The turnaround of the US government’s energy policy under President Joe Biden is the foundation for a thriving US offshore wind industry as the federal government strives to speed up environmental assessments to make offshore wind a significant contribution to the new goals for clean energy. In the United States, offshore wind has not really taken off, with only two small offshore wind farms operating with less than 50 megawatts (MW) of combined power. In comparison, Europe has installed 113 offshore wind farms in 12 countries, with 25 gigawatts (GW) of the total offshore wind capacity.
The United States. smashes records in onshore wind, solar and storage installations, with records for each of these in 2020, according to the American Clean Power Association.
But offshore wind is lagging significantly, also due to lengthy environmental studies by federal agencies and the weighing up of the advantages and disadvantages of offshore wind installations in view of beaches or in commercial fishing areas.
Federal Policy Change
But now President Biden has offshore wind as a priority policy in one of his first executive actions to tackle the climate crisis. While halting new oil and natural gas leases on public land or offshore waters, President Biden ordered the Home Secretary to identify steps that could be taken to double the production of renewable energy from offshore wind by 2030.
Compared to current production, this is really a low bar, the Wall Street Journal says notes
But the radical shift in energy priorities could spur more projects, as a growing number of East Coast states, like New York, are setting ambitious clean energy targets.
States have established more than 29 GW of offshore wind procurement targets to date, while developers plan to bring 9.1 GW of offshore wind online by 2026 by developing 13 offshore wind projects, according to the American Clean Power Association.
The 800 MW Vineyard Wind project, 25 miles off the coast of Martha’s Vineyard, will become the first large-scale offshore wind farm in the United States and will provide power in 2023.
The Bureau of Ocean Energy Management (BOEM) said it did earlier this month resumes the environmental review of the Vineyard Wind project. The entire review was canceled by the Trump administration late last year following a request from Vineyard Wind developers to pause the process to see if the design needed tweaking after switching turbine suppliers.
“Offshore wind has the potential to help our country fight climate change, improve resilience through reliable power supplies and drive economic development to create well-paid jobs,” said BOEM director Amanda Lefton.
The developers of Vineyard Wind, a joint venture between Avangrid Renewables and Copenhagen Infrastructure Partners (CIP), said after the federal review process resumes:
“We look forward to working with the agency as we launch an industry that will create thousands of well-paying jobs while taking meaningful steps to reduce the impact of climate change.”
Smoother licensing processes could yield a $ 166 billion industry
With supportive policies and smoother leasing and licensing processes, offshore wind development could generate significant value for the US economy and create thousands of jobs, Wood Mackenzie said in a study commissioned by industry associations last year.
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Smoother processes for leasing and admitting offshore wind projects can make this easier up to $ 166 billion in offshore wind investment in the United States by 2035, the study said. The potential for the US offshore wind industry is enormous, according to industry associations, if the right policy is followed.
Wood Mackenzie expected that nearly 25 GW of offshore wind power will be added in the US by 2029.
“States have already selected 9 GW of capacity, which accounts for more than 70% of the forecast build through 2026. And in New England and New York, 80% of the wind built in this period will be offshore,” said WoodMac in a report. in June 2020.
“Offshore wind can be widely deployed, making it a powerful tool for policymakers to pursue more ambitious clean energy goals,” said Max Cohen, chief analyst at Wood Mackenzie.
In addition, the US offshore industry also offers opportunities for major European oil players, Cohen added.
Big oil bets big on US offshore wind
Some of Europe’s Big Oil, keen to demonstrate their low carbon energy commitments and expand their clean energy portfolio, have already moved to seize these opportunities.
BP took its first step into the offshore wind market in September with a strategic partnership US offshore wind assets with Equinor in a $ 1.1 billion deal.
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BP bought 50 percent in Equinor’s Empire Wind and Beacon Wind assets for Long Island and offshore Massachusetts, respectively, and the strategic partnership will develop up to 4.4 GW from those two offshore wind projects. The two super majors will also jointly look for other US offshore wind opportunities.
Equinor and his partner BP were selected for the last month biggest award ever in the US for offshore wind to date to provide the state of New York with offshore wind power from the first and second phases of Empire Wind and Beacon Wind for a total of 3.3 GW of power for the state.
“The US East Coast is one of the most attractive offshore wind growth markets in the world,” said Equinor CEO Anders Opedal.
With supportive policies at the state and federal levels, US offshore wind could become an even more attractive growth market.
By Tsvetana Paraskova for Oilprice.com
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