The US has more than 45 offshore wind projects in development, representing a $136 billion capital expenditure (Capex) and $4.4 billion annual operating expenses (Opex) opportunity by the early 2030s, according to a new forecast by Intelatus Global Partners, the research division of World Energy Reports.
A total of 17.5GW of project capacity has secured offtake commitments, and 16.5GW of new federal offshore leasing activity is underway in California, the north-east, mid and south Atlantic, according to Intelatus.
“What a difference a year makes,” said Philip Lewis, research director at Intelatus. “This time last year there was still some uncertainty around the federal offshore wind permitting process, the timing of offshore wind projects and certainty for the supply chain. At the beginning of 2022, the situation is more positive.”
He noted that the first piece of the jigsaw was the White House initiative released in March 2021 to catalyse offshore wind energy, strengthen the domestic supply chain, and create good-paying, union jobs. The programme included an offshore wind deployment target of 30GW by 2030 and an aspiration to achieve 110GW of offshore wind by 2050.
“The practical upshot is that developers and tier-one suppliers, most with European wind industry backgrounds, have the visibility of demand needed to make domestic US investments – including key component factories and port developments. This in turn will create employment opportunities for tens of thousands of workers,” he said.
The US’s first large-scale offshore wind project, 806MW Vineyard Wind 1 , has reached financial close, while a second project, 132MW South Fork Wind , had its environmental impact assessment approved last November and is expecting the federal government to complete final permitting soon. Additionally, 12 projects on the outer continental shelf are under final federal permitting review.
Federal agencies, led by the Bureau of Ocean Energy Management (BOEM), have shown a renewed impetus to progress offshore wind projects, and developers are moving fast with supply chain investments.
The department of the Interior has confirmed that BOEM will potentially hold up to seven new offshore lease sales by 2025. BOEM is expected to have approved construction and operations plans for 17.5GW of offshore capacity by the start of 2024, says Intelus.
The construction of Jones Act-compliant vessels is behind schedule, according to the report. The outdated Jones Act requires that only US-flagged and -crewed vessels move goods between US ports.
Developers will need to secure installation vessels from the international market — as Vineyard Wind 1 has done for its project. Vessel availability will be stretched around the middle of the decade – at the same time US offshore wind installation activity is expected to peak, said Intelus.
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