TODAY’S STUDY: OFF TO SEE THE WIZARD – U.S. OFFSHORE WIND'S PLAN AND HOW IT WILL GROW

Some things are both daunting and compelling. The challenges are obvious but the thing demands doing, nonetheless. In the face of such circumstances, a good plan is a good idea.

The builders of U.S. offshore wind now have a plan. It’s a good thing they do. In the face of the daunting circumstances the industry faces, they are going to need it.

But as the Tin Woodsman, the Scarecrow and the Cowardly Lion discovered outside the Wicked Witch’s castle, something more than planning and preparation are necessary.

There are precisely zero megawatts of U.S. offshore wind, despite enormous commitment by dedicated people to getting it built. Though would-be builders remain unswayed, only the long-suffering Cape Wind project and a few small undertakings offer any real possibility of coming to fruition in the near term. Why? Some recent interviews spelled out the challenges.

Offshore wind projects “are complicated to build,” Lawrence Berkeley National Lab wind authority Ryan Wiser explained. “They present technical challenges, cost challenges, permitting challenges, a whole variety of challenges” and “we have a ways to go to get those projects to the finish line.”

“The only thing onshore wind and offshore wind have in common is wind,” said Mark Leyland, who led early construction on the UK’s 30 turbine, 150-megawatt Ormonde Offshore Wind Farm and is now leading an effort to build wind off the Texas Gulf coast.

“It’s an expensive industry. You’re not talking millions, you’re talking billions,” said Jim Tolan, offshore wind engineering specialist and President of U.S. operations for Scotland-based SgurrEnergy, Cape Wind’s technical advisor. “It takes a lot of upfront money and it takes a lot of time.”

As detailed in the study highlighted below that outlines the new plan, the potential rewards are enticing. According to researchers at the U.S. Department of Energy’s National Renewable Energy Laboratory, their plan will support 10 gigawatts (GW) of deployed offshore wind generating capacity by 2020, at a cost of energy of $0.10 per kilowatt‐hour (kWh) and 54 GW of deployed offshore wind generating capacity by 2030, at a cost of energy of $0.07 per kWh.

Offshore wind offers a rich and ever-renewable power source immediately adjacent to the nation’s biggest cities, allowing for emissions-free electricity production and delivery without the use of sparse land or overburdened transmission.

It can be built beyond the concerns of NIMBYs without significant environmental or commercial intrusions.

It can revitalize local manufacturing and maritime economies, channel productive infrastructure investment and create high quality jobs across the employment spectrum.

And, in the long term, there can be a big payoff.

“For their first fifteen-to eighteen years, these projects are expensive,” Tolan said. But after that, he explained, “the cost of energy is going to be pretty good, unlike a coal plant that has to keep buying coal. It’s like an investment in a house after you pay off the mortgage.”

Still, a good plan is just the start. Standing outside the Wicked Witch’s castle where their beloved Dorothy was held prisoner and watching the Witch’s brutal guards drill, Tin Woodsman feels they must rescue her, Scarecrow proposes a plan and Cowardly Lion growls at the danger.

Like a mythological hero who faces danger with heart, brain and courage, they decide as one on action.

Cowardly Lion: All right, I'll go in there for Dorothy. Wicked Witch or no Wicked Witch, guards or no guards, I'll tear them apart. I may not come out alive, but I'm going in there. There's only one thing I want you fellows to do.

Tin Woodsman, Scarecrow: What's that?

Cowardly Lion: Talk me out of it!

Needless to say, rather than talk him out of it, they talk him into it. Compelled by their love for Dorothy, Cowardly Lion finds the courage, Tin Woodsman finds the heart, and Scarecrow finds the wit to undertake the rescue. And they prove tougher than all the rest of the Witch’s forces arrayed against them.

The offshore wind industry could be instrumental in rescuing this good earth from circumstances at least as dire as Dorothy’s. Like Cowardly Lion, Tin Woodsman and Scarecrow, they have come a long way and shown they are tougher than the rest. It is long past time for this nation to stop trying to talk them out of doing what they want to do and get with the plan.

A National Offshore Wind Strategy: Creating an Offshore Wind Energy Industry in the United States
February 7, 2011 (National Renewable Energy Laboratory)

Executive Summary

A National Offshore Wind Strategy: Creating an Offshore Wind Energy Industry in the United States was prepared by the U.S. Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy (EERE) Wind and Water Power Program to outline the actions it will pursue to support the development of a world‐class offshore wind industry in the United States. This National Offshore Wind Strategy will guide DOE as it expands its ongoing efforts through the Offshore Wind Innovation and Demonstration (OSWInD) initiative to promote and accelerate responsible commercial offshore wind development in the U.S. in both federal and state waters.

As the agency with primary jurisdiction over reviewing and approving offshore wind projects in federal waters, the Department of the Interior (DOI) is a crucial partner in implementing this National Offshore Wind Strategy and ensuring the creation of a robust and environmentally responsible offshore wind energy industry in the U.S. Over the past two years, DOI has developed a regulatory framework to review proposed offshore wind projects in federal waters and recently launched the Smart from the Start initiative to facilitate siting, leasing, and construction of new projects. This National Offshore Wind Strategy incorporates elements of that initiative and illustrates the commitment of DOE and DOI to work together to spur the rapid and responsible development of offshore wind energy.

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Key Points

• Offshore wind energy can help the nation reduce its greenhouse gas emissions, diversify its energy supply, provide cost‐competitive electricity to key coastal regions, and stimulate revitalization of key sectors of the economy by investing in infrastructure and creating skilled jobs.

• Key challenges to the development and deployment of offshore wind technology include the relatively high cost of energy, technical challenges surrounding installation and grid interconnection, and permitting challenges related to the lack of site data and lack of experience with permitting processes for projects in both federal and state waters.

• Since no wind turbines are installed in U.S. waters, there is a shortage of critical data on the environmental and siting effects of turbines and on the installation, operations, and maintenance of these turbines. This lack of data drives up the costs of financing offshore wind projects to the point where financing charges account for roughly half of the cost of offshore wind energy.

• This National Offshore Wind Strategy details the OSWInD initiative, which will guide the national effort to achieve a scenario of 54 gigawatts (GW) of deployed offshore wind generating capacity by 2030, at a cost of energy of $0.07 per kilowatt‐hour (kWh), with an interim scenario of 10 GW of capacity deployed by 2020, at a cost of energy of $0.10 / kWh.

• To achieve this scenario, the OSWInD initiative must accomplish two critical objectives: reduce the cost of offshore wind energy and reduce the timeline for deploying offshore wind energy.

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• The OSWInD initiative will address these critical objectives through a suite of three focus areas – Technology Development, Market Barrier Removal, and Advanced Technology Demonstration – encompassing seven major activities: innovative turbines, marine systems engineering, computational tools and test data, resource planning, siting and permitting, complementary infrastructure, and advanced technology demonstration projects.

• The OSWInD initiative will help reduce the cost of offshore wind energy through technology development to reduce capital costs; applied research to decrease installation, operations, and maintenance costs; turbine innovation to increase energy capture; and codes and standards development to reduce technical risks and financing costs.

• Working in partnership through the OSWInD initiative and the Smart from the Start initiative, DOE and DOI will help reduce the offshore wind deployment timeline in federal waters through resource planning, siting and permitting engagement, and complementary infrastructure support. The OSWInD initiative will include similar efforts in state waters, including the Great Lakes, with close collaborations between DOE and federal and state agencies with jurisdictional responsibility over those areas. Through implementation of a well coordinated siting strategy, offshore wind energy facilities and associated infrastructure can be deployed in a manner that reduces conflict with other ocean and Great Lakes uses and the management of protected resources and areas. This strategy will be implemented in a manner consistent with the polices and principles of the National Policy for the Stewardship of the Oceans, Our Coasts and Great Lakes (Executive Order # 13547) and its Framework for Coastal and Marine Spatial Planning.

• The OSWInD initiative will ultimately facilitate gigawatt‐scale offshore wind power deployment and will augment the more than $90M in funding allocated to offshore wind research and test facilities through the American Reinvestment and Recovery Act of 2009 (ARRA) and Department of Energy appropriated funds for Fiscal Year (FY) 2009 and FY 2010.

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Introduction

Offshore wind energy can help the nation reduce its greenhouse gas emissions, diversify its energy supply, provide cost‐competitive electricity to key coastal regions, and stimulate revitalization of key sectors of the economy. However, if the nation is to realize these benefits, key challenges to the development and deployment of offshore wind technology must be overcome, including the relatively high cost of energy, technical challenges surrounding installation and grid interconnection, and the permitting challenges governing deployment in both federal and state waters.
In Fiscal Year (FY) 2010, the U.S. Department of Energy instituted the Offshore Wind Innovation and Demonstration (OSWInD) initiative…The National Offshore Wind Strategy will guide DOE’s OSWInD initiative to support the development of a world‐class offshore wind industry in the United States able to achieve 54 GW of offshore wind deployment at a cost of energy of $0.07 / kWh by the year 2030, with an interim scenario of 10 GW at $0.10 / kWh by 2020.
To realize these scenarios, the OSWInD initiative has developed a strategy to achieve two critical objectives: reduce the cost of offshore wind energy and reduce the timeline for deploying offshore wind energy…

In FY 2011, the OSWInD initiative will expand its ongoing efforts into a suite of seven major activities, administered through three focus areas, targeted at the critical objectives of reducing the cost of offshore wind energy and reducing the timeline for deploying offshore wind systems. The three focus areas are Technology Development, Market Barrier Removal, and Advanced Technology Demonstration.

The seven major activities are innovative turbines, marine systems engineering, computational tools and test data, resource planning, siting and permitting, complementary infrastructure, and advanced technology demonstration projects…

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Rationale for a National Offshore Wind Program

Increasing the use of renewable energy for electricity generation is crucial to mitigate the risks of climate change and to shift the nation to a long‐term, low‐carbon economy. In his 2011 State of the Union Address, President Barack Obama called for 80% of the nation’s electricity to be generated from clean energy sources, including wind, by the year 2035 (White House 2011). In the North American Leaders’ Declaration of Climate Change and Clean Energy, the Obama Administration supported the global goal of reducing carbon dioxide (CO2) emissions by 50% by 2030 and 80% by 2050 (White House 2009). Because offshore wind power generates electricity without emitting CO2, gigawatt‐scale offshore wind deployment could contribute significantly to a national climate change mitigation strategy. Previously, a scenario analyzed in the EERE report 20% Wind Energy by 2030 found that the United States could generate 20% of its electricity from wind energy by 2030, with offshore wind providing 54 GW of capacity (Department of Energy 2008). This analysis clearly shows the potential for wind energy, and offshore wind in particular, to address the daunting challenge of reducing CO2 emissions in a rapid and cost‐effective manner.

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Resource Size

The energy‐generating potential of offshore wind is immense due to the lengthy U.S. coastline and the quality of the resource found there (offshore winds blow stronger and more uniformly than on land, resulting in greater potential generation). Offshore wind resource data for the Great Lakes, U.S. coastal waters, and the OCS indicate that for annual average wind speeds above 7 meters per second (m/s), the total gross resource of the United States is 4,150 GW, or approximately four times the generating capacity of the current U.S. electric power system (M. Schwartz 2010). Of this capacity, 1,070 GW are in water less than 30 meters (m) deep, 630 GW are in water between 30 m and 60 m deep, and 2,450 GW are in water deeper than 60 m (see Figure 2). More than 66% of the nation’s offshore wind resource is in wind class 6 or higher. The scale of this theoretical capacity implies that under reasonable economic scenarios, offshore wind can contribute to the nation’s energy mix at significant levels.

Currently, the majority of offshore wind projects are in the European Union (EU), where utility‐scale planning for offshore wind has at least a 10‐year history. Shallow water technology is proven in Europe, with 39 projects constructed and more than 2,000 MW of capacity installed, although this market is heavily subsidized. The EU and European Wind Energy Association (EWEA) have established aggressive targets to install 40 GW of offshore wind by 2020 and 150 GW by 2030. In the United States, roughly 5 GW of offshore wind capacity have been proposed in federal and state waters (W. Musial 2010).

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Benefits of Offshore Wind Deployment

On average, one gigawatt of installed offshore wind power capacity can generate 3.4 million megawatt‐hours (MWh) of electricity annually. Generating the same amount of electricity with fossil fuels would consume 1.7 million tons of coal or 27.6 billion cubic feet of natural gas and would emit 2.7 million tons of carbon dioxide equivalent (CO2e) annually (S. Dolan 2010). Because offshore winds generally blow more strongly and consistently than onshore winds, offshore wind turbines operate at higher capacity factors2 than wind turbines installed on land. In addition, daily offshore wind speed profiles tend to correspond well to periods of high electricity demand by coastal cities, such that the strongest winds (and thus highest potential energy generation) correspond to the periods of greatest electricity demand
(W. Musial 2010).

High electricity costs in coastal regions, more energetic wind regimes offshore, and close proximity of offshore wind resources to major electricity demand centers could allow offshore wind to compete relatively quickly with fossil fuel‐based electricity generation in many coastal areas. The 28 coastal and Great Lakes states in the continental United States use 78% of the nation’s electricity (Department of Energy 2008) while facing higher retail electricity rates than their inland neighbors...Mid‐Atlantic and Northeastern coastal states in particular face a dual problem: high electricity costs and dependence on high‐carbon, price‐volatile supplies of fossil fuel for generation. In states without substantial land‐based renewable resources, offshore wind deployment will be critical to meet their renewable energy standards or goals. In states with high electricity rates, offshore wind energy may quickly become cost‐competitive. Finally, the proximity of offshore wind resources to major electrical load centers minimizes the need to build new transmission capacity to serve those centers.

Deployment of wind energy along U.S. coasts would also trigger direct and indirect economic benefits. According to NREL analysis and extrapolation of European studies, offshore wind would create approximately 20.7 direct jobs per annual megawatt installed in U.S. waters (W. Musial 2010). Installing 54 GW of offshore wind capacity in U.S. waters would create more than 43,000 permanent operations and maintenance (O&M) jobs and would require more than 1.1 million job‐years to manufacture and install the turbines (W. Musial 2010). Many of these jobs would be located in economically depressed ports and shipyards, which could be revitalized as fabrication and staging areas for the manufacture, installation, and maintenance of offshore wind turbines…