Challenges and Triumphs: The Resurgence of Offshore Wind Projects in the US
Following setbacks of high costs, environmental controversies, and project setbacks in 2023, the US offshore wind sector is showing signs of a promising revival.
The US offshore wind industry is showing signs of recovery after a tough year in 2023 filled with challenges like high costs, environmental accusations, and project cancellations.
Currently, there are twenty-four turbines operating off the East Coast, and this number is expected to more than double by the end of the year. Additionally, new projects are being announced, and states are committing to buying the clean energy produced by upcoming offshore wind farms.
Sam Huntington, director of S&P Global Commodity Insights’ North American power team, believes that there is currently a lot of momentum in the industry. According to him, the industry has moved past its lowest point.
Although offshore wind is now in a more stable position compared to last year, some analysts are hesitant to call it a boom. The industry is still in its early stages in the US and continues to face familiar challenges such as high interest rates and delays in receiving essential components like turbine blades, generators, and towers.
Former President Donald Trump, known for his strong dislike of wind power, is aiming to make a comeback to the White House in 2025. He criticized wind energy as being costly and labeled it as the most expensive form of energy during a rally in Wisconsin in April. Additionally, he referred to wind turbines as a "bird cemetery" at an event in December.
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Flames and smoke emerge from the Philadelphia Energy Solutions Refining Complex in Philadelphia, Friday, June 21, 2019.
Matt Rourke/AP
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Offshore wind is becoming more resilient to potential setbacks from a second Trump administration, as stated by a White House climate official, wind CEOs, and an industry analyst. The progress made so far is significant enough to withstand any attempts to reverse it.
However, White House national climate adviser Ali Zaidi emphasized the importance of having a supportive administration that is willing to help the industry continue to grow and thrive.
Zaidi explained to CNN that once steel is in the ground, it cannot be removed, making it irreversible. However, to transition from being a startup to achieving great success, more effort is needed. This will require collaboration between the federal government, state government, and the private sector.
Not meeting high aspirations
The Biden administration has set a goal to deploy 30 gigawatts of offshore wind energy by 2030. Zaidi is optimistic about reaching this target, but industry analysts have doubts about it.
"We’re not overly optimistic," Huntington mentioned. "Our latest prediction suggests they will only reach about half of that - 15 gigawatts. Unless a significant number of projects are given the green light, and Europe provides us with a large number of installation vessels, I don’t see how we can reach that goal."
Recently, the government has approved enough projects to eventually generate 10 gigawatts of power on the grid, which is sufficient to power almost 4 million homes. Additionally, the US Bureau of Ocean Energy Management is planning to conduct up to four lease sales this year, including areas in the Gulf of Maine and off the coast of Oregon. These locations are seen as potential sites for the large floating turbines that industry experts believe the world should be transitioning towards.
"This year is going to be a big year for offshore wind development," said BOEM director Elizabeth Klein in a statement to CNN. She emphasized that this progress shows that America's shift towards clean energy is not just a distant dream, but a reality happening in the present.
The first shipment of wind turbine parts for the Vineyard Wind farm travels through the New Bedford hurricane barrier in Massachusetts in 2023.
The first shipment of wind turbine parts for the Vineyard Wind farm travels through the New Bedford hurricane barrier in Massachusetts in 2023.
Matthew J. Lee/The Boston Globe/Getty Images/File
Approved projects will still take years to come online, according to Huntington and offshore wind CEOs. This timeline reflects the ongoing challenges that US projects are encountering. Obtaining permits for a single project can still be a lengthy process due to the various federal, state, and local requirements that developers must navigate.
Another obstacle is the procurement of equipment. The US supply chain for offshore wind is still in the process of being established. As a result, projects are currently relying on European manufacturers to supply blades, gearboxes, and other necessary components.
"There are only three suppliers currently providing wind turbines and high-capacity electric cables for the US market," according to Clint Plummer, the head of Rise Light & Power in New York and former employee at Ørsted, a Danish wind energy company. "Unfortunately, the lead times for these supplies keep getting longer."
Adding to the issue is the fact that the US wind industry is significantly less developed compared to Europe and Asia, resulting in American projects being placed at the bottom of the priority list.
"Plummer mentioned that due to the US being newer in the industry compared to other big markets, we have less influence in attracting manufacturers' attention."
"Additionally, we have friendly state and federal governments that support our industry growth."
Despite facing challenges, the most significant development in the past year has been the Northeast region's increasing involvement in harnessing electricity from wind farms.
The reason behind this shift is straightforward: New England and Northeastern states are keen on producing their own energy. Pedro Azagra Blázquez, the CEO of Avangrid, an offshore wind company working on projects in Massachusetts and New York, highlighted this motivation.
Blázquez told CNN that for many years, there has been no new power generation being built. He mentioned that Northeast governors are now focused on ensuring that their states have enough energy.
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New York has been actively working on offshore wind projects by reissuing bids for previously canceled projects and accepting them at higher prices. According to Huntington, this shows a positive outlook for the industry, despite the challenges faced. However, due to supply-chain limitations and high interest rates, electricity from wind may initially come at a higher cost.
Blázquez and Plummer commend the Biden administration for its ambitious offshore wind goal and efforts to streamline federal permitting. They are not overly concerned about the potential impact of a Trump administration on the industry.
Blázquez emphasized the importance of collaborating effectively with any administration. He highlighted the economic development and job opportunities that come with investing in offshore wind projects.
Editor's P/S:
The US offshore wind industry has shown promising signs of recovery after facing challenges in 2023. With the expansion of projects and commitments to clean energy, there is a sense of optimism within the industry. However, analysts remain cautious, recognizing that the industry is still in its early stages and faces ongoing hurdles, including high interest rates and supply chain issues.
Despite these challenges, the industry is exhibiting resilience in the face of potential setbacks, such as a potential return of the Trump administration, which has been critical of wind energy. Experts believe that the progress made so far is significant enough to withstand any attempts to reverse it. The Biden administration remains committed to its ambitious goal of deploying 30 gigawatts of offshore wind energy by 2030, and while analysts have expressed doubts about reaching this target, the government is taking steps to support the industry's growth. The approval of projects, planned lease sales, and efforts to establish a domestic supply chain indicate a strong commitment to developing the offshore wind industry in the United States.
