While construction productivity issues continue to present immediate challenges for the U.S. offshore wind industry, the long-term outlook remains strong for the nascent sector, according to a recent report from business intelligence and consulting firm Intelatus Global Partners.
Intelatus' most recent monthly report on the U.S. offshore wind industry identifies a number of factors hindering offshore construction activities--from weather delays to the scheduling and availability of necessary vessels.
"Construction vessel productivity to date has been below expectation, due to several reasons particular to the area," the firm said. "As a pre-commercial project, Intelatus anticipated that South Fork would struggle to deliver the productivity seen on a commercial scale wind farm, like Vineyard. But Vineyard construction is on hold now until the end of the third quarter of this year, with 15 monopiles remaining to be installed, 32 transition pieces, 52 turbines and array cables for six complete turbine array cables and three partial turbine arrays to complete.
"Construction vessel productivity to date has been below expectation, due to several reasons particular to the area. The monopile installation vessel booked for the project will be starting monopile installation at CVOW-C in May. The wind turbine installation vessel (WTIV) is due back on site around September. The array cable layer is currently busy on a project in the Middle East.
"A commercial operation date (COD) within 2024 seems to be a stretch target, given the amount of remaining work," according to Intelatus. "Vessel productivity on the new projects starting construction needs to be bought in line with the norms seen in the European market if delays and vessel availability are not to become key challenges."
Positive outlook
Despite the setbacks, Intelatus’ report highlights a number of positive signs of activity in the U.S. Northeast and Mid-Atlantic offshore wind segment: South Fork, has completed the installation of all turbines, Vineyard is progressing, both Revolution Wind and Coastal Virginia will start offshore construction imminently and the construction of Sunrise Wind is queued up to commence after Revolution. Including the six turbines commissioned before 2021, these projects will take the total beyond 400 turbines and 5 gigawatts (GW) of installed capacity.
Further, Intelatus anticipates that developers will take final investment decisions (FID) on approximately 8.5 GW of additional capacity before the year end.
"A further positive sign has been a technical clarification around Inflation Reduction Act (IRA) related tax credits available to developers, giving project developers better clarity and reducing risks when making investment decisions," the firm said.
Intelatus’ long-term project pipeline has grown to about $380 billion and close to 96 GW.