The U.S. offshore wind energy industry is taking the necessary next steps in its evolution: It has favorable state and local policy, legislative champions and experienced wind farm developers willing to forge ahead and build 21 gigawatts of electric power capacity currently available through 16 federal offshore leases running from Massachusetts to North Carolina.
Yet, despite these pillars, the offshore wind industry remains very much a work in progress. When New York Gov. Andrew Cuomo increased the U.S. offshore wind market by 62% in January, industry opportunities and challenges quickly became very clear.
With several large-scale commercial offshore wind projects expected to be in operation by 2025, the U.S. offshore wind industry faces multiple issues including the following:
Permit uncertainty. Despite policy announcements, goals and commitments, uncertainty within the supply chain still exists. State and federal permitting requirements and challenges can create project delays and add a layer of uncertainty for the supply chain considering investments.
Resource limitations. It is unclear if the U.S. has enough supplier resources to build the pipeline and locate specialist workers needed to compete in the global market. Ports also are limited in their infrastructure capabilities. U.S. projects are competing against Asia and Europe and other emerging markets for resources like subsea cables and specialized vessels.
State competition. State competition is helping to accelerate the market. However, more state coordination and cooperation is needed. Companies cannot build factories in every state. U.S. states need to work together regionally to establish an East Coast supply chain and a network of ports that will help the industry grow collaboratively.
Grid capacity. The industry needs to work closely with state and local utilities to ensure that the power grid will be prepared to handle the 21 gigawatts of power coming in from the Atlantic Ocean over the next decade. Fortunately, some offshore wind project developers have formed partnerships with utilities, but we need more cooperation, planning and investment in this area to make the transition to a clean energy grid.
Cost reduction. It is very important to keep energy costs down for consumers, but a focus purely on cost reduction – before the industry has even gotten off the ground – could discourage businesses from entering into the market. Prices reductions in Europe relied heavily on the supply chain, but their supply chain was mature. The U.S. supply chain is in its infancy. Import tariffs and quotas – and the phase out of the federal Investment Tax Credit – only add complexity to the cost issue.
To take on these challenges, the Business Network for Offshore Wind hosted a Leadership 100 event of industry experts in January, where they developed a work plan that includes an industry road map as a framework for national, industrywide cooperation and planning. Each of these challenges will also be center stage at the 2019 International Offshore Wind Partnering Forum in New York City April 8-10, and they will be part of the national debate this year on energy infrastructure between fossil fuels and clean energy sources.
It is important now that we have gotten what we asked for — a U.S. offshore wind market — to collectively roll up our sleeves and get to work and deliver on our promises. Not as an individual, a government agency, or a company, but as an integrated industry to produce clean, affordable energy, as well as new jobs for Americans. Our country and our planet are counting on us to get this right.
Liz Burdock is CEO and president of the Business Network for Offshore Wind.