Despite its potential, the US offshore wind sector has lagged behind Europe and China, the world’s biggest markets. However, with Joe Biden fully behind offshore wind energy and pledging an all-of-government commitment to confronting the climate crisis, project developers are hopeful 2021 is the year the US offshore market comes into its own.
Over the past four years, the growth of the fledgling US offshore wind industry was stunted by the Trump administration. Donald Trump’s hostility towards wind power – he attempted to block an offshore project in view of his golf resort outside Aberdeen, Scotland – prevented the federal government from becoming a true partner in nurturing the offshore industry. Instead, deployment targets and gigawatt-scale procurements from New York, New Jersey, Massachusetts and other states have inched the US market forward.
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By GlobalDataIn Biden, states have a partner who appears ready to use the powers of the federal government to jump-start the industry. Before the election, Biden pledged to “unleash a clean energy revolution in America”, including the installation of “thousands of turbines off our coasts” in his first term. By the end of his first week in the job, Biden had begun to make good on that promise.
Biden signed an executive order on 27 January directing the secretary of the interior to “review siting and permitting processes on public lands and in offshore waters” to identify steps to achieve “the goal of doubling offshore wind by 2030”. “Today’s actions are going to help us increase renewable energy production from offshore wind and meet our obligation to be good stewards of our public lands,” he declared.
The US’s offshore wind generation potential is vast – around 7,200 terawatt-hours, nearly double the nation’s annual electricity consumption, estimates the National Renewable Energy Laboratory.
Industry welcomes Biden’s support
Industry representatives were happy to hear the president voice support for their sector.
“It has been refreshing and invigorating to see offshore wind being discussed in the Oval Office,” says Brandon Burke from the Business Network for Offshore Wind (BNOW), a Baltimore, Maryland-based non-profit organisation.
“We are excited about the administration’s keen interest in offshore wind,” says Laura Morton from the American Clean Power Association (ACP), a Washington, DC-based trade group whose members include offshore wind developers like Ørsted and Avangrid. “We see this as a once-in-a-lifetime opportunity to stand up offshore wind in the US. It is important for our members… to see some coordination at the highest level.”
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Industry remains unclear, however, as to what exactly Biden wants to achieve. The general consensus is that the goal to double offshore wind by 2030 refers to the estimated potential of areas already leased for offshore wind development in federal waters, not a literal doubling of the country’s installed offshore wind capacity. Installed capacity stands at 42MW and includes the only project built in federal waters, Ørsted and utility Dominion Energy’s 12MW Coastal Virginia Offshore Wind pilot project.
However, the 15 active commercial leases in the Atlantic Ocean could only support around 21GW of offshore wind generating capacity, according to the Bureau of Ocean Energy Management (BOEM), the federal offshore energy regulator. This, as Burke says, would fall short of the East Coast states’ targets of a total of 30GW by 2035.
Building regulatory capacity at the BOEM
Federal agencies will need additional resources for Biden to fulfil his offshore wind ambitions, say industry sources. Congress apparently agrees. Lawmakers approved a $5.1m budget increase for the BOEM office tasked with reviewing permits for offshore wind projects in a federal spending bill passed at the end of 2020. The rumour is that the BOEM is also planning to bring in outside consultants to beef up its offshore renewable energy team.
“The BOEM needs resources in terms of capacity and expertise,” BNOW’s Burke says. “The construction and operation plans they are reviewing are massive permitting documents. They require careful consideration.”
ACP members also welcomed the apparent move to expand the federal government’s capacity to review projects. “Additional funds and staff resources are needed,” says Morton. “There is no question, with the number of projects that are currently in the pipeline, the BOEM will be stretched thin to move those forward in an accelerated fashion.”
Additional resources are also needed at partner federal agencies, like the National Marine Fisheries Service, which provide consultation, scientific surveys and other research to assist the BOEM’s environmental reviews, she adds.
It has been refreshing and invigorating to see offshore wind being discussed in the Oval Office. Brandon Burke, BNOW
According to the BOEM’s fiscal year 2021 budget request, the agency expects to be processing as many as a dozen offshore wind project construction and operations plans by the end of the year.
“This is an opportunity for the BOEM to unleash a multi-billion-dollar wave of investment,” says Burke. “The construction and operations plans allow projects to move from the federal permitting process towards financial close.”
Biden seems to agree. He has appointed Amanda Lefton, who as New York’s first assistant secretary for energy and the environment helped develop the state’s nation-leading offshore wind policy, to lead the BOEM. Donald Trump never appointed a permanent BOEM director. “She has incredible experience in supporting New York’s leading efforts to embrace the economic and environmental benefits of offshore wind,” says Morton. “We are pleased she will bring that forward-looking vision to the bureau.”
Political direction to accelerate projects
Developers hope political leaders at key federal agencies will ensure a predictable project approval process. Attendees at a recent industry summit “agreed the most pressing issue curtailing industry confidence is the federal government’s uncertain leasing and permitting process,” says a BNOW statement. The White House will be expected to clear bureaucratic hurdles that have delayed offshore wind development on both coasts.
In Massachusetts, the 800MW Vineyard Wind I project is slated to be the first commercial-scale offshore wind farm in the US. However, the project, a joint venture between Avangrid Renewables and Copenhagen Infrastructure Partners, has been slowed by an extended environmental review and permitting delays.
In December 2020, Vineyard Wind asked the BOEM to withdraw its construction and operations plan so it could determine if upgrading to GE’s 13MW Haliade-X turbine required modifications to the plan. Trump’s BOEM responded by terminating the permitting process. After Biden took office, Vineyard Wind rescinded the withdrawal of its construction and operations plan, finding that the Haliade-X did not require any changes to it. In February, Lefton resumed the approval process, insisting “the BOEM is committed to conducting a robust and timely review of the proposed project”. Vineyard Wind expects to reach financial close on the project in the second half of 2021 and to deliver power to the grid in 2023.
In California, some of the most promising offshore wind development zones on the Central Coast overlap with areas used by the US Navy for flight training. Ongoing discussions between the Navy, state officials and lawmakers have yet to resolve the military use conflicts.
The new political leadership at the Pentagon, charged with implementing Biden’s ambitious climate agenda, could broker a compromise. Secretary of Defence Lloyd Austin has already pledged to make climate change a priority. “The department will immediately take appropriate policy actions to prioritise climate change considerations in our activities and risk assessments, to mitigate this driver of insecurity,” he said in January.
“Resolution of that is obviously critical to how offshore wind unfolds in California,” says Burke. “The truth is that California right now is behind other states, and behind other countries.”
Trade association Offshore Wind California has called for the state to establish a target of at least 10GW of offshore wind by 2040. On 11 February, state assembly member David Chiu introduced legislation that would do just that, with an added interim offshore wind target of 3GW by 2030.
The path forward
At federal level, change is already happening. In response to Biden’s executive order directing the Interior Department to accelerate renewable energy development on public lands and waters, the department said it would “immediately begin a review of processes and procedures” in its renewable energy programme.
An early opportunity to demonstrate the department’s follow-through are federal offshore wind lease auctions expected to occur over the next two years. The BOEM’s potential auctions in New York, California, the Gulf of Maine, and North and South Carolina could support 37,000MW of offshore wind energy, says a study from the research firm Wood Mackenzie. The BOEM could also launch a formal process to initiate offshore wind development in the Gulf of Mexico.
Joe Biden will also have support from Congress. Just before he took office, Congress extended federal offshore wind tax credits until the end of 2025 as part of an omnibus spending package. However, with Democrats now in control of the Senate, more sweeping legislation is possible. The Ocean-Based Climate Solutions Act, introduced by House Natural Resources Committee Chair Raúl Grijalva in October 2020, would direct the secretary of the interior to seek to permit at least 25GW of offshore wind capacity by 2030.
No one doubts the potential for the US to become a world-leading offshore wind energy producer. What was in doubt over the last four years was the federal government’s determination to make it happen. Biden’s early support for offshore wind suggests that era has come to an end.
