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The U.S. administration’s energy policy shift under President Joe Biden is paving the way for a thriving offshore wind industry in the United States, as the federal government seeks to speed up environmental reviews to make offshore wind a major contributor to new clean energy goals. In the United States, offshore wind has not really taken off, with only two small offshore wind farms in operation with less than 50 megawatts (MW) of combined capacity. By way of comparison, Europe has 113 offshore wind farms in 12 countries installed, with 25 gigawatts (GW) of total offshore wind capacity.
United States breaks records in wind, solar and onshore storage facilities, with records for all of them in 2020, according to the American Clean Power Association.
But offshore wind has lagged considerably, also due to lengthy environmental reviews by federal agencies and the weighing of the pros and cons of having offshore wind installations in plain sight of beaches or in fishing grounds. commercial.
Federal policy change
But now President Biden has made offshore wind a priority policy in one of his first executive actions to fight the climate crisis. While suspending new leases of oil and natural gas on public land or offshore waters, President Biden asked the Home Secretary to identify steps that could be taken to double renewable energy production at from offshore wind by 2030.
If you compare it to current production, it’s really a low bar, the Wall Street Journal Notes.
But the drastic shift in energy priorities could spur more projects as a growing number of US states on the East Coast, just think of New York, are setting ambitious clean energy targets.
States have established more than 29 GW offshore wind supply targets to date, while developers plan to bring 9.1 GW of offshore wind online by 2026 by developing 13 offshore wind projects, according to the American Clean Power Association.
The 800 MW Vineyard Wind project, 15 miles offshore from Martha’s Vineyard, is set to become the first large-scale offshore wind farm in the United States and begin supplying power in 2023.
The Bureau of Ocean Energy Management (BOEM) said earlier this month that it resume environmental review of the Vineyard Wind project. The entire review was canceled late last year by the Trump administration following a request from Vineyard Wind developers to put the process on hold to see if the design needed tweaking after the change of turbine supplier.
“Offshore wind has the potential to help our nation tackle climate change, improve its resilience through reliable energy and spur economic development to create well-paying jobs,” said Amanda Lefton, director of the BOEM.
The developers of Vineyard Wind, a joint venture between Avangrid Renewables and Copenhagen Infrastructure Partners (CIP), mentionned after resuming the federal review process:
“We look forward to working with the agency as we launch an industry that will create thousands of well-paying jobs while taking meaningful action to reduce the impact of climate change.”
Smoother authorization processes could create a $ 166 billion industry
With supporting policies and more flexible leasing and licensing processes, the development of offshore wind could generate a lot of value for the U.S. economy and create thousands of jobs, Wood Mackenzie said last year in research commissioned by industry associations.
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More flexible leasing and licensing processes for offshore wind projects could facilitate up to $ 166 billion in offshore wind investments in the United States by 2035, research shows. The potential of the offshore wind industry in the United States is enormous, if the right policies are in place, according to industry associations.
Mackenzie Wood waits that nearly 25 GW of offshore wind capacity will be added to the United States until 2029.
“The states have already selected 9 GW of capacity, which is more than 70% of construction planned until 2026. And in New England and New York, 80% of wind construction during this period will be located at sea, ”WoodMac said in a report. in June 2020.
“Offshore wind can be deployed at scale, making it a powerful tool for policymakers to pursue more ambitious clean energy goals,” said Max Cohen, senior analyst at Wood Mackenzie.
In addition, the US offshore industry also offers opportunities for major European oil players, Cohen added.
Big oil bets big on US offshore wind
Some of Europe’s major oil companies, eager to show their low-carbon energy commitments and expand their clean energy portfolios, have already taken steps to seize these opportunities.
BP made its first entry into the offshore wind market in September with a strategic partnership in US offshore wind assets with Equinor in an agreement worth US $ 1.1 billion.
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BP bought 50 percent in Equinor Empire Wind and Beacon Wind assets off Long Island and off Massachusetts, respectively, and the strategic partnership will develop up to 4.4 GW from these two offshore wind projects. The two supermajors will also jointly seek other offshore wind opportunities in the United States.
Equinor and its partner BP were selected last month for the the biggest offshore wind award in the United States to date, to supply New York State with offshore wind power from the first and second phases of Empire Wind and Beacon Wind for a total of 3.3 GW of power to the State.
“The east coast of the United States is one of the most attractive growth markets in the world for offshore wind,” said Anders Opedal, CEO of Equinor.
With supportive state and federal policies, US offshore wind could become an even more attractive growth market.
By Tsvetana Paraskova for OilUSD
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