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Researched by Industrial Info Resources (Sugar Land, Texas)--Power developers and operators have reported plans to install more than 6 gigawatts (GW) of offshore wind capacity in the U.S. over the next seven years, according to a recent Today in Energy article from the U.S. Energy Information Administration (EIA). It's notable that the government agency reports only 6 GW by 2029, whereas President Joe Biden has set the goal of having of having 30 GW of U.S. offshore wind by 2030.
Industrial Info is tracking substantially more than 6 GW of planned U.S. offshore wind but classifies many of these projects as having a low probability (0-69%) of moving forward as planned. There are a number of reasons for this, including logistical challenges due to U.S. maritime law and opposition by residents along the coastal areas where the windfarms will be installed. However, some developers have accounted for these hurdles and are taking measures to overcome them, giving them a greater chance of actually being built.
Chief among the projects moving forward is Dominion Energy Incorporated's (NYSE:D) (Richmond, Virginia) Coastal Virginia Offshore Windfarm (CVOW). Offshore wind developers face a few hurdles not experienced by their onshore wind brethren, but Dominion has met these head on.
Among the necessities of offshore wind developers is obtaining a lease from the Bureau of Ocean Energy Management for a site on the U.S. Outer Continental Shelf. These auctions are held periodically and can cost developers lots of money. The first offshore wind auction under the Biden administration was held in February for leases between New York's Long Island and New Jersey, known as the New York Bight. In May, another auction was held for leases off the Carolinas in the Carolina Long Bay area.
The two auctions show what a difference geography can make and the preferences of developers. While the New York Bight auction generated $4.7 billion in winning bids, the Carolina Long Bay auction brought in a substantially lower $315 million. According to Reuters, "Northeastern leases were widely seen as more attractive due to the region's high power prices and state mandates to procure offshore wind power." As an example TotalEnergies SE (NYSE:TTE) (Courbevoie, France) paid $160 million for a lease in the Carolina auction and $795 million for one in the New York Bight auction.
Dominion has been way ahead of the game with its CVOW project, obtaining a lease offshore Virginia in 2013 for $1.6 million. Only one other bidder participated in that auction.
But Dominion also is meeting another challenge that comes from U.S. maritime law. The Jones Act, or Section 27 of the Merchant Marine Act of 1920, mandates that cargos moved between U.S. ports be carried by ships constructed in the U.S., be U.S.-flagged, and be owned and crewed by U.S. citizens and permanent residents. Special wind turbine installation vessels (WTIVs), which have a large deck, legs that allow the vessel to lift out of the water and a crane to put the turbines in place, are needed to install the turbines. The problem? No Jones Act-compliant WTIVs exist in the U.S. at the moment.
But Dominion is solving this with construction of its own $500 million WTIV, the Charybdis, at a shipyard in Brownsville, Texas. The vessel is expected to be ready in 2023 and will be used for the 2.6-GW CVOW project, after which it will be available to charter. Dominion is aiming for completion of the CVOW project in 2026. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for the detailed report.
Dominion employed another strategy for complying with the Jones Act when setting up its 12-megawatt (MW) pilot project for the CVOW. Dominion had its turbine components shipped from Europe to Halifax, Nova Scotia, an origin point free from Jones Act requirements, then transferring them the Virginia site, where they were installed by a foreign-flagged WTIV.
One of the windfarms in development that will employ a similar strategy is Iberdrola SA's (Bilbao, Spain) Vineyard offshore windfarm offshore Massachusetts. Construction is set to begin in 2024 and be completed the following year. Iberdrola plans to install 33 12-MW turbines for a generating capacity of about 400 MW. Subscribers can click here for the project report.
Several European companies, which have substantial experience in offshore wind, are getting in on the action in the U.S. Examples of projects that could be established in the New York Bight by 2029 include Equinor (NYSE:EQNR) (Stavanger, Norway) and BP's (NYSE:BP) (London, England) development of the Empire offshore windfarm 15 miles off the coast of Long Island. The facility would use 54 15-MW turbines for a generating capacity of about 810 MW. It will use U.S.-built tugs and barges to transport components to a WTIV built by Maersk (Copenhagen, Denmark). The project is planned to begin in 2024, with an intended completion in 2026. Subscribers can click here for the detailed report.
Examples of projects that are proposed off the coast of North Carolina include Iberdrola and Avangrid Incorporated's (NYSE:AGR) (Orange, Connecticut) Kitty Hawk offshore wind farm, which will use 69 12-MW turbines for a generating capacity of around 800 MW. Construction is planned to begin in 2025 for completion the following year. Subscribers can click here for the report.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
Industrial Info is tracking substantially more than 6 GW of planned U.S. offshore wind but classifies many of these projects as having a low probability (0-69%) of moving forward as planned. There are a number of reasons for this, including logistical challenges due to U.S. maritime law and opposition by residents along the coastal areas where the windfarms will be installed. However, some developers have accounted for these hurdles and are taking measures to overcome them, giving them a greater chance of actually being built.
Chief among the projects moving forward is Dominion Energy Incorporated's (NYSE:D) (Richmond, Virginia) Coastal Virginia Offshore Windfarm (CVOW). Offshore wind developers face a few hurdles not experienced by their onshore wind brethren, but Dominion has met these head on.
Among the necessities of offshore wind developers is obtaining a lease from the Bureau of Ocean Energy Management for a site on the U.S. Outer Continental Shelf. These auctions are held periodically and can cost developers lots of money. The first offshore wind auction under the Biden administration was held in February for leases between New York's Long Island and New Jersey, known as the New York Bight. In May, another auction was held for leases off the Carolinas in the Carolina Long Bay area.
The two auctions show what a difference geography can make and the preferences of developers. While the New York Bight auction generated $4.7 billion in winning bids, the Carolina Long Bay auction brought in a substantially lower $315 million. According to Reuters, "Northeastern leases were widely seen as more attractive due to the region's high power prices and state mandates to procure offshore wind power." As an example TotalEnergies SE (NYSE:TTE) (Courbevoie, France) paid $160 million for a lease in the Carolina auction and $795 million for one in the New York Bight auction.
Dominion has been way ahead of the game with its CVOW project, obtaining a lease offshore Virginia in 2013 for $1.6 million. Only one other bidder participated in that auction.
But Dominion also is meeting another challenge that comes from U.S. maritime law. The Jones Act, or Section 27 of the Merchant Marine Act of 1920, mandates that cargos moved between U.S. ports be carried by ships constructed in the U.S., be U.S.-flagged, and be owned and crewed by U.S. citizens and permanent residents. Special wind turbine installation vessels (WTIVs), which have a large deck, legs that allow the vessel to lift out of the water and a crane to put the turbines in place, are needed to install the turbines. The problem? No Jones Act-compliant WTIVs exist in the U.S. at the moment.
But Dominion is solving this with construction of its own $500 million WTIV, the Charybdis, at a shipyard in Brownsville, Texas. The vessel is expected to be ready in 2023 and will be used for the 2.6-GW CVOW project, after which it will be available to charter. Dominion is aiming for completion of the CVOW project in 2026. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for the detailed report.
Dominion employed another strategy for complying with the Jones Act when setting up its 12-megawatt (MW) pilot project for the CVOW. Dominion had its turbine components shipped from Europe to Halifax, Nova Scotia, an origin point free from Jones Act requirements, then transferring them the Virginia site, where they were installed by a foreign-flagged WTIV.
One of the windfarms in development that will employ a similar strategy is Iberdrola SA's (Bilbao, Spain) Vineyard offshore windfarm offshore Massachusetts. Construction is set to begin in 2024 and be completed the following year. Iberdrola plans to install 33 12-MW turbines for a generating capacity of about 400 MW. Subscribers can click here for the project report.
Several European companies, which have substantial experience in offshore wind, are getting in on the action in the U.S. Examples of projects that could be established in the New York Bight by 2029 include Equinor (NYSE:EQNR) (Stavanger, Norway) and BP's (NYSE:BP) (London, England) development of the Empire offshore windfarm 15 miles off the coast of Long Island. The facility would use 54 15-MW turbines for a generating capacity of about 810 MW. It will use U.S.-built tugs and barges to transport components to a WTIV built by Maersk (Copenhagen, Denmark). The project is planned to begin in 2024, with an intended completion in 2026. Subscribers can click here for the detailed report.
Examples of projects that are proposed off the coast of North Carolina include Iberdrola and Avangrid Incorporated's (NYSE:AGR) (Orange, Connecticut) Kitty Hawk offshore wind farm, which will use 69 12-MW turbines for a generating capacity of around 800 MW. Construction is planned to begin in 2025 for completion the following year. Subscribers can click here for the report.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
