US offshore wind: tapping an underused resource | FT Energy Source
Wind power is the top source of renewable energy in the US, but nearly all this stems from onshore wind. The American offshore wind industry is underdeveloped and, with only two small offshore operations to date, it lags far behind Europe and China. The FT’s Derek Brower looks at why progress is slow, and what the White House is trying to do about it
Produced by Alpha Grid, presented by Derek Brower
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They say New Yorkers have plenty of bluster, which could explain why offshore wind is taking hold here. This waterside wasteland in Brooklyn is about to be transformed into one of the largest hubs for offshore wind in the US. Why Brooklyn? Why the South Brooklyn Marine Terminal? And what was it about this location that made you come here?
This area is 73 acres big. We are able to combine some things. We can have a station port where we can assembly the components for the turbine. We can also have the operational maintenance base, which will actually be in operations for like 25 years, plus. And then we're also going to have the onshore substation where we're actually going to get the cables in with electricity from offshore.
The Empire Wind and Beacon Wind offshore wind farms are going to be run as a joint venture between Norwegian state energy giant Equinor and BP. When fully operational this project is set to generate 3.3 gigawatts of electricity, supplying 2mn homes in and around the Big Apple, helping New York State to reach its goal of nine gigawatts from offshore wind by 2035.
So we have a very shallow ocean floor off the coast of New York City that allows us to use foundations that are used today in Europe. It also is the case that we have wind speeds off the coast of New York that are very strong. And, perhaps most importantly, we have the proximity of offshore wind in the Atlantic Ocean to New York City, Long Island, where we have the greatest demand for renewable electricity. Offshore wind provides that proposition by injecting renewables directly into those load centres.
Wind is the top renewable energy source in the US, accounting for 9.23 per cent of America's electrical energy in 2021. But the development of offshore wind here, defined as wind farms located in open water, usually the ocean, lags far behind Europe and China. The White House wants to change that. Last year, the Biden administration set a target of deploying 30 gigawatts of generation capacity from turbines operating in coastal waters by 2030.
It's a tall order. 30 gigawatts is enough to power about 10mn homes. The clean energy goal was given a further boost in August when the Biden administration passed the Inflation Reduction Act, which unlocked billions of dollars for clean energy in the US.
It is certainly a challenge to bring this industry to the US, but because we know that it can be installed and has been installed at that scale in other markets, it's a matter of translating it here. The biggest challenges are time. Goals that occur in 2030 and projects that take five or six years to be constructed means that we need to be moving quickly by advancing $369bn of tax credits, grants, and other incentives.
It helps a lot not just from a financial perspective. It's the consistency. It's the commitment to permitting efficiency.
Despite the political support from Washington, that permitting process for offshore wind is long and complex, requiring federal, state, and local sign-off.
The permitting is... I'm not calling it obstacle because I think it's very good. This is a new industry. We need to have a thorough process, and this is a complex project. But we need to get them going. We need to move them forward to able to start because we cannot start doing any construction before we actually have those permits in place.
Transforming locations, such as the South Brooklyn Marine Terminal, from this into something more like this will create an estimated 1,000 jobs during construction, with 200 anticipated throughout the 25-year operational life of Empire Wind and Beacon Wind.
Our workforce strategy is really focused on everything from exposing New Yorkers to the offshore wind industry to then training folks for opportunities, supporting them in entering jobs in the industry, and then supporting their retention.
There are numerous major offshore wind developments dotted around the East Coast, and Rhode Island is the construction hub for several of them. Danish multinational Orsted runs the projects here. The renewable energy firm's business case has been bolstered by recent concerns about energy security.
Ultimately, it's about energy independence. This is very important. We're seeing right now in Europe with political factors, with Russia's invasion of the Ukraine, that the ability of markets and of nations to achieve energy independence will ultimately be the protection that we need to make sure that we have affordable, reliable energy for years to come.
The Biden administration has been striving to make American supply chains more resilient in the face of geopolitical tensions and global pandemics.
There is simply no reason why the blades for wind turbines can't be built in Pittsburgh instead of Beijing. No reason.
Getting Orsted's new turbines up and running requires secure, predominantly domestic supply chains. In Quonset Point that domestic supply chain is already in action. A local shipbuilder is constructing the boats that will be the workhorses of the installations.
These crew transfer vessels take about 13 months to build from start to launch. We currently have about 120 people involved in these three vessels that we're building right now. Obviously, we need welders. We need ship fitters. We need machinists, riggers, lifters, and handlers - everyone to put this together - good engineers, a strong operational background to make this happen.
These jobs will last really for the lifespan of the vessel and for the lifespan of the wind park. These are long-term jobs. And for these three vessels here, we look forward to employing 30 to 35 new crew members.
But not everyone is a supportive of offshore wind. The power generated is dependent on the weather, and therefore, can be intermittent, while installing the power cables needed to transmit electricity back to land under the sea floor, is expensive. There's also concern about the turbines potential threat to wildlife, in particular, birds - a view memorably expressed by the former president.
I always say, the greatest graveyard in the world for birds-- just walk under a windmill. You will see more dead birds than you will ever imagine.
Researchers say that the risk of birds dying is negligible, but that could change.
Folks like me who can go out and study what's in a particular area and estimate what might be the impacts and where to better place or where to not place wind farms, we can do that for each site pretty accurately and reliably. The bigger unknown is OK, now, do that 10 times, 20 times, in different locations.
How does that impact cumulatively because the critters that I like to study are migratory birds that use, for many of them, the entire East Coast of North America. And so if you have wind farms now and they're migratory corridors, if you have it in their wintering areas, all of those places, then you might get some cumulative impacts. And we honestly don't know what those impacts are going to be.
Orsted's pioneering five turbine Block Island is one of just two offshore wind farms operating in US waters. But with rapid development under way on the East Coast, the West Coast is keen to get in on the clean energy action as well.
We're seeing lots of activity with new procurements happening right now across the East Coast. At the same time the Biden administration plans to hold lease auctions in the Gulf of Mexico and California, Gulf of Maine. And I believe there's going to be a sustained commitment to meeting decarbonisation goals through offshore wind. But leadership at the federal level is very, very important.
The challenge now is bridging the gap between talking up renewables and building out actual capacity in a short space of time if the US is to hit Joe Biden's goal of net-zero carbon emissions by 2030.