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1 April 2021

Biden makes repairs ahead of second-start for US offshore wind

The Biden administration has finally unveiled a stream of measures to boost the nascent offshore wind industry in the US. The headline figure: a 30 GW target for 2030, while long-term intentions line up a potential capacity of 110 GW by the middle of the century.

The announcement, made on Monday by the Departments of Interior (DOI), Energy (DOE), and Commerce (DOC), outlines a range of practical measures, which aim to streamline the planning and development of offshore wind farms – primarily off the east coast of the country. This will include opening up new swathes of seabed acreage, as well as new public finance for the domestic supply chain.

The plan comes as part of President Biden’s wider objective of eliminating greenhouse gases from the country’s power mix by 2035, and from the entire economy in the long-term – an agenda which Republicans are toting as uneconomic in a bid to sustain the oil and gas industry.

Previous expectations had suggested that Biden would publish a target of 25 GW, which many would still have considered ambitious given the current barriers to development in the US. However, 30 GW could trigger capital investments of more than $12 billion per year on both coasts of the US, according to the government, along with the direct creation of 44,000 “good-paying union jobs” and indirect creation of 33,000 more.

By 2030, the plan aims to provide enough power for 10 million homes and cut 78 million metric tons of carbon dioxide per year.

This also adds clarity to Biden’s previous statements to ‘double’ offshore wind in the US through the decade. Doubling – in this sense – could well refer to doubling the size of the pipeline over the period. It could similarly mean doubling the 1.7 million acres of waters that have been made accessible for offshore wind lease auctions.

The US currently has just 42 MW of offshore wind capacity installed: 30 MW through the Block Island wind farm in Rhode Island and 12 MW from a Dominion Energy pilot in Virginia. While the pipeline for projects in development has now swollen to 23.5 GW, most of these remain in pre-approval stage, having faced severe hold-ups in the Bureau of Ocean Energy Management’s (BOEM) Environmental Impact Assessment.

Through the 30 GW plan, BOEM now plans to advance the lease sales and complete the review of at least 16 offshore wind projects by 2025 – representing at least 19 GW of capacity. Up to 10 new projects could have reviews initiated by the end of the year.

A new priority zone has also been allocated to the shallow waters in the New York Bight – an area stretching between Long Island and New Jersey – with a lease sale expected in the next 18 months.

The selection of this area falls in line with the surge in state-led pledges for offshore wind capacity through to 2035. New York alone has set a target to have installed 9 GW of capacity in this timeframe, with New Jersey promising an additional 7.5 GW. Targets from other states, including Maine, California, Massachusetts, Rhode Island, Connecticut, Maryland and Virginia, would bring the cumulative total of state-led capacity to 45 GW.

Along with the announcement, BOEM also published a Notice of Intent that it would prepare an Environmental Impact Statement to push forward the development of Orsted’s 1.1 GW Ocean Wind project in New Jersey, which should now be completed in 2024.

Under current schedules, this will make Ocean Wind the third commercial offshore wind project in the US, following the installation of Avangrid and CIP’s 800 MW Vineyard Wind project and Orsted’s 130 MW South Fork project – both in Massachusetts, both earlier in 2024. Following the installation of these projects, BOEM may also be expected to approve projects on both the east and west coasts including some from the list below.

Project NameCompletion Year (Approx.)

Capacity [MW]

Primary OwnerState
Maine Aqua Ventus202412Naval EnergiesMaine
Revolution2025704Orsted,Massachusetts
Skipjack2025120OrstedDelaware
Sunrise2025880Orsted,Massachusetts
Dominion Phase 12026880DominionVirginia
Empire Wind2026816EquinorNew York
Mayflower Wind2026804ShellMassachusetts
MarWin2026268US WindMaryland
Park City Wind2026804AvangridMassachusetts
Redwood2026150RCEACalifornia
Dominion Phase 22027880DominionVirgnia
Boardwalk20271000EquinorNew York
MarWin-Plus2028718US WindMaryland
Dominion Phase 32028880DominionVirgnia
Bay State20292000Orsted,Massachusetts
Atlantic Shores20292230EDF, ShellNew Jersey
Kitty Hawk20302500AvangridN. Carolina
Lease 0486/048720301000Orsted,Massachusetts
Ocean Wind+2030850OrstedNew Jersey
Mayflower Wind+2030796ShellMassachusetts
Garden State2030+680OrstedDelaware
Marine Aqua Ventus 32030+450U.O.MMaine
Maine Aqua Ventus 22030+450U.O.MMaine
Liberty Wind2030+1200AvangridMassachusetts

Having previously unveiled new subsidies for offshore wind, the new plan focuses more on direct upgrades required for supplementary infrastructure. Given the lack of staging sites for the onshore element of offshore wind farm construction, the government will invest $500 million into necessary port upgrades.

In addition to this, funding will also be allocated to the construction of one or two US factories for major components including turbine nacelles, blades, towers, foundations, and subsea cables.

Perhaps most important is the promise of between 4 and 6 new specialized vessels for turbine installations. The country currently has just one jack-up installation vessel available, with the Jones Act mandating that those used for offshore wind projects are US flagged and occupied by American crews. This has historically left project developers with the sole option of bringing components for east coast projects over from Europe on feeder barges, with Orsted announcing this as its plan for much of its 7.5 GW pipeline in the country, while US ship builders get up to speed. Developers like Dominion Energy, MiNo Marine and 2nd Wind Marine are at work trying to resolve this, Rethink Energy estimates that for a buildout of this scale at least 8 new construction vessels are needed by 2030, with an additional 200 smaller support vessels.

The extent of the funding for this plan is currently unclear, although the Department of Transportation’s Maritime Administration announced a Notice of Funding Opportunity for port authorities and other applicants to apply for $230 million for port and intermodal infrastructure-related projects.

The DoE’s Loan Programs office also released a fact sheet to facilitate up to $3 billion for the offshore wind industry through the Title XVII Innovative Energy Loan Guarantee Program.

Following the announcement of the plan, Secretary of Energy Jennifer Granholm said, “This offshore wind goal is proof of our commitment to using American ingenuity and might to invest in our nation, advance our own energy security, and combat the climate crisis.” Adding that the “DOE is going to marshal every resource we have to get as many American companies, using as many sheets of American steel, employing as many American workers as possible in offshore wind energy—driving economic growth from coast to coast.”

Objection to the plan has so far come primarily from the country’s fishing industry, which claims that the $1 million allocated to research the impact of offshore wind on fisheries is inadequate. Fishing groups often worry that massive turbines in the ocean would interfere with fishing routes and impact commercial species.

 

Other recent initiatives put through the Biden administration to aid the country’s transition to net zero emission, include the suspension of new oil and gas leasing auctions on federal lands and waters, as well as the cancellation of the Keystone XL pipeline to Canada. The President will travel to Pittsburgh later this week to announce details of a $3 trillion infrastructure spend, which appears set to outline further support for renewables and clean technology.

He has also rejoined the Paris Agreement, pledging to keep climate change to below 1.5 degrees Celsius, after Donald Trump removed the country from the international accord.

Through his four-year tenure, Donald Trump also promised to launch offshore wind as part of the country’s energy industry, but failed to permit energy projects, while the sector has exploded into the energy mix in both Europe and China. Globally, more than 130 GW of capacity has been installed – of which the US counts for less than 0.1%.

At the end of 2020, the Trump administration did, however, introduce a new support scheme for the offshore wind sector, with a brand-new investment tax credit for projects in federal waters. Through this, developers will be able to claim a tax credit of 30% for projects that enter construction before the end of 2025 for a period of ten years up to commissioning. This alone could result in a 16% reduction in the levelized cost of energy for some offshore wind projects in the US.