December was a month of major “firsts” in the U.S. offshore wind space. The first federal auction for offshore wind was held for the West Coast, and the first federal leases for commercial floating wind projects were provisionally awarded.
These events are key milestones in the journey to achieve the federal vision of 15 GW of floating wind in the USA by 2035. Several major challenges in developing the supply chain will need to be addressed if these ambitions are to be met.
The drive to grow the U.S. offshore wind segment into a leading offshore wind market continues. The foundations are firmly in place to support the deployment of 30 GW of offshore wind by 2030 and 110 GW by 2050.
Intelatus' forecast accounts for close to 70 projects that will install around 78 GW of capacity in this and the next decade, and a total of 110 GW by 2050.
The 78 GW forecast capacity will require capital expenditure amounting to around $240 billion to bring onstream, a recurring annual operations and maintenance spend of around $8 billion once delivered, and close to $35 billion of decommissioning expenditure at the end of commercial operations:
•Two major OCS projects with around 940 MW of capacity have already reached FID, one has commenced offshore construction, and the other is preparing for offshore construction.
•The number of projects that are expected to make a final investment decision within the next 18 months is nine, amounting to around 7.3 GW of capacity.
•A further 11 projects with a capacity of close to 10 GW are expected to make an FID within 18-36 months as well as an additional twelve projects for 12.5 GW in 36-60 months.
•Longer term, we have identified 35 projects with a total capacity of 48 GW, which support the installation of a cumulative 73 GW by 2035 and over 82 GW by 2040.
12 OCS developments with a potential of close to 20 GW are currently undergoing federal permitting review to create the foundation of meeting the 30 GW by 2030 goal.
17.5 GW of project capacity has secured offtake commitments from states. As a result of the recent New York Bight auction, New Jersey has announced that it is advancing plans to produce 1.2-4 GW of offshore, the process for which will take place in 2023 and project commissioning by 2030.
This comes on top of Rhode Island’s announcement last month to procure 600-1,000 MW in 2023. Longer term, deployment goals by states already amount to over 96 GW, which is beginning to make the White House goal of 110 GW by 2050 look somewhat conservative.
However, the strong foundations for growth in the East Coast bottom-fixed segment have been challenged by supply chain constraints and cost inflation.
Vineyard Wind, Park City Wind, Commonwealth Wind, Mayflower and the Commercial Coastal Virginia Offshore Wind project have all reported significantly higher construction costs than originally planned as well as supply chain challenges.
For more information about the Intelatus Global Partners, please visit www.intelatus.com or contact Philip Lewis at +44 203-966-2492.
Philip Lewis is Director of Research at Intelatus Global Partners. He has extensive market analysis and strategic planning experience in the global energy, maritime, and offshore oil and gas sectors.