In a period of challenge and uncertainty, the offshore wind industry globally has not only stood firm, but against all odds, surged in growth over the last two years. The U.S. offshore wind market was no different, particularly in 2021.
After years of lobbying by a number of dedicated key stakeholders, the U.S. Administration took a pivotal step to secure the future of the industry by committing to “double” offshore wind lease capacity in the United States by 2030 and deploy 30GW of offshore wind power by the same year. Congress subsequently enacted the Bipartisan Infrastructure Bill, which provides for significant government funding to support offshore wind and introduced a new long-term investment tax credit specifically for offshore wind facilities.
In September 2021, Vineyard Wind 1 achieved financial close after securing its final federal permits for the U.S.’ first commercial-scale offshore wind farm. News of the approval of South Fork wind farm came soon afterwards in November. In October, the Secretary of the Interior announced seven target areas for offshore wind leases on the east, west, and southern coasts of the lower 48, the first of which took place at the end of February 2022 and saw six new leases awarded in the New York Bight region.
Historically, the U.S. market has been driven by fixed bottom offshore wind on the Eastern Seaboard. However, we are seeing increasing momentum for floating offshore wind projects on the West Coast. This is reflected by California’s enactment of AB 525 in September 2021, which mandates that the California Energy Commission create a plan for offshore wind development in federal waters. In addition, both California and Oregon were listed as target lease areas in the Secretary of the Interior’s October 2021 announcement, with increasing activity from the Intergovernmental Renewable Energy Task Forces in these states in recent months.
Offshore wind as a power source was harnessed more than 30 years ago. Now, the offshore wind industry is set for dramatic global growth. As the industry matures in Europe and developers in Asia, North America, and Australia move to follow Europe’s example, legal and regulatory frameworks are evolving quickly to accelerate project deployment and integrate these resources into the legacy power market. The Global Wind Energy Council (GWEC) reported postponed and cancelled auctions in early 2020 due to COVID-19, with the sector bouncing back in the latter part of the year and into 2021. According to the latest numbers published by the World Forum for Offshore Wind (WFO), the global offshore wind market commissioned a staggering 15.7GW in 2021. This was strongly driven by China (12.7GW) and helped set
a new record for global offshore wind installations. The total cumulative installed capacity for offshore wind is now approaching 50GW worldwide, up 40% from the previous year.
Advances in technology and efficiencies in installation have contributed to huge reductions in the cost of offshore wind power, and this is expected to continue. In addition to the obvious green credentials, offshore wind power is now economically competitive. We are also seeing growth in a multi-level approach to offshore development with off- and on-grid storage being considered and the pairing of offshore wind with hydrogen production, all of which will support wider decarbonization of the power industry.
Kent, an industry leader in offshore wind design, consultancy and asset management, recently collaborated with K&L Gates, a leading international law firm; and Mainstream Renewable Power, a pure-play renewable energy developer, to develop an in-depth U.S. Offshore Wind Handbook (from which this extract is taken). The intent of the handbook is to review the current progress in the U.S. offshore wind market and to outline some of the challenges faced by this dynamic and expanding market.
Kent’s Andy Malpas, U.S. Offshore Wind Market Lead, who co-authored the Handbook and leads the Kent U.S. Offshore Wind Team from an office base in Boston stated that “the Handbook is designed to help guide investors and new market entrants through technical and regulatory issues in a fast-paced developing U.S. offshore wind market.”
To hear more from Kent plc, attend Global Offshore Wind 2022, taking place from 21- 22 June at Manchester Central. Passes start from just £59.00!