US
US projects approach ‘steel in water’ moment
Two long anticipated offshore wind projects in the US are finally at the stage where developers will soon have ‘steel in the water’ and others look set to follow
THE US offshore wind industry is transitioning from early development to demonstration of commercial viability. While there are no commercial-scale projects in operation or in the construction phase, there are 11 projects in advanced development, that is, having either been awarded a lease, conducted baseline for geophysical studies, or obtained a power purchase agreement (PPA), and there are panels or task forces in place in at least 13 states to engage stakeholders to identify constraints and sites for offshore wind. US policy makers are also beginning to follow the examples in Europe that have proven successful in stimulating offshore wind technological advancement, project deployment, and job creation. As the latest edition of consultant Navigant’s Offshore Wind Market and Economic Analysis Annual Market Assessment, which was prepared for the US Department of Energy (DOE) makes clear, since the last edition of the report, several potential US offshore wind projects have achieved notable advancements in their development processes. In addition to two Bureau of Ocean Energy Management (BOEM) commercial lease auctions for federal Wind Energy Areas (WEAs), other later-stage commercial-scale projects have made incremental progress toward starting construction. The 11 projects highlighted above, representing 3,824 megawatts (MW), now lie in advanced stages of development.
On the demonstration-project front, the University of Maine, in partnership with the DOE installed the first offshore wind turbine in the US, a 1/8-scale pilot turbine on a floating foundation. In addition, the DOE has awarded a number of advanced technology demonstration (ATD) project grants, which are intended to help address ongoing challenges and cost barriers to offshore wind energy.
Although more projects are at an advanced stage, Navigant notes that US offshore wind development faces significant challenges. These include the cost competitiveness of offshore wind energy; a lack of infrastructure such as offshore transmission and purpose-built ports and vessels; and uncertain and lengthy regulatory processes. Various US states and federal government have used a variety of policies to address each of these barriers with varying success. “For the US to maximize offshore wind development, the most critical need continues to be stimulation of demand through addressing cost competitiveness,” said Navigant. In 2013, this critical need was partially addressed through an extension of the US renewable electricity production tax credit (PTC), the business energy investment tax credit (ITC), and the 50 per cent first-year bonus depreciation allowance. In addition, the US DOE announced seven more projects that will receive up to US$4 million each to complete engineering and planning as the first phase of the offshore wind ATD programme. At state level, the Maryland Offshore Wind Energy Act of 2013 established offshore wind renewable energy credits for up to 200MW, requiring consideration of peak load price suppression and limiting rate impacts. “Increased infrastructure is necessary to allow demand to be filled,” said Navigant. “Examples of transmission policies that can be implemented in the short term with relatively little effort are to designate offshore wind energy resources zones for targeted offshore grid investments, establish cost allocation and recovery mechanisms for transmission interconnections, and promote utilization of existing transmission capacity reservations to integrate offshore wind.” In 2013, there were few tangible milestones in this area, although long-term plans
Construction of offshore wind projects in US waters seems – at last – to be getting under way
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