Stephen J. Naimoli
Key Points
Offshore wind is a key part of the United States’ climate strategy. The country hopes to deploy 30 gigawatts (GW) of offshore wind by 2030.
In addition to climate goals, the federal government hopes the offshore wind industry will drive investment in new manufacturing plants and create 44,000 jobs by 2030.
The federal government invests in research and development, runs the leasing process for offshore wind farms, and provides funds to incentivize deployment. The states secure contracts for power from planned offshore wind farms and leverage the process to generate economic development in their borders.
Most offshore wind development is on the East Coast due to favorable waters, but interest has spread to the Gulf of Mexico and the West Coast, where the country could harness over 700 GW of potential.
Analysis
Vision
The United States’ vision for offshore wind is to build a strong industry with domestic supply chains and significant deployment of the technology off all the country’s coasts. Unlike some other countries covered in this series, the United States does not have a public-facing document laying out the country’s vision for offshore wind. However, the Biden administration has taken several actions that can be analyzed to understand a coherent vision supporting domestic jobs and climate goals.
In March 2021, President Biden announced a goal of building 30 GW of offshore wind power in U.S. waters by 2030. The United States is starting almost from zero, given that currently the United States only has two offshore wind farms—one off the coast of Rhode Island with a capacity of 30 megawatts (MW) and a pilot project off the coast of Virginia with a capacity of 12 MW. Six states along the East Coast have collectively pledged to build 30.5 GW of offshore wind off their coasts by 2035, roughly in line with the federal government’s target. In the longer term, the federal government hopes to install 110 GW of offshore wind by 2050. Princeton University suggests that the United States would need to build between 200 and 400 GW of offshore wind by 2050 to help achieve a net-zero emissions economy.
The federal government claims that the 30 GW target for 2030 will create 44,000 jobs in the offshore wind industry and another 33,000 indirect jobs in supporting industries. In addition, the government says the target will drive the buildout of a domestic supply chain including new manufacturing plants for component parts of turbines, increased demand for steel, and the construction of new ships that can install wind turbines.
The administration’s offshore wind strategy feeds into its larger power sector and climate goals. President Biden has pledged to eliminate carbon from the U.S. power sector by 2035. The United States’ latest nationally determined contribution to the Paris Agreement pledges a 50–52 percent decrease in greenhouse gas emissions from 2005 levels by 2030. As of 2019, U.S. emissions had decreased 13 percent from 2005 levels.
Strategy
The United States is using several levers at the federal and state level to drive deployment of offshore wind. The federal government is leveraging its oversight over leasing and making investments to drive down the cost of manufacturing and deployment. At the state level, regulators are using the procurement process to drive deployment and secure economic development in their states.
Leasing for offshore wind in the United States is overseen by the Bureau of Ocean Energy Management (BOEM), part of the Department of the Interior (DOI). The regulator auctions off lease areas and then requires site assessment plans and construction and operations plans to approve offshore wind development. This process has historically been slow and subject to complex litigation, exemplified by a high-profile fight over the proposed Cape Wind offshore wind farm, which was proposed in 2001 and ultimately abandoned in 2015. In March 2021, the Biden administration promised to speed up the process and approve 16 projects by 2025, although it has not made structural changes to the process. As of October 2021, there are 13 projects at the construction and operations plan stage of the process, meaning BOEM is soliciting public input and will be drafting final environmental impact statements for these projects in the next few years.
Alongside the DOI’s oversight of the leasing process, the Department of Energy is investing in research and development to improve the design of offshore wind turbines, and the department’s Loan Program Office is making $3 billion in loans available to project and transmission developers. The Department of Transportation has made $230 million in grants available for port infrastructure upgrades. Congress also provided support to offshore wind with a new investment tax credit in 2020 that covers 30 percent of investment costs for projects built before 2026.
Ultimately, the power from offshore wind farms is sold to utilities. In this process, the states have significant leverage. Many states run procurement processes to help meet their energy goals. Massachusetts, for example, has held twosolicitations that have each selected an 800 MW offshore wind project in development and the third round is seeking another 1,600 MW. States are increasingly using this process to ensure that developers are paying for necessary infrastructure upgrades and helping to build domestic supply chains. In New York’s 2020 solicitation, for example, the state added a requirement that bidders must include Port Infrastructure Investment Plans. The winning bids included commitments to building a tower manufacturing facility at the Port of Albany and a staging facility and operations and maintenance hub at the South Brooklyn Marine Terminal.
Geography
To date, most attention to offshore wind has come from the East Coast of the United States. As shown in Figure 1, all 13 of the offshore wind projects currently in the federal permitting process are along the East Coast. The East Coast is ideal for offshore wind projects because of favorable wind potential, a relatively shallow seabed that allows for fixed-bottom towers, and proximity to demand centers such as Boston and New York City.
However, the secretary of the interior announced in October 2021 that the BOEM would be holding lease auctions for areas in the Gulf of Mexico and off the coasts of California and Oregon in the coming years. The West Coast has traditionally been considered more difficult for offshore wind development because of a much deeper seabed, likely requiring newer, less-tested floating turbines. If development takes off in these areas, it could contribute significantly to the government’s deployment goals. The California coast alone has the potential to host about 200 GW of offshore wind and the Gulf of Mexico could host over 500 GW.
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