The US offshore wind sector prepares for take-off

Following a change of Administration and renewed ambitions to harness the potential of renewables in the US energy mix, the country’s offshore wind sector is brimming with anticipation. According to estimates by BVG Associates, a UK-based renewable energy consultancy, offshore wind capacity in the US is estimated at just 30MW, compared to more than 22GW in Europe.

“There are a wider range of opportunities on both the Atlantic and Pacific seaboards,” said Rafael Riva, who is closely involved in LR’s offshore wind activities in the US. “With lots of focus on cheap energy from shale deposits, energy companies had left wind power until later. But now we get the sense that widescale development has already started.”

US offshore wind power today is generated at just one facility – the Block Island Wind Farm – developed by Deepwater Wind, now Ørsted US Offshore Wind. The five-turbine site is three miles off the coast of Block Island, just south of Rhode Island.

Huge opportunities …

However, although the strength of the wind hasn’t caught much US attention so far, Riva highlighted BVG estimates that today’s 30MW could soar to 33GW by 2030, an astonishing capacity increase by a factor of more than a thousand. Even two-thirds of that increase, if the figure turns out on the high side, would create huge opportunities for wind infrastructure participants, including turbine and fabrication technologists, and installation specialists, he said.

Meanwhile, in the longer term, the numbers are even more dramatic. With the proviso that stable policies remain in place, the US Department of Energy has forecast that offshore wind could generate as much as 86GW by the middle of the century – almost 2,900 times more than today.

To be fair, some clearly had realised the sector’s potential. When the US Bureau of Ocean Energy Management ran the last auction for Massachusetts offshore wind blocks in 2018, the event exceeded all expectations, raising more than $405m from just three offshore blocks.

Exceeding expectations

Each block sold for about $135m, over three times more than the average $42m for similar blocks raised two years earlier. Norway’s Equinor bought one, Mayflower Wind, a joint venture between Shell, EDP Renewables and Engie acquired a second, and a bid by Vineyard Wind LLC, a joint venture between Copenhagen Infrastructure partners and Spanish renewable energy company, Iberdrola, won the third.

Riva explains that most of the country’s offshore wind potential so far lies in two regions – off the north east coast, Massachusetts in particular, mostly in shallow water, and off the west coast, where the continental shelf plunges rapidly into the deep waters of the Pacific. Therefore, he says, east coast wind development will focus mostly on fixed installations, while those on the west coast are more likely to require floating installations.

He points out that LR is well-placed to provide a range of services, including Certified Verification Agency (CVA), Investment Efficiency (IE) appraisal, and ITC Verification. “The Shells, BPs, and Equinors of this world know us well from our work with them in Europe. We’ve worked with a number of the wind power pioneers for many years and have a wealth of experience in the sector. And the verification functions in wind are similar to those in oil and gas.”

In addition to Riva’s hard work, Jay Borkland, an offshore wind specialist part of LR’s US Renewables Team, is leading the charge on developing advisory services in the US, focusing on ports, infrastructure and supply chain opportunities. Due to the scale and pace of development, LR has partnered with leading advisory firms such as, BVGA, Jacobs and Timmons Engineering. Much like developers who are forming Joint Ventures to manage risk and finance projects, such as EDPR & Engie forming Ocean Winds, Equinor & BP partnering in New York, and Macquarie & Iberdrola, for a professional services firm like LR, partnering is an innovative business model that is expected to grow significantly over the next five years.

Jones Act constraints

One new challenge to offshore wind is Jones Act compliance, or to give its formal title – The Merchant Marine Act of 1920 – will apply to certain aspects of offshore wind development. US-built ships, flagged in the US, and manned by US nationals will be required for the installation of wind power plant, and also for the supply and service of facilities.

It will apply to vessels that transport components “between points in the United States”. Under the 1953 Outer Continental Shelf Lands Act, any man-made structure fixed either temporarily or permanently to the seabed, is defined as a “point” on the outer continental shelf, which generally extends 200 miles from the coast.

Riva noted that, so far, there are no US-built wind turbine installation vessels and, if the sector takes off as expected, there will be a pressing requirement for such vessels. This could present opportunities for European companies seeking a foothold in the US offshore wind sector through the establishment of joint ventures, LR has already solidified a Joint Industry Project with a US Engineering firm for the development of a Jones Act compliant wind turbine installation vessel (WTIV) design, he said.