A new report commissioned by the Department of Energy (DOE) surveying offshore wind potential in the U.S. finds that establishing an offshore wind sector could drive more than $70 billion in annual investments by 2030. Citing that report, the DOE on Wednesday announced awards for seven offshore wind demonstration projects in Maine, New Jersey, Ohio, Oregon, Texas, and Virginia as part of efforts to launch a U.S. offshore wind industry and support offshore installations in state and federal waters for commercial deployment by 2017.
The awards on Wednesday are in addition to 42 2011 grants in support of the offshore wind industry. The 2011 funding was not given directly to offshore wind projects, as were the 2012 grants, but was instead targeted at projects that aim to either improve the technology used for offshore wind generation or remove the market barriers to offshore wind generation. Per the announcement on Wednesday, each of the seven offshore wind demonstration projects is to receive up to $4 million to complete the engineering, design, and permitting phase of the award. The DOE will select up to three of these projects for follow-on phases that focus on siting, construction and installation and aim to achieve commercial operation by 2017. The projects will receive up to $47 million each over four years, subject to congressional appropriations.
The report commissioned by the Energy Department’s Wind and Water Power Program and prepared by a Navigant Consulting–led consortium notes that no offshore wind projects operate—or are even in the construction phase—in the U.S., though nine projects (a total capacity of 3,380 MW) are in advanced development, having been awarded a lease, conducted baseline or geophysical studies, or obtained a power purchase agreement. Panels or task forces are in place in at least 13 states to engage stakeholders to identify constraints and sites for new offshore wind.
The absence of offshore wind in the U.S. contrasts with offshore wind installations of about 4 GW worldwide, nearly all of which (3 GW) is centered on northwestern Europe. An emerging Asian offshore market has also gained ground in recent years, with China adding 107.9 MW in 2011, bringing its cumulative installed capacity to more than 200 MW. Various forecasts have predicted between 55 GW and 75 GW of cumulative offshore wind capacity by 2020.
The report highlights challenges facing deployment of offshore wind technologies. "Offshore turbines are located further from human habitations and have significantly more challenging accessibility; as a result, newer offshore designs have enhanced turbine/nacelle access and area to perform more uptower repairs," it says. "Lower wind shear suggests that offshore turbines may not require towers as tall as might be preferred for land-based installations, despite a movement toward larger turbines." The report also concludes that technological advancements and cost reductions in offshore turbines will likely be derived from incremental improvements in the various subsystems throughout the turbines.
According to the DOE, last year, land-based wind power represented 32% of all new electric capacity additions in the U.S., accounting for $14 billion in new investment. Nearly 70% of the equipment installed at those U.S. wind farms—including wind turbines and components like towers, blades, gears, and generators—is now from domestic manufacturers, doubling from 35% in 2005.
The report and awards have been announced as lawmakers debate extension of a wind Production Tax Credit (PTC), which is set to expire at the end of this year. In Congress, where leaders are hoping to close the lame duck session of the 112th Congress by Dec. 24, a House bill that would extend the tax credit is pending. It has 119 co-sponsors, including 25 Republicans.
Sources: POWERnews, DOE
—Sonal Patel, Senior Writer (@POWERmagazine)