Visit windpowermonthlyevents.com for the latest on our upcoming conferences and webcasts

Comment - Europe shows way to critical cost savings

UNITED STATES: A new optimism exists today for offshore wind in North America.The push to make the market happen means offshore wind has shifted from solely a niche industry led effort to one increasingly backed by state and federal governments and their attendant politicians, regulators and other power brokers.

The welcome mat in the US runs along the populous eastern seaboard from Maine down to South Carolina. The area represents around a quarter of the nation’s electricity demand and most of the span is windy with a shallow underwater shelf offering thousands of potential sites.

The freshwater Great Lakes have also attracted attention—particularly in Ontario, Canada, where a premium purchase price is on offer.

In the US, various states have moved from bystander roles to active players, engaged in a race against other nearby states to support offshore wind and get projects built off their coasts.

The effort is not entirely selfless; all the involved states have a keen interest in landing the port business, supply chain, construction services, and other heavy infrastructure required to support an offshore wind build-out along the eastern seaboard.

The state likely to attract the most wind projects is the state likely to reap more of the associated infrastructure rewards as companies set up shop in proximity to the market.

Right now that state appears to be New Jersey. Utilities there are already required by state law to gradually increase the volume of green power in their portfolios, while lawmakers this summer added an offshore specific requirement that would support 1.1 GW of offshore wind.

The policy was signed into law in August and state regulators are shaping the law into a workable policy.

Momentum has picked up at the project level. Four offshore proposals now have a power purchase contract in North America.

This is not a guarantee that a project will be built, but it is a valuable asset that almost always precedes construction of onshore wind projects.

But offshore wind continues to face big hurdles in North America, with lengthy permitting the industry’s greatest concern.

Seven years is the average timeline expectation of the new offshore wind permitting regulation finalised by the federal US Department of the Interior. It includes two National Environmental Policy Act (NEPA) reviews, which are considered by most industries to be difficult and lengthy.

Banks say the second NEPA review does not include a data component and therefore should be removed, taking 18–24 months off the process.

By contrast, the offshore oil and gas industry regularly avoids any NEPA review for many of its drilling and extraction projects.

Both shallow and deepwater drilling rigs—including BP’s ill-fated Deepwater Horizon rig—have typically received waivers of NEPA review. That puts the demands on wind into perspective.

Perspective is also gained looking to Europe, the birthplace of offshore wind, where ten times more offshore wind capacity is built, being built or is in full scale development than in North America.

This special report includes some valuable insight into the challenges faced by offshore wind developers in Europe and some of the solutions. In the UK, government regulators and hopeful developers are busy identifying the environmental implications for 32 GW of projects that have been granted rights to areas of the British seabed.

Under way are large-scale bird surveys, geophysical surveys and archaeological surveys—with historically important shipwrecks an important consideration. Developers in North America not already busy with similar research will be doing so shortly.

Not all the lessons will be the same, but they can illuminate the path offshore in North America and offer critical cost saving lessons.

Offshore substations for Europe’s maritime power plant have all been individually designed constructions so far, but some say industry standardisation should be possible to bring down costs.

One unforeseen cost is being caused by the oil and gas industry’s seismic surveys interfering with those being carried out for wind projects; better coordination between the two industries could be a solution to that particular problem.

The Europeans are also busy coordinating offshore transmission efforts. North American developers with clusters of projects in relatively close proximity could do well to model potential transmission partnerships to bring down costs.

Our report on the changing values of offshore wind projects illuminates the reward in exchange for the cost and risk of taking a project through development.

A 50% equity share in one permitted 504 MW project increased more than 250% in value by the time it was sold to a utility on completion of all development work.

So far, the North American approach to developing offshore wind projects has been led by independent power producers and smaller developers while in Europe it has been mostly led by the utility sector.

But utilities in the US are likely to play a bigger role as more projects are fully developed.

Many utilities know that serving bulk renewables to the coastal load centres is a requirement in many states and that meeting the need with offshore wind is not a matter of if but when.

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Windpower Monthly Events

Search more than 4,500 companies in the Windpower Directory

Latest Jobs

[DAYS_LEFT] DAYS Subscribe Now

Left of your Windpower Monthly free trial

Your free trial Subscribe Now

to Windpower Monthly has expired