The Block Island Wind Farm started generating power from its five turbines in 2016. Despite its modest scale, it led to a major realisation: the sheer potential of the off-shore wind sector in the United States.
Three years on, the industry has attracted global attention and captured the imagination of the Eastern US. The vision is exciting, the direction of travel clear: a whole new energy sector. Wind turbines, made of American steel, built by local workers, generating up to gigawatts of power off the country’s populous coasts. Providing new jobs in renewable power generation, increasing America’s energy independence and transition.
Sizing the opportunity
Looking at the market in 2019, offshore wind has seen Power Purchase Agreements from New York State, New Jersey, and Massachusetts, with states such as Connecticut, Rhode Island and Maryland also making growing commitments. As of October 2019, nearly 5GW of offshore wind has been contracted for the US representing, nearly $18bn of anticipated investment before 2030. Additional projects and procurements are planned for 2020, as well as large new lease areas. This points to increasing contracted power and a 25GW market by 2030.
From if to when to how
In 2016, Block Island and Deepwater Wind answered the question of whether offshore wind could work in the US. The last three years of procurement and positioning have answered the question of ‘when’ would offshore wind become competitive in the US energy market. So now in 2019 the question remains, how does the sector pick up momentum and realise its potential?
At the early stages of any new energy infrastructure, the depth and capability of the supply chain is pivotal. A backlog of projects is forming – a welcome sign – but off-shore wind is still new, unfamiliar, and investors and other local stakeholders can be wary. Significant investment in infrastructure is needed, but investment continues to be needed for stakeholders in the offshore wind market as well. This group continues to expand to now include local suppliers, unions, trades and craftsmen, as well as local authorities and regulators.
Progressing the full market requires a locally focused approach. The people and skills need to be ready once investment is in place.
Progressing the full offshore wind market requires a locally focused lens. The people and skills need to be ready once investment is in place. That means approaching local stakeholders, politicians, community groups, environmentalists, fishermen, and energy suppliers, with a clear definition of the benefits and the costs.
Port and harbour design must be considered, and connections to the wider on-shore grid must be carefully master-planned and implemented. Adaptations to connect and integrate this intermittent source of energy within the existing grid will be also be needed.
Within the next 12 to 24 months, the industry will face a critical phase of physical execution of the early projects, which will set the path for realizing the offshore wind future for all the projects to come. It is important that these early projects have solid plans and investment to make them successful and there are useful lessons to learn from the European experience.
Local lessons, global potential
In the USA, the path for successful project execution lies through a mutual development strategy. By developing the right partnerships to build local capability, skills and solutions, these projects will greatly increase the odds for success. Building the local supply chain will also ensure that as the global offshore wind market heats up, the US project execution can continue with local support and meet its schedule and objectives, while being competitive in the global market place.
Local labour and supply chain partners will need to learn the needs and specifics of offshore construction and contracting to ensure competitive supply. Developers will need to understand the regulatory environment, and establish the availability of local supply, with adaptation of contracting and project planning to take advantage of what exists and to develop what will be needed.
The industry has every right to be expect off-shore wind will represent a great return on investment, and the start of a new chapter in the American energy story. Local suppliers are excited to take part. Where these two can meet and be effective will result in the long term competitive development and the sustainability of the US offshore wind market.