United States

United States

Question of the Week: Will US offshore wind prosper?

With projects such as Block Island and Cape Wind making progress towards becoming the first offshore wind developments in US waters, we asked what needs to happen to make the country a major player in the industry.

The Block Island project will feature the 6MW Alstom Haliade turbine
The Block Island project will feature the 6MW Alstom Haliade turbine

Question: What needs to happen for offshore wind to flourish in the US?

Joel Whitman, North America business manager, Tekmar

For the offshore wind market in the US to finally take off, three things need to happen.

The first projects to be installed must be a success. It is looking like 2015 will see the first offshore wind construction in the US. A successful build season will show Americans that this industry is for real.

The leasing of seabed in Federal waters must continue. Over the past 12 months we have seen leases of large development areas in Rhode Island, Maryland and Virginia. Next up will be the largest lease auction yet of up to 5GW of development area off Massachusetts. States like New York, New Jersey and North Carolina are also preparing development areas. The scale of this activity will create the necessary project volume.

Costs must come down: For long-term market viability, the US market needs to see development costs for offshore wind come down. The US market will directly benefit from the cost reduction efforts being undertaken in Europe.

Like many European companies, we see the American market as a logical place to expand our business. After a delayed start, we are pleased to see things now beginning to happen in the US.

Dan Renshaw - President, Sea Breeze Energy

For the US industry to progress, and the initially awarded offshore leases to be successfully developed, there needs to be sufficient investor and banking interest in providing much-needed capital. This will require a significant reduction in the levelised cost of capital making offshore competitive with other power-generating options.

Government support making offshore wind purchases either mandatory or more attractive to utilities is also needed. A link between seabed development rights and offtake would dramatically increase the interest in offshore lease auctions and allow development capital to flow more freely.

Offshore technological improvements are helping to reduce the cost of power today, but more work will be needed to bring the cost of offshore wind closer to competing technologies. Larger turbines and longer blade lengths allowing for more wind capture are increasing efficiency, but turbine installation costs remain high.

Unfortunately the US lacks the economies of scale and installation experience of Europe, so achieving cost reductions here will be difficult.

In addition to cost reduction, various levels of federal and state government support will be necessary to move the industry forward. This includes reauthorising the 30% investment tax credit for offshore wind, and specific offshore wind requirements within the renewable portfolio standard. The federal government's recent actions concerning carbon dioxide emission reductions will lead to further consideration of offshore wind as an alternative, but any effects are likely to be long term.

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