Creating an Offshore Wind Industry

Excellent follow up to our wind special we broadcast late last year.  We will be focused on this again early this year on the radio side.

Creating an Offshore Wind Industry

December 7, 2015

Vince Font

As the United States starts to build its first offshore wind farm, what policy and technology initiatives will be necessary to create a fully functioning offshore wind industry?

The London Array is the world’s largest offshore wind farm. Credit: London Array Limited.
It is an auspicious time for the U.S. offshore wind industry. Driven by the fact that a present count of offshore wind farms in the United States amounts to nil, there is a great push underway to leverage one of the country’s most abundant and untapped natural resources for the production of clean energy. A wave of recent conferences, including a White House summit on the matter, have served to spark serious discussion on what remains to be done to create a robust U.S. offshore wind industry.

The Block Island Factor

At center stage is the Block Island Wind Farm, a 30 MW installation currently under construction in the waters some 15 miles off the southern coast of Rhode Island. If all goes according to plan, Block Island will begin commercial operations in 2016, becoming the first operational offshore wind farm in the United States. Small though it may be, Block Island represents a crucial first step that has served to invigorate the proponents of offshore wind development following a decade of stagnation.

The 630-MW London Array in UK waters. Credit: London Array Limited.
Deepwater Wind CEO Jeffrey Grybowski, whose company is spearheading the project’s development, said he believes Block Island is “just the start of something much bigger,” and added he is “more optimistic now than ever” that offshore wind will take hold as a transformative means of shaping the future of the U.S. renewable energy mix, while also revitalizing the local economies that will benefit from these installations.

In Lessons From U.S. Offshore Wind Projects to Date, Keith Martin of Chadbourne & Parke said Block Island serves as an example of the importance of scale when tackling early offshore wind efforts. “Block Island demonstrates it may be better to make the first project a small project as proof of concept before moving to a larger scale,” Martin wrote. He added that that the significantly higher number of financially responsible parties involved in large-scale projects could “increase the difficulty of holding everything together.”

Late Starts and Missed Opportunities

Although the U.S. appears poised to take concrete steps in the direction of offshore wind energy, many share the opinion it should have been much further along by now. In a paper titled The Time Has Come for Offshore Wind Power in the United States, professors from the University of Delaware (UD) suggest the U.S. offshore wind industry may actually be worse off today than it was 10 years ago following the passage of the Energy Policy Act of 2005.

Jeremy Firestone, School of Marine Science and Policy professor and lead author of the UD paper, called the embryonic state of the offshore wind industry in America “disheartening” and said the past decade was an era of “missed opportunity.”

Lillgrund Wind Farm is located about 10 km off the coast of southern Sweden. Credit: Mariusz Pazdziora.
Compared to Europe, the U.S. has far to go. There are now over 10 GW of installed offshore wind capacity throughout 11 European nations, with another 26.4 GW of projects already consented and 98 GW of offshore wind farms in the planning. In the UK alone, there are 1,452 offshore wind turbines accounting for 5.1 GW of capacity. The UK is also home to the world’s largest offshore wind farm, London Array, which alone has a capacity of 630 MW.

Aerial view of Block Island off the coast of Rhode Island, where the first U.S. wind farm is under construction. Credit: Wikipedia.
Adding perspective, Grybowski drew comparisons to the early days of the European offshore wind market and where the U.S. is today. “What we’re going through in the U.S. is not really surprising, because the same thing happened in Europe,” Grybowski said at a recent briefing held by the Environmental and Energy Study Institute (EESI). “It took a long time for the industry to take off in Europe, and then it exploded.”

The result of nearly a quarter century of continued deployment and investment, the European offshore wind industry saw exponential growth in the decade between 2004 and 2014, adding almost 7.5 GW of capacity. Current in-construction projects in Europe will bring cumulative capacity to 10.9 GW by 2016.

Bruce Bailey, CEO of AWS Truepower, said much of that success is owed to broad support of renewable energy initiatives among policymakers and the public. “There has always been a greater appetite in European for renewable energy,” Bailey said, pointing also to the fact that European offshore wind has enjoyed a greater than 20-year jump on the U.S.

Offshore Wind Stalling in China

The U.S isn’t the only world superpower having trouble launching an offshore wind industry. Things are rocky in China, too, where a recent report states the country has fallen behind by three years on its bid to develop 5 GW of offshore wind capacity.
Shi Pengfei, honorary chairman of the Chinese W
ind Energy Association, cited high risk and cost as the main reasons behind China’s failure to achieve its goal — although the country does have a modest number of operational offshore wind farms at just under 660 MW.

In response, the National Energy Administration in China has issued directives to get the industry back on track, which involve coordination between various agencies to put supporting policies and technologies into place.

Leveraging the European Model

In the UD paper, Firestone and associates identified a combination of “political will, price and policy support, and spatial planning” as the driving forces that propelled the European offshore wind industry to great success – leading to the natural presumption that Europe could serve as a model from which all other lagging nations, including the U.S. and China, might learn a great deal.

European technology and experience in the arena may also serve as the catalyst to jumpstarting the fledgling U.S. industry. Grybowski said that continued development of offshore wind projects in the U.S. will rely heavily at first on the importation of the existing European supply chain. He said this will gradually lead to the creation of an established stateside infrastructure capable of operating on its own.

The Sprogø Vindmølle Wind Park in the Baltic Sea. Credit: Fxp42.
Paul Rich, director of project development for US Wind, said at the EESI briefing that leveraging European technology will enable offshore wind developers to “finally begin to establish an industry, a source of workforce development, and centers of excellence” in the United States.

Proposed Solutions

According to Firestone, one of the key stumbling blocks that has handicapped offshore wind efforts is the perception that development should follow the path laid by offshore oil endeavors. Emphasizing the great differences that exist between the two industries – including the fact that oil can be shipped across vast distances and sold, whereas offshore wind power generation relies on an established local grid – Firestone said comparing the two is “like trying to put a square peg in a round hole.”

Firestone and associates propose a number of solutions that will serve to pave the way forward. These include the establishment of a long-term tax credit that takes into consideration offshore wind’s “long planning horizon”; greater emphasis on loan guarantees that put developers on more solid footing; and focus on interstate collaboration, rather than policy they caution may end up “reinforcing competition among states when cooperation is needed.”

Likewise, Bailey emphasized the critical need for the installation of an investment tax credit, stating, “If nuclear power receives tax incentives, so should offshore wind.”

What Lies Ahead

Beyond Block Island, a handful of initiatives loom encouragingly. Neighboring state Maryland is in the process of performing survey work and pursuing financial incentives for offshore wind. Meanwhile, US Wind has begun the planning stages of a proposed 500 MW project to be located just off the coast of Ocean City, Maryland.

Further up the food chain, the Bureau of Ocean Energy Management (BOEM) plans to auction some 350,000 acres of sea off the coast of New Jersey in November. The BOEM also teamed with the Department of the Interior for an environmental assessment and discussion of offshore wind development in North Carolina.

At the recent Summit on Offshore Wind, the White House announced the establishment of an Interagency Work Group whose purpose will be to aid in the coordination of efforts between federal agencies devoted to offshore wind development. Additional commitments announced include the creation of a multi-state project funded by the Department of Energy to develop a roadmap for large-scale deployment, and the establishment of an international forum to exchange best practices between nations.

Taking all of this into account, it would be easy to declare that growth of the U.S. offshore wind industry is imminent. However, it’s not a foregone conclusion. Whether the industry takes off in the U.S., and how fast growth will occur when those steps are taken, remains to be seen.
“The technology is there,” Bailey said. “But it’s the establishment of long-term policy that will have the greatest influence on how quickly the offshore wind industry develops in the United States.”