The first offshore wind farm in the United States was installed in August, and over the past weeks U.S. offshore wind has continued to receive a lot of attention. And, as Commercial Director for the Americas, Dorte Kamper’s work this year has involved more sailing than ever before.
Politicians, industry players and the public are eager to visit Deepwater’s Block Island Wind Farm, home to five GE Renewable 6 MW Haliade turbines powered by LM Wind Power 73.5 meter blades. For instance, on September 29-30 the Danish Ministry of Foreign Affairs hosted an Offshore Wind Academy in Boston, headed by two ministers and the Danish Crown Prince and Princess. Days later, the International Partnering Forum took place in Newport, Rhode Island, and the conference was sold out with more than 450 participants. On the last day of the conference, LM Wind Power and GE co-hosted two sailing trips to Block Island Wind Farm.
This year’s American Wind Energy Association (AWEA) offshore conference on October 25-26 also featured a boat trip to Block Island as the main attraction. Now returned from this most recent voyage, Dorte shares her insights on U.S. offshore wind developments.
Strong winds blowing offshore
The mood at this year’s AWEA offshore wind conference was very positive. The cause for celebration: the first offshore commercial wind farm in the U.S., which has already created many local jobs in Rhode Island but also in the Mexican Gulf where experienced companies from the oil and gas offshore industry are eager to participate in offshore wind. The last work on Block Island is being finalized, and the expectation is to produce energy to the island and the mainland grid by the end of November.
The project might be relatively small with only five turbines, but the importance of having the first U.S. offshore wind farm producing energy cannot be overstated. The project itself is remarkable as the five offshore turbines will first and foremost replace current diesel generators on the small Block Island, where the inhabitants will see a considerable drop in their electricity prices, and hereafter power will be sent to the mainland grid.
Offshore wind is in focus in the northeast, and participants at the AWEA conference included Senators, Congressmen, the Governor, Department of Energy staff and Bureau of Ocean Management staff. Offshore conditions on the east coast are quite similar to the European North Sea, which is attracting experienced European developers such as DONG, Copenhagen Infrastructure Partners, Iberdrola and Vattenfall. U.S. developers, including Deepwater, Fishermen’s Energy, Leedco, and US Wind, are working on both demonstration projects supported by the Department of Energy in order to start the industry and large commercial projects in various planning phases.
On the west coast, the water depth is high, and innovation on floating solutions is required to move offshore wind forward. California has ambitious renewable goals, but onshore wind and solar will likely be the first choice before offshore wind.
What comes next for U.S. offshore wind?
Offshore in the U.S. has better conditions than ever to move forward – the question is when it will happen. The fact that Block Island is soon producing energy to the grid is a major milestone, and several small projects are now finalizing power purchase agreements.
A variety of factors are making offshore wind more attractive as an energy source, such as: participation of experienced European developers and wind turbine manufacturers; recent low bid prices for offshore wind projects in Europe; green/environmental competition between Massachusetts and New York; high energy prices in Long Island, New York City and Boston; and aging coal and nuclear plants, from the 1950s and 1960s.
The political support in the northeastern states is also better than ever. Steps in the right direction include the latest legislation in Massachusetts with 1600 megawatts (MW) earmarked for offshore wind before 2027, and New York´s goal of 50% renewable energy before 2030. Federally, the Obama administration presented the National Offshore Wind Strategy of 86 GW before 2050, and the Clean Power Plan is requiring participation of offshore wind to reach a 32% reduction in greenhouse gas emissions by 2030. The long term federal plans could be impacted by the coming change in government, so this will be followed closely by the industry.
All-in-all, the positive hype around U.S. offshore seems to be shared among all stakeholders, and the expectation is that offshore projects will happen sooner than originally expected. This means that the smaller demonstration projects should get built in 2017-2019, and the larger commercial projects from 2020 and onwards.
Offshore is a strategic focus area for LM Wind Power, with the potential to represent a significant portion of the company’s revenue in only a few years. We are excited by the favorable trends in the U.S. offshore market, as northeast renewable targets get more precise, support programs become more structured and investors more actively leverage the opportunities given by the industry’s successful drive to lower the cost of energy of offshore wind.
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