Don Quixote famously attacked a field of windmills to capture the spoils of “righteous battle” in his quest for glory. Can giant wind turbines provide clean power for the U.S. economy or is this a fantasy too? Right now, there is already 110 gigawatts of wind generation capacity installed in the US out of the total grid capacity of 1,100 gigawatts. How much power does 110 gigawatts of wind power produce? That depends on a concept called “capacity factor” which is the percentage of time the plant is operating at 100% production. Wind (35%) and solar (25%) have lower capacity factors than nuclear and fossil fuel generation because the wind does not always blow and the sun is not always shining. But there is huge potential for wind – both onshore and offshore – in our future clean energy mix. Texas’ 25 GW of onshore wind production would make it the fifth largest wind energy generator in the world if it were its own country. Germany’s 55 GW of wind power contributes 17% of its energy mix. Both regions have seen power prices to customers drop dramatically as wind power grows. In fact, a particularly windy February pushed Germany’s power prices negative this year, a phenomenon that has also happened in Texas a few times since 2015.
Wind produces greenhouse gas-free energy without billions of dollars in spending on fossil fuel exploration, transportation, refinement and production in far flung countries. Wind power is a good compliment to solar power as it blows primarily at night while solar produces during the day. With sufficient battery storage, the two combined can make a complete energy generation solution for much of the electricity needed in the U.S. The biggest challenge for wind, though, is siting turbines near dense population centers.
This is where offshore wind comes in. US coastal wind has a capacity of 2,000 GW, twice that of the current electrical grid. Although Rhode Island lays claim to the only operational offshore wind farm in the country, the current project pipeline is already set to add 26 GW of offshore wind in the 2020s. New York State utilizes that much power on a high load summer day. The levelized cost of energy (LCOE), a metric denoting the life-time cost of energy, has declined 84% since 2010 to $57/MWh for solar. Onshore wind’s LCOE dropped, 49% to $50/MWh while offshore costs fell 56% to $89/MWh (for reference, the LCOE for natural gas is between $45 and $70/MWh). The high cost of offshore wind results from the challenge of operating massive turbines in a corrosive environment 20 to 50 miles off the coast with powerful sea swells and where routine maintenance is difficult. “Submarine cables” carrying the power to shore and platform foundations add to the cost. Most wind turbines sit in water depths of 30 to 130 feet on a steel tube driven deep into ocean floor. Floating platforms, which are under development, will give turbines access to even greater ocean depths. Both foundation types have their roots in offshore drilling and are often manufactured in the same yards as their oil counterparts.
Both wind-focused project developers and turbine manufacturers are well positioned for the rise of US offshore wind. On the wind generation side, NextEra Energy (NEE) commands the largest wind portfolio in the U.S. with over 13 GW of generating capacity. However, the Dutch company Orsted (DOGEF) is expected to be a dominant player with existing commitments to build 15 GW of new offshore generation capacity in the US by 2030. Announcements of big new projects come almost daily. On the turbine side, General Electric (GE) currently owns 41% of the market, Vestas Wind Systems (VWSYF) has 24%, and Siemens Gamesa (GCTAY) has 20%. Siemens has announced plans to sell the world's largest turbine with a capacity of 14 MW (1,000 megawatts equals one gigawatt) and blades that span a diameter of 222 meters (the length of 3 Boeing 747s). GE currently has a 12 MW model and Vestas has a 10 MW model.
New York State is planning to build 9 GW of offshore wind by 2035 and has already announced a request for proposals of 2.5 GW of offshore wind energy. McKinsey estimates East Coast capacity jumping to 10 to 20 GW in the early 2030s with Massachusetts, Rhode Island, Maine, Connecticut, New York, New Jersey, and the Carolinas leading the charge. Vineyard Winds 1, which will be located 15 miles south of Cape Cod, is set to be the first utility-scale project with 800 MW of generating capacity.