Global offshore wind energy holds promise, but suffers a U.S. setbackDavid Wagman | August 18, 2019
Offshore wind market growth predictions show accelerated growth in the next decade, with cumulative capacity ranging from 154 to 193 gigawatts (GW) by 2030. Long-range predictions suggest generating capacity in excess of 500 GW by 2050, according to a new report from the National Renewable Energy Laboratory (NREL).
The 2018 Offshore Wind Technologies Market Report provides quantitative information about the offshore wind market, technology and cost trends in the United States and worldwide. The report provides detailed information on the domestic offshore wind industry and its technical and market barriers.
The report covers the status of the 176 operating offshore wind projects through Dec. 31, 2018, and also provides the status of, and analysis on, a pipeline of 838 projects in various stages of development around the world.
The U.S. offshore wind sector suffered a setback in early August after the federal Bureau of Offshore Energy Management (BOEM) said that it needed more time to study the potential cumulative effect of proposed wind projects in the waters off the Massachusetts coast.
The BOEM action delayed progress by developers of the proposed 800 megawatt Vineyard Wind project. Vineyard Wind is 50% owned by funds of Copenhagen Infrastructure Partners and 50% by Avangrid Renewables.
Vineyard Wind leased a 160,000 acre area south of Martha's Vineyard roughly 15 miles from the nearest shore. The project is intended to consist of an array of wind turbines, spaced at least eight-tenths of a mile apart, that are each capable of generating 9.5 MW of power.
Submarine cables would be installed to connect the project site to a landing point on shore. Offshore cables would be buried up to six feet below the sea floor; onshore cables would be buried along proposed rights of way.
In announcing its decision, BOEM said that comments received from stakeholders and other agencies requested a "more robust cumulative analysis" of the proposed offshore wind farm. "Because BOEM has determined that a greater build out of offshore wind capacity is more reasonably foreseeable than was analyzed in the initial draft EIS (Environmental Impact Statement), BOEM has decided to supplement the Draft EIS and solicit comments on its revised cumulative impacts analysis."
Project developers said they remained committed to delivering the project, even with a delayed project schedule. They had planned to take advantage of a federal production tax credit that is set to expire and that was seen as critical in making the project financially viable.
In a statement, Tom Kiernan, CEO of the American Wind Energy Association called the Bureau's decision "regrettable" and said that offshore wind development is expected to result in a $70 billion investment into the American energy supply chain.”
Sector-wide cost reductions
In its broader market analysis, the NREL report said the global wind industry is seeking cost reductions through larger turbines with rated capacities of 10 MW and beyond.
It said that through technology innovation, turbine original equipment manufacturers have been able to limit the rise in turbine cost ($/kilowatt) and manage the increase in mass (kilogram/kilowatt) to allow turbine growth to continue upward to at least 12 MW, if not 15 MW, in the next decade.
In 2018, the U.S. offshore wind energy project development and operational pipeline grew 1.4% to a potential generating capacity of 25,824 MW, the NREL report said. Increased U.S. market interest spurred competition at offshore wind lease auctions. The report said that higher offshore wind lease sale prices indicate increased confidence in future market growth driven by state policies as well as confidence in the regulatory and financial institutions to support offshore wind project development in the nascent U.S. market.
By the end of 2018, cumulative global offshore wind installed capacity reached 22,592 MW from 176 operating projects. As of Dec. 31, the global pipeline for offshore wind development capacity was about 272 GW, NREL said.