The U.S. Department of Energy (DOE), Office of Energy Efficiency and Renewable Energy (EERE), Wind Energy Technologies Office (WETO) have released a report titled “Offshore Wind Energy Strategies.” The report outlines strategies to accelerate and maximize the effectiveness, reliability, and sustainability of offshore wind energy deployment and operation in the United States. This report does not include commitments from any agency or entity and is meant to provide information on barriers impeding offshore wind energy deployment and effective strategies to facilitate successful industry growth.

REGlobal presents the key findings and a detailed analysis on the outcomes from the report…

Key Findings:

  • National targets and their potential outcomes. In March 2021, the U.S. Department of Energy, U.S. Department of the Interior, and U.S. Department of Commerce announced a national goal to deploy 30 GW of offshore wind capacity by 2030. Deploying 30 GW would mark a significant increase from the 42 MW of offshore wind energy currently operating in the United States. Reaching the 30-GW-by-2030 goal would generate enough electricity to power over 10 million American homes and establish the United States as a major participant in the global offshore wind energy industry. It would also create tens of thousands of jobs in a range of occupations that would pay at or above the national average and sustain more than $12 billion a year in offshore wind project capital investments. Attaining the 30-GW-by-2030 deployment goal could set the country on a path towards deploying at least 110 GW of offshore wind capacity by 2050. This level of deployment would supply nearly 6 percent of the Nation’s electricity from offshore wind power.
  • Offshore wind deployment has a unique set of challenges. Offshore structures and undersea electrical cables must withstand the harsh marine environment and construction and maintenance at sea requires specialized equipment and skills. Offshore wind energy is currently more expensive than more mature electricity generation technologies for a number of reasons—relatively nascent technology, the challenges of the marine environment, the cost of bringing power to shore via long submarine cables, less-established supply chains, and a more general lack of efficiencies gained with experience. Floating offshore wind technology suitable for deployment in deeper water depths, such as in the Pacific, is more commercially and technically nascent than the fixed-bottom support structures planned for deployment in waters along much of the Atlantic Coast.
  • The U.S. offshore wind industry has lagged Northern Europe’s. Electricity prices tend to be lower in the United States than in Europe, so it is more difficult for new technologies to be cost competitive in the U.S. market. Prior to states enacting mandates for offshore wind energy procurement, the United States lacked the supportive policies that drove the first decade-plus of European offshore wind energy deployment. In addition, while offshore wind on the Outer Continental Shelf benefits from having a single primary Federal agency with overall permitting responsibility, many U.S. entities are involved in the processes required to site and permit power plants in Federal waters and route cables through state waters, taking significant coordination and time. Needing to navigate unprecedented and evolving processes means that some early projects missed deadlines and struggled to secure power purchase agreements.
  • Despite the challenges, progress is being made to increase the speed and scale of U.S. offshore wind development. Over the last year, the amount of capacity in the offshore wind pipeline has grown 24 percent to 35 GW, 8 and state-level offshore wind procurement commitments have grown to 39 GW by 2040.  The Department of the Interior aims to review 16 Construction and Operations Plans by 2025 and published seven Notices of Intent from March through September 2021 to begin the Environmental Impact Scoping process for projects on the path to meeting that target. In May 2021, Vineyard Wind 1 was the first largescale project (~800 MW) to receive Federal approval for construction and operation. The project reached financial close in September 2021.

Strategic Priorities

The findings that underpin this report identified five policy and technology initiatives, or strategic priorities, that are seen as important potential mechanisms to realize U.S. offshore wind potential. These are:

• Increase demand for offshore wind energy and grow the domestic supply chain at lower cost. This can be done by considering expansion of Federal incentives related to offshore wind energy. Federal incentives could also promote economic development, job creation, and community economic benefits. Technology-neutral incentives may be the most efficient way to accelerate the deployment of clean energy technologies overall. However, technology-neutral incentives will favor lower cost, land-based technologies in the near term. Targeted incentives for offshore wind could accelerate technology maturation, cost reduction, and deployment. Such near-term advancements could help the offshore wind energy industry scale up at the pace needed to contribute sufficiently to deployment and decarbonisation goals.

• Reduce offshore wind energy costs through technology innovation and adaptations. Expanded and accelerated research and development in site characterization and technology advancement will increase power production, reduce financial risks and uncertainties of project development, and enable domestic manufacturing. New system designs are required for U.S. operating conditions, such as deep water in the Pacific, hurricanes in the Gulf of Mexico, and ice formation in the Great Lakes. Accessing wind resources in deep-water areas (~60 percent of the U.S. offshore wind resource) will be key to reaching long-term deployment goals. The deployment of floating offshore wind platforms will lag fixed-bottom foundations as the technology is still maturing, but will be critical to development in the Pacific, Gulf of Maine and other regions with deep waters. Installation, operation, and maintenance innovations that are adapted to U.S. sites and reduce dependence on scarce equipment would make offshore wind energy more cost competitive in the United States.

• Improve siting and regulatory processes. This can be done by increasing transparency and predictability, auctioning new lease areas, understanding development impacts, expanding stakeholder engagement, and facilitating ocean co-use. The number of lease areas will need to grow significantly over the next decade to meet state and Federal deployment goals. A regional planning approach may accelerate identification of additional wind energy sites and facilitate safe, equitable ocean co-use. The industry needs predictable and efficient regulatory reviews that are advanced by clear and efficient permitting processes. Interagency collaboration and sufficient resources for staffing, research, and monitoring are necessary to understand and mitigate offshore wind’s potential impacts on the marine environment, ocean co-users, and communities. Developing standardized practices to minimize or offset environmental impacts, where needed, will reduce potential risks that may otherwise impede project development.

• Invest in supply chain development. This includes customized offshore wind ports and vessels to establish a logistics network and attract further investment. Investing sufficiently in manufacturing, ports, vessels, and a diverse U.S. workforce will reduce the cost of offshore wind energy, increase the pace at which projects are able to deploy, and could contribute significantly towards the energy justice goal of achieving equity in economic participation in the energy system. Building a domestic supply chain and growing the industry will require dozens of port upgrades, numerous Jones-Act compliant vessels, and new factories for component manufacturing and assembly. The availability of this infrastructure and broader certainty about the project pipeline are necessary to unlock $12 billion per year in private-sector project capital investments as well as create tens of thousands of good-paying jobs and capture the broader domestic economic gains associated with these investments.

• Plan efficient and reliable grid integration to deliver offshore wind energy at scale. Strong near-term efforts focused on grid integration are necessary to enable large-scale incorporation of offshore wind into the Nation’s power grid and future energy mix without long delays or lost opportunities. In particular, facilitating collaborative, proactive, and long-term transmission planning and investing in phased grid development is vital to increase the certainty and pace of offshore wind energy development, drive cost reductions, and help identify options to optimize transmission infrastructure in a way that protects the marine environment and is compatible with existing uses of the ocean and the needs of coastal communities. Innovation, cost reductions, and domestic supply capabilities are needed in high-voltage direct current technology to enable development farther from shore.

Levelised cost of energy cost reduction targets and contributing factors

Offshore wind energy cost reductions are achievable with investments in some key areas. These include efficiencies gained through larger project sizes, bigger wind turbines, improved cables, and optimized foundation designs;  Lower financing costs made possible by decreased project risks as a result of industry experience and a robust, predictable project pipeline; Increasing energy production with larger wind turbines that access more consistent winds, enhanced control strategies, reduced energy losses throughout the system, and higher availability as a result of improved maintenance; Decreasing operation and maintenance costs by minimizing the need for at-sea personnel and reducing wind turbine downtime. This can be achieved through advancements such as designs that are easier to maintain, the use of remote monitoring and automation, and maintenance decision-making tools to optimize the timing and method of maintenance actions. Technical advancements in floating offshore wind energy as well as increasing wind turbine capacity and plant size could reduce the LCOE by nearly 55 percent by 2030.

Regional Considerations

Nearly 80 percent of the U.S. population is located in the 30 states that border an ocean or a Great Lake. These states can be grouped into the following regions: Atlantic (North, Mid-, and South), Pacific (including Hawaii and Alaska), Gulf of Mexico, and Great Lakes. To supplement the strategic priorities identified, a non-exhaustive list of near-term initiatives that could accelerate and maximize offshore wind energy deployment in each U.S. coastal region is provided in the report. These initiatives include brief summaries of each region’s development status and unique or high-profile characteristics.

Atlantic Coast: Initial, large-scale U.S. offshore wind energy development is occurring along the Atlantic Seaboard, which has a strong wind resource, large population centers, and high energy prices. As of June 2021, Eight Atlantic states have solicited a total of more than 15 GW of offshore wind generation capacity and committed to a total of 39 GW of offshore wind energy by 2040. There are 17 active commercial lease areas in Federal waters in varying stages of development. There is a deep-water floating demonstration project under development for the Gulf of Maine. Key areas of concern around delivering power to cities include limitations in cable routing options as a result of geographic constraints, potential points of grid interconnection, and transmission capacity on land.

Pacific Coast: In general, waters off the Pacific Coast are much deeper than off the Atlantic Coast. Therefore, floating wind technology is the only viable option for large-scale offshore wind energy development in this region. In particular, offshore California and Oregon have areas with very high wind speeds, though some of the best wind resources are not located near major population centers or existing high-capacity transmission corridors. Electricity prices in California, Alaska, and Hawaii are among the highest in the Nation. Large amounts of potentially lower-cost renewable energy resources are available in Pacific Coast states. Extensive use of ocean areas off central California and Hawaii for U.S. military testing and training have caused concerns regarding potential mission interference from large offshore wind power plants. In September 2021, the California Legislature approved legislation requiring the California Energy Commission to prepare a strategic plan for developing offshore wind resources and establish deployment targets for 2030 and 2045. Native Hawaiians have expressed the need to consider offshore development impacts to places and natural resources with cultural and spiritual importance, highlighting the need to engage local and indigenous communities early in potential project processes. Planning for offshore wind energy leasing is also underway in Oregon. Given the lack of data on or examples of floating offshore wind energy projects in the Pacific Coast region, there are significant stakeholder concerns about potential environmental and fisheries impacts, as well as possible limitations in suitable port and fabrication infrastructure.

Gulf of Mexico: With its relatively shallow waters, low average wave heights, and mild climate, the Gulf of Mexico presents many positive attributes for offshore wind energy development. The existing logistics and fabrication infrastructure for both offshore oil and gas and land-based wind along the Gulf Coast offers a great opportunity to contribute towards a regional and national offshore wind supply chain. The first Gulf of Mexico Intergovernmental Renewable Energy Task Meeting was held in June 2021 to begin coordinating offshore WEAs. However, unique conditions in the Gulf of Mexico introduce engineering and cost challenges, such as frequency and severity of hurricanes, low average wind speeds, and relatively weak soil strength (necessitating deeper foundations). Demonstrating cost competitiveness in this region may prove difficult considering its relatively low electricity prices and abundant natural gas resources. Given the energy intensive infrastructure in the region, there is a need to consider and mitigate the cumulative impacts of development.

Great Lakes: In general, this region has a strong wind resource, smaller average wave heights, less extreme weather, and less need for corrosion mitigation than the open ocean. In the Great Lakes, major population centers and energy markets are located on or near lake shores, along with major transmission corridors and potential interconnection points. Electricity rates are low relative to much of the country, with significant amounts of renewable energy provided by land-based wind power plants in the Midwest. Individual states will have jurisdiction over offshore wind energy projects in their respective state waters. From 2008 to 2013, DOE funded the Great Lakes Wind Collaborative, a multisector collaborative facilitated by the Great Lakes Commission to address regional challenges to offshore wind energy development. A demonstration project off Ohio in Lake Erie has been in the design and planning phase for several years, and New York State is conducting a Great Lakes offshore wind feasibility study. The Great Lakes region has a strong maritime tradition and extensive port and manufacturing infrastructure that could be adapted for offshore wind energy. However, large wind turbine installation vessels capable of lifting contemporary offshore wind turbines of 12 MW or larger are too wide to navigate through the locks of the St. Lawrence Seaway to reach the Great Lakes from the Atlantic Ocean. This creates a unique installation challenge that may limit deployable wind turbine size and realization of certain economies of scale in the region.

Additional Consortia

Collaborations are needed to accelerate and maximize the effectiveness, reliability, and sustainability of U.S. offshore wind energy deployment and operation. Further work and collaboration are needed across all strategic priorities—for R&D, testing and demonstration, data sharing, strategy development, infrastructure buildout, and overall planning. Numerous federally funded entities are already established in this regard. These include:

 • The National Offshore Wind Research and Development Consortium was established with funding by DOE and the New York State Energy Research and Development Authority to support R&D activities that reduce cost and risk of offshore wind energy development projects throughout the United States. Members include representatives from six states and industry from across the country.

• The Ocean Energy Safety Institute is co-funded by DOE and BSEE to improve the safety and environmentally sustainable development and operation of offshore energy production, including oil and gas, hydrokinetic energy, and offshore wind energy.

• DOE’s Grid Modernization Laboratory Consortium leverages national laboratories to collaborate on the goal of modernizing the nation’s grid.

• The National Oceanographic Partnership Program can facilitate interagency co-funding of offshore wind energy research. For example, in January 2021, DOE issued a Funding Opportunity Announcement for environmental research in permitting in conjunction with the National Oceanographic Partnership Program and with funding from BOEM.

• BOEM’s Regional Task Forces are non-decisional, intergovernmental groups that facilitate coordination among Federal, state, local, and Tribal governments regarding the wind energy leasing process. Members share information about existing activities and marine conditions and provide updates on regional offshore wind goals.

The complete report can be accessed here