded to integrate large-scale offshore wind energy in the power system. It becomes imperative to develop a framework regarding who should plan, develop and build the offshore part of transmission and more importantly, who should plan and engage in the onshore transmission upgrades necessary to integrate offshore wind.
For instance, about 14,000 MW of offshore wind has been committed in PJM, whereas a cumulative of 15,000 MW has been committed in New York and New England, which will be contracted and developed in the next 10-15 years. For accommodating such large-scale offshore wind capacity, the northern states require about USD10 billion in onshore transmission upgrades, as estimated by the Brattle Group—an economic consulting firm in the US. Moreover, studies have found that it is not cost-effective to upgrade the onshore grid one interconnection at a time.
Interconnection queue, cost allocation model
The interconnection queue poses a major obstacle to efficient development of offshore wind transmission. The current process does not allow coordinated planning of the interconnection queue needed to maximise the limited number of good interconnection points on shore.
Furthermore, it has been observed that PJM, New York Independent System Operator (NYISO) and Independent System Operator-New England (ISO-NE) are overly reliant on the interconnection queue to determine their transmission needs and have been evaluating the transmission needed for reliability in an unintegrated manner.
Moreover, it was highlighted that the generation interconnection process has not proved to be successful in identifying either the low-cost interconnection points or low-cost transmission solutions to get the offshore wind energy onshore.
It has been recognised that the existing cost allocation models adopted by the RTOs/ISOs generally hinder the integration of offshore wind rather than exploring cost-efficient ways for the same. It is the present cost allocation model that might jeopardise future offshore wind transmission to the states as it is unclear who should bear what percentage of the costs in relation to the benefits derived. The cost allocation rules fail to assign costs to parties that will benefit from the additional offshore and onshore transmission required by states to meet offshore wind targets.
The need of the hour for offshore wind integration calls for a ‘transmission-first’ approach for future projects in which large-scale transmission facilities are built for anticipated generation to achieve economies of scale. The current regulations in the country do not include a transmission-first approach.
A transmission-first model would also require changes to the cost allocation rules. Moreover, it was highlighted that the present cost allocation model should be modified and based on a broader set of criteria including contributions of the project to system reliability, operational performance, economics and resiliency in addition to the public policy goals.
Well-defined regional framework
The development of a well-defined regional framework for offshore wind integration is recognised as pivotal as it would give certainty to the developers and suppliers, identifying the manufacturing needs and moving the supply chain forward for timely delivery of transmission projects. It thereby becomes crucial to identify how much transmission capacity has been planned for the next 10-15 years in a region/state in the US.
A significant proposal raised during the panel discussion was that short-term should be regarded as a 10-15 year period whereas long-term should be seen as a 30-year period. Presently, even a 10-year period is considered long-term. However, since transmission planning associated with offshore wind itself takes a minimum of a 10-year period, the definition of short and long term should be modified with reference to offshore wind integration.
Hybrid merchant model
It was brought to light that the existing merchant transmission model is not well suited for offshore wind as developers might face difficulty raising financing without guarantees that the generators will support their project. Other challenges also exist with the merchant model—for instance, a radial merchant line extending the PJM grid without connecting to another RTO or an identified generation project is not eligible to receive interconnection rights under PJM’s tariff.
It was concluded that the current merchant transmission model does not work, and instead, a ‘hybrid merchant’ investment model that would include merchant features, such as absorbing cost overruns and building facilities on a fixed-fee basis, should be considered.
Technical innovation has been recognised as key to the development of future offshore wind in the US. However, along with technical innovation, the industry requires flexibility in its approach to integrate offshore wind at the regional level, with varying targets and plans of different RTOs/ISOs.
Since the generation interconnection process has not proved to be very efficient in bringing offshore wind energy onshore, a possible alternative solution, namely, multi-generator collector lines with high voltage direct current (HVDC) technology could be looked at.
Moreover, it was proposed that a planned mesh network (PMN) should be adopted, which would prove to be more beneficial than the existing radial generator lead line (RGL) model. The PMN would be an HVDC backbone network that would gather power from multiple wind projects. A few panellists also urged FERC to declare PMN as the preferred offshore transmission infrastructure.
Various offshore wind energy projects have been planned in the US. Adequate transmission has been recognised as the key to unlock the potential of the huge influx of offshore wind energy.
A total of 28,530 MW of offshore wind is planned by 2035 for eight eastern states—Massachusetts, Maine, Rhode Island, Connecticut, New York, New Jersey, Maryland and Virginia. Of this, 6,460 MW has been contracted and an additional 7,540 MW is being procured by New York, New Jersey and Virginia. Further, the committed procurement is in the range of an additional 14,000 MW of offshore wind.
|Project||State||Developer||Capacity (MW)||Expected completion|
|Mayflower Wind – Connecticut||Connecticut||EDPR/Shell||408||NA|
|Garden State Offshore Energy||Delaware||Ørsted/PSEG||1,050||NA|
|Aqua Ventus Demonstrator||Maine||Aqua Ventus||12||2021|
|Empire Wind||New York||Equinor Wind US LLC||816||2024|
|Kitty Hawk||North Carolina||Avangrid||2,500||2030|
|Mayflower Wind – Massachusetts||Massachusetts||EDPR/Shell||804||2025|
|South Fork||Rhode Island/Massachusetts||Ørsted/Eversource||130||2022|
|Park City Wind||Massachusetts||Avangrid/CIP||804||NA|
|Virginia Wind Energy Area – Phase 1, 2 and 3||Virginia||Dominion Virginia Power||2,640||2026|
|Vineyard Wind 1||Massachusetts||Avangrid/CIP||800||2023|
|Coastal Virginia Offshore Wind (CVOW)||Virginia||Ørsted/Dominion Energy||12||2020|
|Atlantic Shores Offshore Wind||New Jersey||EDF/Shell||2,226||NA|
|Ocean Wind||New Jersey||Ørsted||1,100||2024|
Note: Some of the key offshore wind projects were briefly discussed in FERC’s technical conference, however, these have been largely collated from Global Transmission Research’s database. NA – not available
Source: Global Transmission Research
Keeping in mind the rapidly changing energy mix, the US is exploring tools and seeking solutions to integrate offshore wind energy with the onshore transmission grid. To tap the abundant potential of offshore wind, a fresh evaluation of transmission planning, cost allocation and interconnection rules is required.
The level of offshore wind buildout required by the country calls for a paradigm shift from radial transmission bundled with each wind farm to a well-planned grid-based approach. The generator-led approach has been deemed as unsustainable, and a holistic model for a transmission-first approach is required for effective planning and execution of the transmission of offshore wind energy across the country.
A well-defined regional framework ensuring flexibility in regional planning is also sought. If not for thorough transmission planning, offshore wind would be stranded offshore forever, with no means to get onshore.
The article has been sourced from Global Transmission