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Biden administration targets 30 GW of US offshore wind by 2030

30 March 2021 Keiron Greenhalgh

The US government announced plans 29 March to build 30 GW of offshore wind capacity by 2030, equivalent to a 1,000-fold expansion of current commercial capacity of 30 MW.

Achieving such a target will pave the way to 110 GW of generation capacity by 2050, the White House said.

The proposed rapid expansion of the US offshore wind generation fleet will see more than $12 billion/year in capital investment in projects, the Biden administration revealed after a meeting with stakeholders. The White House said it expects more than 44,000 workers to be employed in the offshore wind sector by 2030 and nearly 33,000 additional jobs in communities supported by offshore wind activity.

The investments would lead to the construction of up to 10 new manufacturing plants for offshore wind turbine components, new ships to install offshore wind turbines, and up to $500 million in port upgrades, according to a separate Department of Energy (DOE) statement.

The American Clean Power Association (ACP) said the target marked a "historic day for offshore wind energy in America."

The proposed program includes capacity targets, loans for developing the wind farms from DOE, and support from the Department of Transportation (DOT) for the port infrastructure, reflecting the all-government approach being taken and that will be needed for the exponential growth if the 2030 goal is to be met.

"This offshore wind goal is proof of our commitment to using American ingenuity and might to invest in our nation, advance our own energy security, and combat the climate crisis," said Secretary of Energy Jennifer Granholm. "DOE is going to marshal every resource we have to get as many American companies, using as many sheets of American steel, employing as many American workers as possible in offshore wind energy — driving economic growth from coast to coast."

US offshore wind generation has lagged its onshore counterpart as well as offshore wind capacity elsewhere around the globe, illustrating the dramatic need for government support such as this and a comprehensive strategy, observers say.

US developers brought 16.913 GW of wind generation online in 2020, a record annual total, according to the American Clean Power Association, that meant some 122.468 GW of wind power capacity was operational in the US at the end of last year (all but 42 MW of the total is onshore).

But China alone brought over 3 GW of offshore wind capacity online in just 2020, while the UK had more than 10 GW of offshore wind generation online by the end of 2020, according to the latest Global Wind Energy Council data, released last week. The UK's offshore wind fleet is largely fixed-bottom, but efforts there are gaining pace in the floating wind sector, too.

ACP CEO Heather Zichal said the package would create a stable policy platform for offshore wind development. "Now is the time to seize on this once-in-a-generation opportunity," she added.

BOEM to ramp up permitting

To support efforts to meet the 2030 target, the Bureau of Ocean Energy Management (BOEM) will advance new lease sales and complete reviews of at least 16 construction and operations plans by 2025, which the Biden administration said represented more than 19 GW of capacity.

BOEM also announced a priority "Wind Energy Area" in the New York Bight — an area of shallow waters between Long Island, New York, and the New Jersey coast adjacent to the largest metropolitan population center in the US. It is home to more than 20 million people and their energy needs, BOEM added.

The agency is set to publish a proposed sale notice, followed by a formal public comment period and a lease sale in late 2021 or early 2022.

Also, work on an environmental impact statement for the 1.1-GW Ocean Wind offshore wind project off the coast of New Jersey has begun, putting it in line to become America's third commercial-scale offshore wind project, the regulatory agency said.

BOEM announced 8 March it had completed the environmental review for Vineyard Wind's proposed 800-MW offshore wind farm slated for completion in the second quarter of 2024 in waters off the coast of Massachusetts.

The government agency said 29 March it anticipated initiating environmental reviews for up to 10 additional projects later this year.

Analysts told IHS Markit in February that over 20 GW of US offshore wind capacity is already in the permitting pipeline, but it needs substantially speedier help from the administration if it is to get up and running soon.

Where all that capacity goes is a big question, IHS Markit Senior Research Analyst Samantha Bobo said 30 March, which makes research and port funding announced by the administration 29 March all the more important, especially outside of the northern end of the US' Atlantic Ocean coastline.

Showing them the money

At the same time as the 30 GW target was made public, DOE's Loan Programs Office (LPO) unveiled details of access to $3 billion in funding through the office's Title XVII Innovative Energy Loan Guarantee Program. Potential partners include offshore wind and offshore transmission developers, suppliers, and other financing partners to scale up the US offshore industry, DOE said. To date, the LPO has provided $1.6 billion in support of projects totaling about 1 GW of onshore wind, it added.

And DOT's Maritime Administration announced port authorities and other applicants would be able to apply for $230 million in grants for port and intermodal infrastructure-related projects through the Port Infrastructure Development Program. Such grants could support shore-side wind energy projects, such as storage areas, laydown areas, and docking of wind energy vessels to load and move items to offshore wind farms, it said.

"Tackling the climate crisis is vital to our nation's future," Secretary of Transportation Pete Buttigieg said 29 March. "The Biden-Harris Administration is taking actions that show how creating jobs and addressing climate change can and must go hand in hand. Today's announcement makes a critical investment in our nation's ports, which in turn builds up the resilience and sustainability of America's economy."

In his first week in office, President Joe Biden issued executive orders seeking to bolster the infrastructure and clean energy sectors, including expanding opportunities for the offshore wind industry.

Thrilled with concrete measures

Delivering on that promise found a warm response from multiple constituencies.

"We are thrilled to see the White House stepping up with concrete measures to help unleash America's nascent offshore wind industry," said American Council on Renewable Energy CEO Gregory Whetstone, adding: "Offshore wind is a potentially massive emerging sector in the US that can drive billions of dollars in economic investment, create tens of thousands of good-paying American jobs, and provide abundant pollution-free power."

There was support from environmentalists, too. "President Biden's commitments to offshore wind will help create a pipeline of critically needed clean energy, clean air and family-sustaining jobs. Offshore wind also is uniquely positioned to address our country's greatest challenges—the intersecting environmental, public health and economic crises that exacerbate racial and social injustices and threaten the planet," Kit Kennedy, senior director in the Climate & Clean Energy program at Natural Resources Defense Council, said.

But it won't all be plain sailing. On the same day the target was announced, US Customs and Border Protection (CBP) made public a decision that muddied the waters on the multitude of ships that will service the proposed expansion to 30 GW with its interpretation of the Jones Act, according to law firm Winston and Strawn.

The Jones Act is a maritime law that requires goods shipped between US ports to be transported on ships that are built, owned, and operated by US citizens or permanent residents.

The Offshore Marine Service Association was not happy with the CBP decision. The trade association's CEO, Aaron Smith, said it was "confusing as it conflicts with the administration's stated purposes and could jeopardize millions of dollars of investment and threaten opportunities for Americans to work in this critical green industry. We look forward to working with the administration to clarify the agency's action and ensure the continued investment and support for the next generation of American offshore energy."

Another hurdle to overcome will be the requirements for transportating the power from offshore facilities to land and then onwards to load centers.

"While the $3 billion of debt capital to support the industry does include transmission developers, it specifies that they're offshore transmission developers ... . Some consideration needs to be given at both federal and state level to whether the existing grid onshore at the points of interconnection can handle the influx of that huge amount of power that would be generated by meeting these targets or if additional funding should be allocated to upgrades to or new development of onshore transmission so the power can actually flow to where it's needed," said IHS Markit's Bobo.

Posted 30 March 2021 by Keiron Greenhalgh, Editor, Energy and Natural Resources Group, IHS Markit

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