TODAY’S STUDY: Global Offshore Wind Update
2017 Offshore Wind Technologies Market Update
August 2018 (U.S. Departmemt of Energy)
U.S. Offshore Wind Projects Advance in Development While Total Project Pipeline Remains Relatively Constant
The U.S. offshore wind market continues to evolve as state-level offshore wind deployment targets and procurement policies are introduced, projects advance in permitting and offtake processes, supply chain constraints are mitigated, and research and development (R&D) investments are made. Including the 30 megawatts (MW) of installed capacity, the United States now has a project pipeline of 25,464 MW of offshore wind…Potential capacity includes installed projects, projects under construction, projects moving through permitting and offtake processes, projects with site control, the Bureau of Ocean Energy Management’s unleased wind energy areas, and unsolicited lease applications submitted by developers. See Section 3 for a detailed discussion.
• Developers have announced that roughly 2,000 MW of new offshore wind capacity is expected to be operational by 2023.
• The U.S. pipeline continues to be led by projects along the U.S. Eastern Seaboard, of which a number have made steps toward a more advanced stage of development during 2017 and the first half of 2018.
Continued State Activity in U.S. Offshore Wind Development
Dedicated state-level procurement and offtake mechanisms support U.S. offshore wind development: • New Jersey increased the state’s 2030 offshore wind commitment from 1,100 MW to 3,500 MW, initiated new legislation to restart the review process for Fishermen’s Energy Atlantic City project, and directed the Board of Public Utilities to implement the state’s offshore renewable energy credits (ORECs) (New Jersey State Legislature 2018a).
• Massachusetts’ Energy Diversity Act (2016) mandated the procurement of 1,600 MW of offshore wind via competitive solicitations by 2027. The first round of solicitations was completed on May 23, 2018, with Vineyard Winds’ 800-MW proposal selected as the winner. The next solicitation is expected to be held before 2020 (General Court of the Commonwealth of Massachusetts 2016).
• As part of the Massachusetts solicitation, Rhode Island was able to evaluate offshore wind project proposals. Rhode Island selected Deepwater Wind’s 400-MW Revolution Wind proposal to support the state’s goal of adding 1,000 MW of renewables by 2020 (Office of the Governor 2018).
• In February 2018, Connecticut issued a request for proposal (RFP) for 825,000 megawatt-hours (MWh) per year of renewable energy from offshore wind. Connecticut’s Department of Energy and Environmental Protection selected Deepwater Wind’s 200-MW Revolution Wind proposal. The project will be incremental to Deepwater’s 400-MW Revolution Wind proposal approved by Rhode Island (Connecticut Department of Energy & Environmental Protection 2018).
• New York’s clean energy standard requires 50% renewable energy by 2030, and Governor Cuomo has identified a 2,400-MW offshore wind target to help achieve that goal (New York State 2017).
• Maryland has a 2.5% offshore wind renewables portfolio standard (RPS) carve out supported by offshore ORECs (House Bill 226 2013).
Proposed Additions of New Wind Energy Areas (WEAs) in the Atlantic Are Underway
Until March 2017, the Bureau of Ocean Energy Management (BOEM) competitive auctions have granted site control to developers in 13 lease areas with roughly 17 gigawatts (GW) of potential capacity (BOEM 2018a).
• In response to state requests, BOEM has identified four new call areas in the New York Bight off the south coast of Long Island (BOEM 2018b).
• As part of BOEM’s Renewable Energy Path Forward on the Atlantic, the organization is conducting a high-level evaluation of all areas on the Atlantic Coast for offshore wind development (BOEM 2018a).
• The U.S. Department of the Interior plans to auction the two unleased portions of the Massachusetts WEA (BOEM 2018c).
• The U.S. Department of the Interior’s Royalty Policy Committee recommended BOEM should develop 20 GW of offshore wind by issuing 2 GW of new leases annually, starting in 2024, to ensure the development of a robust domestic supply chain (U.S. Department of the Interior 2018).
Offshore Wind Industry Developers Are Working With the U.S. Department of Defense (DOD), BOEM, and the States of California and Hawaii to Resolve Potential Project Siting Obstacles
• In California, DOD has indicated that offshore wind turbines may interfere with ocean-facing radar arrays and offshore training areas (U.S. Department of the Navy 2018). These issues may impact the development of potential lease sites currently under consideration in central California, including Morro Bay. Offshore wind developers have announced they will continue to work with DOD officials to minimize the impact of offshore wind development (Nikolewski 2018).
• Some developers are also considering potential projects in northern California, including Humboldt Bay, that are not anticipated to interfere with military training areas or radar (Redwood Coast Energy Authority [RCEA] 2018).
U.S. Offshore Wind Technology Investments Aim to Spur Domestic Development and Overcome U.S. Deployment Barriers
• DOE’s Advanced Demonstration Projects, Lake Erie Energy Development Corporation’s (LEEDCo’s) Icebreaker, and the University of Maine’s Aqua Ventus I continue to advance and aim to demonstrate novel offshore wind technologies by 2022.
• Developers included energy storage solutions in their proposals submitted to Massachusetts 83C and 83D solicitations (Massachusetts Clean Energy 2017 and 2018).
• DOE announced on June 15, 2018, that it will begin negotiations with the New York State Energy Research and Development Authority (NYSERDA) to form an Offshore Wind Research Consortium. The award resulted from a $20.5 million DOE funding opportunity to encourage public-private offshore wind partnerships that address U.S. offshore wind technology issues.
U.S. Supply Chain Seeing Some Early Activity Even Before Execution of Major Power Purchase Agreements
• Clemson University and MHI/Vestas have signed a 5-year partnership agreement to test the V164-9.5 MW turbine’s drivetrains (Clemson University 2017).
• Zentech/Renewable Resources International, AllCoast/AK Suda, and Aelous Energy Group all intend to deploy a U.S.-flagged turbine installation vessel before 2020.
• Developers and state agencies are actively assessing port infrastructure requirements and evaluating potential investment opportunities. For example, New York’s Master Plan identified New York Harbor, the Hudson River, and Long Island as potential sites for manufacturing, staging, or operation and maintenance (O&M) activities.
Global – In 2017, 3,387 MW of Offshore Wind Capacity Was Commissioned Globally, Resulting in a Cumulative Installed Global Capacity of 16.3 GW
• The United Kingdom is still the largest offshore wind market with 5,824 MW of cumulative installed capacity, followed by Germany (4,667 MW), China (1,823 MW), Denmark (1,399 MW), and the Netherlands (1,124 MW).
• France, Poland, and Italy have all shown renewed interest in offshore wind given its increased level of cost competitiveness.
• While China continues to be the largest offshore wind market in Asia, Taiwan signed agreements with Ørsted, [2 DONG Energy changed its name to Ørsted in October 2017. This update will refer to Ørsted from here on.] WPD, Copenhagen Infrastructure Partners, Northland Power, and Yushan Power for 3,800 MW of capacity. Japan, South Korea, and India also continue to be emerging players in Asia’s offshore wind market.
Globally, Auction Prices Continue To Fall: Developers Have Placed Four Bids that Were Termed as “Zero-Subsidy” to Date
• Bids in the most recent Dutch auction (700‒750 MW, March 2018) and the German Borkum Riffgrund West 1 project (420 MW, April 2018) were entered as “zero-subsidy” bids…Note that the Dutch and German auctions do not include the grid connection costs.
• Despite higher prices in the past, the recent 2017 U.K. offshore wind auction saw bids prices fall in line with global averages.
Globally, Turbines Continue To Grow in Capacity, Hub Height, and Rotor Diameter— Decreasing Overall Project Costs
• General Electric (GE) announced the development of a 12-MW wind turbine, the first original equipment manufacturer (OEM) to go above 10 MW (rotor diameter of 220 meters (m), 260 m total height), which the company expects to be available by 2021. Senvion and Siemens Gamesa have also announced 10-MW+ turbine designs.
Developers Continue To Test New Fixed-Bottom Substructures To Overcome Geotechnical, Environmental, Domestic Content, and Installation Challenges
• EDF Renewables deployed the first cement gravity-based foundations at its Blyth Offshore Demonstrator in the United Kingdom. Jysk Energi deployed gravity-based foundations at Nissum Bredning in Denmark as part of a joint demonstration project with Siemens. Vattenfall installed its suction bucket and jacket substructure at its European Offshore Wind Deployment Centre in Aberdeen Bay, Scotland.
Numerous Floating Substructure Configurations Continue To Be Evaluated and Demonstrated
• Equinor4 successfully installed its five-turbine, 30-MW Hywind, which uses a spar substructure, off the coast of Scotland in October 2017.
• Senvion and Principle Power LLC have partnered to test floating platforms capable of supporting offshore wind turbines that are 10 MW or larger in real-world conditions by 2021.
• Ideol’s Floatgen 2-MW demonstration project was assembled in port, towed to sea, moored to the seafloor at Le Croisic (France), and connected to the grid in May 2018. Statoil ASA changed its name to Equinor ASA in March 2018. This update will refer to Equinor from here on.