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Europe has built a thriving and affordable offshore wind industry while fostering a local and international supply chain. With decarbonization commitments and significant offshore wind targets established, the US industry is ready to succeed. How can the US follow Europe’s lead and develop a strong market?
Ambitious targets — utilizing available resources
The US offshore industry started over ten years ago with Cape Wind and the vision of MassCEC to establish an offshore wind port.
The country now has an ambitious target — 30GW of installed capacity by 2030. To meet this target, it would be impossible to rely exclusively on the European offshore wind manufacturing base to cater to all future demand.
Many consider the US to be abundant with industries that can adapt to create an offshore wind supply chain, by utilizing existing port infrastructure and upskilling a variety of workers.
The US is not identical to Europe, from differing weather patterns to seabed geology. These two factors alone require specialist skills to undertake seismic, extreme wind, and wave assessments to model scenarios for developments. Such significant differences need to be considered and local knowledge is crucial.
By developing this market and removing ultimate reliance on the European industry, the abundant supply that will come from renewable energy generation will drive down prices for consumers.
Learning from experience
The US offshore wind story to date has been European led, but that is swiftly changing as developers and suppliers localize. New York and Virginia have both learned from the European market, specifically around development and investment decision phases. Most US projects have been designed using European standards, with turbine equipment being sourced and supplied from Europe.
As US-based suppliers continue to engage with the growing sector, the market will become much more competitive compared to Europe. The players already in the US market and those new to it have a better understanding of local conditions. Notwithstanding inflationary pressure from the ambitious 30GW target, it is likely that these suppliers will become more effective and competitive in the long term.
We expect to see the offshore wind sector resembling that of the onshore sector, with large industrial entities being financially and technically capable of executing projects on a turnkey basis. From our experience, we see optimal project success when a multidisciplinary team is procured allowing for a broad view across the work scope, from structural design to digital modelling. By procuring a project with this consideration, the industry could eclipse rivals in Europe.
Further ashore — creating a thriving industry
To date, most energy investors and suppliers have been domestically focused, with few venturing outside of the US industry to invest. As a new manufacturing base emerges, it is possible that the country will become a manufacturing powerhouse for the offshore wind industry — a huge investment opportunity. The US can also become an exemplar country and play a leading role in certain South American markets through supply chain development.
However, this comes with a caveat. It is likely the APAC offshore wind manufacturing industry will be an attractive alternative for emerging markets, with few local procurement restrictions in South America. Taiwan and Korea, economies traditionally reliant on exports, could well see some successes here. From our experience across the APAC offshore wind industry, the operations and manufacturing market is growing at rapid speed, so the US must work hard to get ahead.
Key considerations for success
From our experience working across European offshore wind developments, we are certain of one thing — the US industry is gaining significant momentum with considerable potential to rival Europe in years to come. A few considerations:
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Use local specialists who understand the market yet can bring expertise from across the global industry
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Engage with local supply chains to establish a solid manufacturing base to localize production and drive down program costs
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Look closely at the UK market — most like the US — and the lessons available by establishing industry relationships
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Resource projects effectively, take advantage of the skills available in the market, and consider multidisciplinary teams to support cost-effective program delivery
A prosperous future
Excitement is building and it’s just a matter of time before the US industry becomes even more attractive for investors. The European market serves as a helpful blueprint for the US market to take guidance from. However, the country now needs to take the blank canvas opportunity and establish itself as a world leader for offshore wind — we’re excited to be a part of the progression.
