2020 U.S. Offshore Wind Market Report & Insights Released
As the U.S. offshore wind energy industry takes precautions to keep business moving amid the coronavirus outbreak, its annual market report describes how the White House can act now to claim the U.S. share of an emerging $1 trillion global market by 2040 to assist in the economic recovery.
“The health and safety of wind industry workers is paramount. We are concerned about the economic hardship that a long-term shutdown and recession would place on secondary and tertiary U.S. suppliers,” said Liz Burdock, CEO of the Business Network for Offshore Wind, in releasing the 2020 U.S. Offshore Wind Market Report & Insights. “Offshore wind energy is an unparalleled business opportunity right now. Investment in these vital infrastructure projects can ensure the pipeline to small business suppliers stays open.”
“If the Federal Government wants to boost the economy, it doesn’t have to look any further than the Department of Interior,” added Burdock. “Congress should act today to devote the resources needed for review of construction and operation plans (COPs) as requested in the Administration’s 2021 budget. U.S. small businesses will need work immediately following the containment of the coronavirus, and next year may be too late to keep them solvent.”
The Business Network publishes this report annually for its members on the state of the U.S. market. It includes state-by-state capacity procurements, increases in government targets, project timelines, and the latest industry developments. The Business Network also sponsors the International Partnering Forum (IPF), the largest offshore wind event in the Western Hemisphere; this year, IPF Virtual will be held online April 21-22, and the in-person IPF Together conference has been scheduled for August 18-21, 2020 in Providence, Rhode Island.
Credentialed news media may obtain a copy of the proprietary 2020 U.S. Offshore Wind Market Report & Insights report to quote from (but not repost). Among its insights:
- Power prices are consistently falling in the American offshore wind industry, paralleling the European experience. For example, the Empire Wind and Sunrise Wind developments off New York had an average all-in price of $83.36 per megawatt-hour when awarded in 2019, with an expected average OREC cost of $25.14. Those prices were 40 percent less than those projected in 2018.
- Close to 10 gigawatts of offshore wind power capacity are in the development phase and projected to go into operation in the U.S. by 2028.
- 94 contracts have already been given in the past few years in the U.S. offshore industry. They are listed in the report, along with forecasts of over 60 ocean vessels soon to be required for crew transfer and service operations.
- A different business model is emerging. Dominion Energy is not using the European model of a third-party developer, but an American model of an experienced U.S. utility with extensive regulatory experience, now pursuing a massive project off Virginia.
- Offshore wind will move into Federal waters this year, with Dominion’s 12-megawatt, two-turbine Coastal Virginia Offshore Wind pilot project, which will provide the local supply chain with experience and build intergovernmental understanding and cooperation.
- Grid operators must address onshore electric transmission bottlenecks – such as with open-access shared high-voltage lines and grid interconnections – or the U.S. could lose further billions of dollars of investment by the offshore supply chain if it is unable to build new capacity beyond 10 gigawatts.
Burdock said the recent drop in oil prices won’t diminish demand for offshore wind. “Petroleum is key in the transportation industry, but offshore wind is focused on electricity,” she said. “There also is a growing demand for offshore wind energy because of its carbon reductions and the fact it will never run out, as well as the economic development benefits. States still have renewable energy targets to meet, and that shift in attitudes isn’t changing.”
Members of the Business Network for Offshore Wind may access 2020 U.S. Offshore Wind Market Report & Insights at this link. Not a member? Join today and get access to industry reports, webinars, exclusive events, and more.