Earlier this month, I attended the US Offshore Wind 2018 conference put on by New Energy Update.  It is fair to say that the conference was well attended.  In fact, the attendance was the first statistic given.  In the welcoming remarks, it was noted that three years ago the conference drew 150 attendees.  In 2018, there were nearly 1,000. 

The increase in attendance reflects the increase in enthusiasm for the US offshore wind market as it enters a new phase – one in which large-scale procurements are being awarded.  Just two weeks before the conference, Massachusetts awarded an 800MW procurement to Vineyard Wind and Rhode Island awarded 400MW to Deepwater Wind (which built the first and still only US wind farm, also in Rhode Island waters). 

The 1,200MW that were awarded on the same day, May 23, signals the start of a true US offshore wind supply chain.  Numerous speakers at the conference cited 2GW per year as the threshold that the US must reach to have a viable industry with a healthy supply chain.  SCW’s analysis of the numbers shows that based on currently announced procurement schedules by the states, a minimum of 2GW is well within reach (see figure below). 

OFW procurement graph Jun 2018

Note that the graph above drops below 2GW for 2020 and 2021.  The graph, however, only shows announced procurements.  2020 and 2021 are shown at 1,600MW per year based on these data.  New procurements are expected to be announced in 2019 by Massachusetts, Virginia and other states that should have no problem pushing the total above the 2GW mark. 

Today, we will note some of the comments made by speakers at the conference to get a feel for health of the market.  In future articles, we will discuss topics such as floating wind technology and highlight some of the developments that may be of particular interest to the cable industry. 

Stephen Pike, CEO, MassCEC: “Events like this [conference] are critical to driving the growth of offshore wind in the United States.  For those of you who have been in the game for a while, there hasn’t been quite the optimism and sense of opportunity that there is today.  I think that sense of optimism and opportunity is extremely well place when you think about the circumstances that we are presented with today. 

At the federal level, we have a Department of Interior and the Bureau of Ocean Energy Management that are extremely bullish on offshore wind.  Maryland has granted OREC contracts for 368MW of offshore wind.  New Jersey has set a very aggressive target of 3,500MW by 2030.  New York has set a goal of 2,400MW within that same timeframe and I know they have plans to solicit 800MW by the end of the calendar year.  Connecticut is reviewing proposals for up to 250MW.  On May 23, Rhode Island awarded a 400MW contract and Massachusetts 800MW.  And I know here in our state, that this truly is just the beginning.  By law, the state has to go out for another solicitation with next 12 months.

Two to three years ago, it would have been really, really hard to imagine being where we are today.” 

Jonathan Cole, Managing Director - Offshore, Iberdrola Renewables: “To be able to successfully execute the Vineyard Wind project made us an early mover in the US offshore wind market.  We will be operating in the water with power by 2021 and fully operational by 2022.  That is probably faster than anyone imaged.  For sure there will be come gains from that because a lot of this industry relies on scale.  So having economies of scale, having the relationships that we will build up will give us an advantage.  It will also supply a big advantage to the supply chain.  The Tier 1 suppliers that come with us on this journey will themselves obtain a significant advantage in gaining the benefits of the economy of scale.  The important thing for suppliers is that Vineyard Wind should not be seen as a project, but as the kick-start of an industry.  It will be a platform for growth for decades to come.”

John B. Lavelle, CEO, Offshore Wind, GE Renewable Energy: “There is a market in offshore wind in the US with good fundamentals, but it requires market makers to bring it to reality.  What you need for sustained capex investment is year-on-year stability that people can predict so that they can make big investments. 

What is needed for sustained growth is 2-3GW per year.  Because that amount is enough to provide two suppliers about 100 units a year, it gives enough volume to support the whole supply chain -- from tug boats to cable landings.  I would encourage everyone in this room to get behind that message.”

Stephen Bull, SVP Wind and CCS Business, Equinor: “There are many trends that are pushing costs for offshore wind down, including globalization and digitalization.  On the global level, India recently is opening up, so there is potential there.  Australia, Korea, Taiwan, China -- we’re looking at lots of different areas across the world.  As that globalization occurs, it drives the volumes we need reach the economies of scale that we need to drive more innovation.  On digitalization, there is an important element here.  We can use new digital technologies to do more preventive maintenance and reduce the need to get people out on the turbines, especially floating turbines or fixed turbines in harsh sea conditions.  And we are looking at the solutions that will come with that.