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Released May 24, 2023 | Sugar Land
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Against a backdrop of prohibitive costs and cancellations, the U.S. government gave tacit consent to a proposed windfarm off the coast of New Jersey that could power nearly half a million homes.
The Bureau of Ocean Energy Management (BOEM) completed an environmental review of a wind farm proposed by Ocean Wind LLC for a 98-turbine facility that would be positioned about 13 nautical miles off the coast of Atlantic City.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for the full report.
"BOEM continues to make progress towards a once-in-a-generation opportunity to build a new clean energy industry in the United States," said BOEM Director Elizabeth Klein. "Offshore wind is a critical component of the Biden-Harris administration's strategy to tackle the climate crisis, while creating good-paying jobs and ensuring economic opportunities are accessible to all communities."
The federal government set a goal of deploying 30 gigawatts (GW) of offshore wind energy capacity by 2030. The Block Island wind farm off Rhode Island and the Coastal Virginia Offshore Wind pilot already combine for 42 megawatts of capacity, and the Energy Department said last year that 40 GW of offshore wind is in the planning stages.
If the Ocean Wind project is ultimately sanctioned as planned, it could achieve as much as 1.4 GW of power, enough to meet the demands of around 500,000 average homes per year. It would also be the third commercial-scale offshore wind farm in U.S. territorial waters.
The incentives outlined in the massive Inflation Reduction Act from last year could support further development. Provided the components have a domestic manufacturing footprint, iron and steel mechanisms could be eligible for a 100% tax credit, for example.
The Congressional Research Service (CRS) provides an interesting caveat in new offshore leases that need to accompany any similar moves for offshore wind. The BOEM must offer at least 60 million acres for offshore oil and gas development in the previous year before granting similar concessions for wind.
"This could affect future federal offshore wind leasing efforts as well as decision-making for BOEM's upcoming offshore oil and gas five-year leasing program," a report from the CRS read.
Meanwhile, the National Renewable Energy Laboratory (NREL), part of the Energy Department, has its own doubts about forward progress, namely in the domestic manufacturing base. Reaching the government's 2030 goals, NREL said, "will require a significant ramp-up in domestic manufacturing, ports, vessels, and workforce, all of which are currently too limited to support the needed levels of commercial-scale offshore wind energy deployment."
Another issue is cost. While some prices at the wholesale level are on the decline, largely thanks to a stand-still commodities market, other goods remain expensive. For April, the Producer Price Index, a measure of prices at the wholesale level, showed prices for everything from plastic resins to carbon steel moved higher, creating potential obstacles to offshore wind. That's already apparent overseas. Norwegian energy major Equinor (NYSE:EQNR) (Stavanger, Norway), among the premier developers of offshore wind, decided to postpone development of the 1-GW Trollvind offshore wind farm "indefinitely."
Equinor pointed to "several challenges" in moving the project forward, including costs.
"Unfortunately, we no longer see a way forward to deliver on our original concept of having an operational wind farm well before 2030," said Siri Espedal Kindem, the vice president of renewables at Equinor.
An offshore wind development off Connecticut, meanwhile, could face a similar fate. Avangrid Incorporated (NYSE:AGR) (Orange, Connecticut), the U.S. subsidiary of Spain's Iberdrola, is trying to reconfigure a proposal for an 800-megawatt facility dubbed Park City Wind. Citing costs, a spokesman told the Hartford Courant there's emerging doubt over developments. Subscribers can click here for the project report.
"Avangrid is working with all stakeholders to find solutions to the global price increases outside of its control and deliver these important projects to Massachusetts and Connecticut," said company spokesman Craig Gilvarg.
The U.S. offshore wind sector is still in its nascent stage, and progress so far is well behind the pace set by peer economies such as the United Kingdom and China. While tax incentives are supportive, they come with a catch and expiration raises some questions of which comes first -- development or emission abatement.
"The IRA begins phasing out either in 2032 or when total greenhouse gas emissions in the power sector decline to at least 75% below 2022 levels--whichever comes last," the Energy Department said.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The Bureau of Ocean Energy Management (BOEM) completed an environmental review of a wind farm proposed by Ocean Wind LLC for a 98-turbine facility that would be positioned about 13 nautical miles off the coast of Atlantic City.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for the full report.
"BOEM continues to make progress towards a once-in-a-generation opportunity to build a new clean energy industry in the United States," said BOEM Director Elizabeth Klein. "Offshore wind is a critical component of the Biden-Harris administration's strategy to tackle the climate crisis, while creating good-paying jobs and ensuring economic opportunities are accessible to all communities."
The federal government set a goal of deploying 30 gigawatts (GW) of offshore wind energy capacity by 2030. The Block Island wind farm off Rhode Island and the Coastal Virginia Offshore Wind pilot already combine for 42 megawatts of capacity, and the Energy Department said last year that 40 GW of offshore wind is in the planning stages.
If the Ocean Wind project is ultimately sanctioned as planned, it could achieve as much as 1.4 GW of power, enough to meet the demands of around 500,000 average homes per year. It would also be the third commercial-scale offshore wind farm in U.S. territorial waters.
The incentives outlined in the massive Inflation Reduction Act from last year could support further development. Provided the components have a domestic manufacturing footprint, iron and steel mechanisms could be eligible for a 100% tax credit, for example.
The Congressional Research Service (CRS) provides an interesting caveat in new offshore leases that need to accompany any similar moves for offshore wind. The BOEM must offer at least 60 million acres for offshore oil and gas development in the previous year before granting similar concessions for wind.
"This could affect future federal offshore wind leasing efforts as well as decision-making for BOEM's upcoming offshore oil and gas five-year leasing program," a report from the CRS read.
Meanwhile, the National Renewable Energy Laboratory (NREL), part of the Energy Department, has its own doubts about forward progress, namely in the domestic manufacturing base. Reaching the government's 2030 goals, NREL said, "will require a significant ramp-up in domestic manufacturing, ports, vessels, and workforce, all of which are currently too limited to support the needed levels of commercial-scale offshore wind energy deployment."
Another issue is cost. While some prices at the wholesale level are on the decline, largely thanks to a stand-still commodities market, other goods remain expensive. For April, the Producer Price Index, a measure of prices at the wholesale level, showed prices for everything from plastic resins to carbon steel moved higher, creating potential obstacles to offshore wind. That's already apparent overseas. Norwegian energy major Equinor (NYSE:EQNR) (Stavanger, Norway), among the premier developers of offshore wind, decided to postpone development of the 1-GW Trollvind offshore wind farm "indefinitely."
Equinor pointed to "several challenges" in moving the project forward, including costs.
"Unfortunately, we no longer see a way forward to deliver on our original concept of having an operational wind farm well before 2030," said Siri Espedal Kindem, the vice president of renewables at Equinor.
An offshore wind development off Connecticut, meanwhile, could face a similar fate. Avangrid Incorporated (NYSE:AGR) (Orange, Connecticut), the U.S. subsidiary of Spain's Iberdrola, is trying to reconfigure a proposal for an 800-megawatt facility dubbed Park City Wind. Citing costs, a spokesman told the Hartford Courant there's emerging doubt over developments. Subscribers can click here for the project report.
"Avangrid is working with all stakeholders to find solutions to the global price increases outside of its control and deliver these important projects to Massachusetts and Connecticut," said company spokesman Craig Gilvarg.
The U.S. offshore wind sector is still in its nascent stage, and progress so far is well behind the pace set by peer economies such as the United Kingdom and China. While tax incentives are supportive, they come with a catch and expiration raises some questions of which comes first -- development or emission abatement.
"The IRA begins phasing out either in 2032 or when total greenhouse gas emissions in the power sector decline to at least 75% below 2022 levels--whichever comes last," the Energy Department said.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
