December also witnessed the by Royal Dutch Shell and EDF Renewables, making this joint venture (JV) team eligible to submit a proposal to the 1,100MW solicitation from the state’s Board of Public Utilities.
These are indications the US offshore wind is an energy sector with vast growth potential due to resource availability, lower costs, committed state policies and federal support.
It is also an indication of the strength of the companies looking to invest in the US offshore wind market.
When a market leader like Shell indicates its interest publicly, it shifts offshore wind from a peripheral to a major investment opportunity.
US offshore wind needs the US oil & gas (O&G) industry expertise to innovate and continue to drive down costs.
The European model and their practices will not work exactly the same way in the US. There are different constraints and obstacles, which US O&G expertise can help identify solutions and offer innovations.
Shell’s technical skill and knowledge working in the US Outer Continental Shelf provides depth, expertise and insights to construct, operate and decommission an offshore wind project within federal waters.
Its advantage lies in its strong relationships and partnership with the O&G supply chain, expertise with the US regulatory system and stakeholder engagement strategies.
That said, [] Equinor and Vineyard Wind bring a wealth of experience in the offshore wind industry from Europe.
The combined strength of these companies should result in US projects being built faster and more efficiently.
"A robust and predictable leasing schedule, the support of regional and local stakeholders and the commitment from Congress to provide the necessary resources, will unleash private sector investment"
In short, Shell’s entrance has moved offshore wind directly into the mainstream of the US energy industry.
However, beyond this recent activity and excitement remains the need for an extended project pipeline to avoid cyclical development periods.
Offshore wind developers have expressed concern that the BOEM does not have any new wind energy area lease auctions scheduled for 2019 — the next one is set for early 2020 in the New York Bight.
Industry and some Congressional leaders have suggested the bureau conducts regularly scheduled auctions, for instance at least four annually, to provide a predictable schedule of sales for developers and investors.
This would not only accelerate the development of new offshore wind projects, it would provide greater predictability in the marketplace, which in turn would reduce the cost of capital and ultimately reduce the cost of the electricity sold to the grid.
A robust and predictable leasing schedule, the support of regional and local stakeholders and the commitment from Congress to provide the necessary resources, will unleash private sector investment and entrepreneurship to truly make US offshore wind a global leader.
It was promising that 19 companies qualified for the Massachusetts wind energy area auctions and 11 participated.
However, only three teams won.
That leaves the other companies seeking to bring their expertise and interest to the offshore sector looking at other markets in which to invest.
There is a need to find creative yet equitable ways to bring more companies into the US market, especially from the oil and gas sector to drive down costs and build a robust supply chain.
These new leases and new developers will inject new possibilities and opportunities for small and medium-sized businesses from coast to coast. Let’s expand the market to make room for them, and keep the momentum going.
Liz Burdock is president and CEO of the Business Network for Offshore Wind
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