March 10 2021
While the UK leads, China is not far behind. Adding 3 GW of new offshore wind capacity in 2020, China installed over half of all global offshore wind capacity last year with a total of nearly 6 GW at present. Germany, notable for its rapid push for renewables implementation over the last few years, raised 2030 targets to 20 GW, up from roughly 7.5 GW at present. As fixed-foundation offshore wind can only be built in depths of up to 165 feet (or 50m), the relatively shallow waters and favorable wind climate of the North Sea have lent the Netherlands and Denmark a leg-up in the industry as well. Denmark also recently approved plans to construct an artificial island in the North Sea to serve as a clean energy hub, which will be the largest construction project in Danish history.
The United States. After minor setbacks, the East Coast of the United States is emerging as one of the largest potential future markets worldwide. There is the potential to use offshore wind for roughly two times the total power demand. Cape Wind, a proposed wind farm off the coast of Cape Cod in view of the Kennedy family compound, was killed following years of lawsuits and, in this case, the disadvantages that came with being the first-mover. Now, however, the turbines can and will be placed far offshore on the continental shelf well out of view from the shoreline. There is currently only one operating commercial wind farm in US waters (Block Island), which is owned by Danish wind giant Ørsted. States along the East Coast are now aiming to deploy at least 10GW of offshore wind capacity by 2030, including New York, New Jersey, Virginia, Connecticut, Rhode Island and Massachusetts. President Biden signed an executive order to fast track these projects. The US has the opportunity to be a major contender in the industry and produce renewable power at a scale necessary to eventually replace large amounts of coal and natural gas fired generation.
Onshore infrastructure. The buildout of onshore grid infrastructure is crucial to accommodating the power sources from offshore wind farms. To interconnect 10 GW of offshore wind power to the grid costs anywhere between $6-8 billion. As an intermittent energy resource, offshore wind requires storage; there is already a plan to build 5 GW of storage in the US northeast, which could better exploit power from offshore wind projects. The US will also need to build manufacturing facilities and dedicated ports for the installation and maintenance of offshore wind turbines, which are estimated to cost over $100 million for each port.
Advantages. Because offshore wind can be sited near densely populated coastal areas and urban demand centers, the industry has great potential. It complements solar PV technology, especially on the East Coast as wind production is highest during winter months when solar production is lower, making offshore wind a valuable player in the energy mix. When visible from shore, offshore wind farms are sometimes subject to the “not in my backyard” mentality, but many turbines are now being built at unobservable distances from shore. If floating wind platforms can become cost-competitive this will further enhance offshore wind potential. As technology improves, costs continue to fall, and investment increases, there’s good reason to be optimistic about the future of offshore wind.
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