The US is moving fast to be a key part of the expanding global offshore wind industry. Bolstered by state policies, the US has the potential to become the third largest market in the world with over 25 GW of offshore wind capacity by 2035.
This massive opportunity is not without challenges. One of the major issues is the lack of availability and development of onshore and offshore grid infrastructure as transmission and interconnection strategies greatly impact the economics and operation of offshore wind projects. Addressing transmission-related challenges has become ever more important as several projects queue up for grid connection.
With this background, Global Transmission organised a virtual conference on ‘Offshore Wind Transmission, US’ on September 23-24, 2020. The conference focused on the opportunities, technologies and solutions for the development of the transmission infrastructure needed to support the envisaged growth in offshore wind capacity in the US.
This led to a detailed discussion on the perspectives of regulators, government agencies, developers, utilities, transmission developers, technology providers, legal consultants and industry experts. The key takeaways from the conference are presented below.
Federal offshore wind development programme
James F. Bennett, Chief, Office of Renewable Energy Programs, Bureau of Ocean Energy Management (BOEM), discussed the future plans for offshore wind industrial development and the progress that has taken place with regard to projects that have already been awarded in the outer continental shelf (OCS). The presentation highlighted that the US is bestowed with world-class wind resources, particularly along the eastern and western coasts. In the presence of a buildable environment supporting conventional offshore technology and consistent market demand, the country has huge potential for offshore wind energy growth. In view of this, states’ leaderships have set impressive offshore wind goals for the future. A substantial part of this long-term goal has already been awarded or is scheduled to be awarded in the US states.
|States||Renewable goals (2030)||Offshore wind goals (MW)||Offshore wind: offtake|
awarded (MW) + scheduled (MW)
|Massachusetts||35 %||3,200||1,600 + 0|
|Rhode Island||100%||Unspecified||430 + 0|
|Connecticut||48 %||2,300||1,108 + 0|
|New York||70 %||9,000||1,826 + 2,500|
|New Jersey||50 %||7,500||1,100 + 2,400|
|Maryland||50 %||2,000||368 + 1,200|
|Virginia||30 %||5,212||12 + 0|
|Total||–||28,612 MW||12,544 MW|
Source: Presentation by James F. Bennett, Chief, Office of Renewable Energy Programs, Bureau of Ocean Energy Management (BOEM)
In addition to the above emphasised factors, technology and growth of wind turbine with deployed turbine capacity reaching 12 MW in 2021 from 2 MW in 2000, are expected to play a crucial role under the federal offshore wind development programme. Levelised cost of energy (LCOE) has also shown a tremendous trend in the Atlantic OCS. It reduced to 12¢ kw/hr in 2018 from 22¢ kw/hr in 2010, and has a pioneering projection of 6¢ kw/hr in 2030.
The key economic opportunities offered by offshore wind development include significant employment due to the labour-intensive nature of projects.
With these opportunities, several issues and challenges such as transmission, radar issues for civil aviation, protection of wildlife under the endangered species act, visual impacts causing a change in aesthetics, navigation, and commercial and recreational fishing need to be addressed for offshore wind development in the US.
The BOEM chief also described the authorisation process for OCS renewable energy projects. The first stage of planning and analysis, which takes around two years, involves an intergovernmental task force, a call for information and nomination, and area identification and environmental reviews. The next stage of leasing takes around one to two years and entails putting out a proposed sale notice (PSN) for feedback and comment, a final sale notice (FSN), an auction seeking potential bidders and the issue of the final lease to the winner. However, this just allows the winner to propose a wind farm and not automatically develop it as it is subject to several reviews and modifications (if needed). After the lease issuance, there is a five-year period of site assessment, which incorporates site characterisation through geophysical surveys, biological surveys, etc. and a site assessment plan (SAP). As part of the last stage, which usually takes two years, the developer puts forwards the construction and operations plan (COP), facility design report (FDR) and fabrication and installation report (FIR).
As per the above explained process, since 2013 several projects have reached various stages of development. In particular, around 16 wind energy projects are expected to be commissioned in the Atlantic OCS between 2020 and 2030. Some of the other areas that BOEM is exploring for wind energy projects are the New York Bight, California and Hawaii. As the construction and operations phase approaches for several projects, power transmission becomes increasingly important. With this background, transmission models that are currently been opted by BOEM are generator-developed transmission, third-party developed transmission and transmission company-developed systems.
|Stages||Number of projects|
|Competitive lease sales completed||8|
|Active offshore leases issued||16|
|Site assessment plans (SAPs) approved||10|
|General activities plans approved||1|
|Construction and operations plans (COPs): Under review Anticipated within the next 12 months|| 10|
Up to 5
|Guidance documents issued||10|
|Leasing under consideration||5|
Source: Presentation by James F. Bennett, Chief, Office of Renewable Energy Programs, Bureau of Ocean Energy Management (BOEM).
State offshore wind development plans
Jennifer K. Palestrant, Chief Deputy, Commonwealth of Virginia-Department of Mines, Minerals & Energy, discussed the status of offshore wind development in Virginia. As per the 2020 Virginia Clean Economy Act, the mandatory renewable portfolio standard (RPS) for Virginia is set at 40 per cent by 2030 and 100 per cent by 2045 while the mandatory energy efficiency resource standard (EERS) is set at 5 per cent by 2025.
Virginia has several advantages for the development of offshore wind projects. These include the availability of 18 miles of open sea with no overhead obstructions, central location to demand centres, stellar workforce, strong terminal infrastructure and robust intermodal connections and the largest marine industrial centre in the country. To take advantage of these, the 12 MW Coastal Virginia Offshore Wind (CVOW) project, located about 27 miles off the coast of Virginia Beach, was announced in 2017. Recently, in June 2020, the project reached a major milestone with the installation of turbines in the federal waters. It is expected to be commissioned by the end of 2020.
Bruce K. Carlisle, Managing Director Offshore Wind, Massachusetts Clean Energy Center (MassCEC), spoke about offshore wind development in Massachusetts, which had a landmark statute passed by the legislature in 2016. This move led to the beginning of competitive requests for proposals (RFPs) for long-term offshore wind energy contracts. Vineyard Wind won the 800 MW project under the first RFP organised in 2017/18. The second RFP, organised in 2019/20, also for for an 800 MW project, was won by Mayflower Wind. The two projects were successful in reducing carbon emissions by 3.36 million tons, and they created more than 9,000 jobs.
Adrienne Downey, Principal Engineer Offshore Wind, New York State Energy Research and Development Authority (NYSERDA), explained that New York is committed to 100 per cent clean carbon-free electricity by 2040, which is certainly the most ambitious target in the nation. In particular, the city aims to generate 9,000 MW of offshore wind, which is enough to power 6 million homes in New York, by 2035.
The first few wind projects in New York include the 880 MW Sunrise Wind and 816 MW Empire Wind projects. Together, they will power more than 1 million New York homes and bring a combined economic impact of USD3.2 billion to upstate, downstate and Long Island. They will seek an investment worth USD85 million in long-term port facilities and cutting-edge technologies. The 1,696 MW projects will support more than 1,600 jobs in project development, component manufacturing, installation, and operations and maintenance.
New York has also launched its second offshore wind solicitation of up to 2,500 MW. The solicitation includes a multi-port strategy and requirement for offshore wind generators to partner with any of the 11 prequalified New York ports to stage, construct and manufacture key components, or coordinate operations and maintenance activities. To support New York’s position as the hub for the offshore wind industry, NYSERDA, with the assistance of NY Green Bank, Empire State Development and the New York State Department of Transportation, will support this combined solicitation by investing in and upgrading the state’s port infrastructure. The USD400 million in private and public funding is comprised of USD100 million in Empire State Development grant funding, USD100 million in low-interest financing and USD200 million in private sector matching funds.
Dr John Hardin, Executive Director, Office of Science, Technology & Innovation (OSTI), North Carolina Department of Commerce, discussed that in October 2018, the Department of Environmental Quality released the North Carolina Clean Energy Plan, recommending support for an effort with regional states to develop a robust offshore wind industry and energy market.
North Carolina’s location is favourable to serve all markets along the East Coast, for both immediate and future demand. In addition, the presence of more than 30 manufacturing facilities in North Carolina and Virginia that provide components for the wind energy industry further favours the development of offshore wind. At present, North Carolina is home to three wind energy areas (WEAs) designated by the BOEM, of which Kitty Hawk WEA has been leased and is being developed by Avangrid Renewables.
Karen Douglas, Commissioner, California Energy Commission, began by stating that California is seeing some of the worst wildfires in its history. The state is witnessing huge smoke and weather issues, which are related to climate change. To address this, California has been setting ambitious renewable energy goals, which are currently set at 60 per cent of total energy consumption by 2030. California is also expected to accelerate its green power (carbon free) goals for 2045 and for that the relevant authorities are regularly organising workshops to chart a legitimate plan for achieving the set goal. In particular, the state is looking at different renewable energy portfolios that would allow it to achieve the set goal. In parallel, the aim is to maintain network reliability while managing climate issues and corresponding disruptive activities.
The state has considered offshore wind energy development and is exploring various model options for its development. As of now, no particular plan has been drafted for the future renewable energy mix, however, the ongoing analysis is expected to soon identify opportunities and constrains for California. The state is currently encouraged by floating technology and cost reductions exhibited by wind energy projects on the East Coast and is looking for knowledge transfers from successful developers.
In brief, California is some steps behind offshore wind development on the East Coast. The state is also preparing to address challenges related to transmission and military bases in the potential wind energy development areas. It is still in the process of determining a suitable strategy for achieving its future goals and is eager to learn from its counterparts on the East Coast.
Emerging technology options for US offshore wind transmission
Phaedra Taiarol, Supervising Engineer and Project Manager, Teshmont Consultants, discussed how offshore wind energy is currently being integrated through techniques such as alternating current (AC) connection substations without any mid-point reactive compensation and direct current (DC) connection – point-to-point with AC electrical submersible pump (ESP). Upcoming techniques for offshore wind energy integration include low frequency AC connection and multi-terminal DC connection.
He emphasised that the cost benefit analysis for the project should consider system reinforcement costs, market prices for electricity and other factors in addition to capital and operational expenditure. While choosing the technology, high voltage direct current (HVDC) should be preferred as it has several advantages such as precise control of power, multi-terminal operation, connection of unsynchronised systems, etc. In nutshell, AC and DC technologies are evolving and capacities of converters and cables are increasing. To leverage this opportunity, states should coordinate to optimise the integration of such large of amounts of power into the interconnected onshore power system.
Neil Kirby, Business Development Manager, flexible alternating current transmission system (FACTS) & HVDC, GE Renewables, discussed the evolution of offshore wind in Europe, the current status of offshore wind in the US, transmission options and some case studies. He opined that the US should take optimisation lessons in bulk offshore wind transmission from Europe as countries such as Denmark have already achieved 100 per cent power demand from onshore and offshore wind. In addition, the European models of offshore wind development have been hugely successful in achieving set goals (as in UK and Germany). Further, offshore wind in the US is rapidly advancing, power ratings and distance from shore is increasing, thus calling for evolution from AC to DC transmission technology is becoming available for DC multi-terminals and DC grids.
Subsea cables for the US OSW industry
Emmanuel Martin-Lauzer, Director of Business Development, Nexans High Voltage USA, discussed how the West Coast and the East Coast have very different needs with regard to cable requirements. The West Coast has deep water right off the coast and floating wind farms and thus it requires dynamic AC export cables. On the other hand, the East Coast, with an extended OCS and bottom-fixed wind farms, requires traditional AC or DC export cables.
David Slee, Principal Submarine Cable Consultant, Burns & McDonnell, talked about how offshore wind in the US has very different challenges than those faced in Europe. While it is possible to avoid major population centres along the coastal areas in Europe when landing offshore wind power, in the US, such landing sites are often in areas of high density. Landing beaches in Europe are protected but accessible as they are often public property. On the contrary, beaches in the US are located around precious spaces and are privately owned. In fact, the target network in Europe is significantly inshore while in the US it is right at the landing point.
Furthermore, offshore wind energy in US is facing several challenges related to difficult techno-commercial decisions, dynamic marketplace forming new supply chains and above all, a lack of strong leadership in the market. In particular, the floating offshore wind and deep-water transmission on the US West Coast is expected to be technically risky. To address this, fixed converter platforms and HVDC transmission is recommended. However, subsidy-free offshore wind might not be able to afford that technology without a catalyst.
Grid constraints and needs– utility perspective
Stephen B. Wemple, General Manager, Utility of the Future, Consolidated Edison, discussed options for interconnecting offshore wind, and legislative and regulatory developments to accelerate transmission and distribution investment. As per Wemple, an optimised process should be considered for the interconnection of offshore wind resources; the excessive use of undersea lines and underutilisation of limited interconnection points should be avoided; and deliverability to customer load should be improved.
Girish Behal, Vice President, Projects and Business Development, New York Power Authority (NYPA), explained that NYPA is actively engaged in collaborating with NYSERDA and other
state and federal agencies in the development of offshore wind resources in the state.
In 2019, NYPA spearheaded a study of the European offshore wind industry to help guide New York towards its goal of 9 GW of offshore wind by 2035. There was an emphasis on the associated transmission challenge as the actual interconnection capability continues to be low compared to the sum of interconnection injection capability of over 17,000 MW. To address this, NYPA is focusing on planning and partnership efforts (such as public-private partnerships).
Integrating large-scale offshore wind – RTO perspective
Suzanne Glatz, Director, Infrastructure Planning, Pennsylvania-New Jersey-Maryland Interconnection (PJM) Interconnection, discussed the offshore wind targets and upcoming capacity pipeline for PJM states. Public policy in the PJM planning process involves drafting renewable goals; charting reliability criteria, market efficiency, the state agreement approach and the interconnection queue; and the final regional transmission expansion plan. The PJM Interconnection queue is rights-based. All projects, onshore and offshore, compete for available grid capability and are responsible for upgrade costs to address system impacts. She also highlighted the difference between stand-alone generation and ocean grid.
Building offshore grids – transmission developer perspective
Janice Fuller, President of New Jersey, Anbaric, highlighted that proper transmission planning is crucial to the delivery of offshore wind energy as it enables the grid to absorb the full potential of offshore wind capacity; reduces the impact on the marine environment, the fishing and maritime industries, marine mammals and landfall communities; reduces ratepayer impact due to reduced cable needs and fewer injection points/upgrades; and creates an efficient, redundant, resilient offshore grid, maximizing the benefits of wind. It was emphasised that a transmission system should be built in a way that it meets energy needs and climate goals; enables growth of renewable energy; catalyses economic growth with long-term and reliable modern infrastructure; and attracts and retains companies, institutions and families seeking environmentally responsible and economical power supplies. She also discussed the Texas and Maine models for offshore wind projects.
Design and construction of offshore links
Forest Rong, Vice President, Power Delivery, Underground & Submarine Transmission, Kiewit, talked about design and construction considerations from offshore submarine cables to onshore underground land cables where inter-array and submarine cables are used for the offshore part of the project while the overhead lines take over the onshore section of the project. The offshore submarine cable system involves route planning and design; survey, geotechnical and thermal investigation; cable system design; burial and protection; vessel, tools and equipment; environmental considerations; operation and maintenance; and decommissioning. The submarine cable landfall is of two types, namely, open trench/beach landing and open trench submarine cable landing that involves horizontal directional drill (HDD).
The onshore underground land cable system involves right-of-way (RoW); underground utilities; geotechnical and soil thermal considerations; construction moratoriums; construction/installation methodologies; environmental considerations; cable and system design; and electromagnetic field (EMF) requirement.
Financing offshore transmission
Sandeep Baidwan, Executive Principal and Co-Founder, Continuum Associates LLC, explained how project financing or non-recourse financing for any type of power or energy project is essentially financing a certain type and amount of risk. He emphasised that any good project financing model for offshore transmission should endeavour to minimise risk for all parties and reward or compensate them adequately for their contribution to the risk pie. In a free market paradigm with mature technologies, these things balance out and a harmonious balance is mostly reached.
There are macro-level challenges with meshed offshore transmission development in the US because the projects are novel and project financing is always precedent-based. Even Europe has only a handful of examples in a very different regulatory construct. There is reluctance from stakeholders from both sides of the fence – project developers and regulators. From the project developer perspective, AC transmission technology risks are mostly mitigated while contractual risk is moderately mitigated. For developers, unmitigated risk relates to US regulations and certain newer technologies such as subsea HVDC transmission. From a regulator’s perspective, project risk relates to potential stranded costs, who pays for the offshore transmission grid and who benefits the most.
Randy Male, Green Giraffe, talked about how in Europe there is a general trend towards a transmission system operator (TSO) coordinated approach for offshore grid connections wherein coordinated and bundled grid connections of several offshore projects improve overall efficiency. This approach requires a clear, reliable development path for all the projects considered for connection, which is currently not the case in the US. Under this process, OSW transmission assets will be sold to third parties such as institutional financial investors with low cost of capital. The TSO or third party grid connection on bundled basis for multiple projects possible particularly for multi-phase projects developed by one sponsor will require a clear consistent compensation mechanism. Onshore transmission upgrades needed for future projects may promote more efficient coordinated grid connections via either partnering among project sponsors or in collaboration with a TSO or a third party sponsor. TSOs could take over grid interconnection as seen in Europe. This may be tied to onshore grid upgrades to optimise cost efficiency since even currently planned projects may outstrip available transmission capacity along the northeast coast.
The way forward
Offshore wind transmission in the US is buzzing with activity to address the global climate change crisis with its recent policies and plans focused on meeting ambitious carbon emission reduction and renewable energy generation targets. But, success in meeting such ambitious targets depends on the timely execution of projects, innovative regulatory schemes, regional cooperation, technology and innovation, as well as addressing the country’s environmental and climate change concerns such the wildfire in California.