There has been a major development in the U.S. offshore wind industry that could impact the demand for submarine power cable and possibly fiber optic cable as well. 

Ørsted, a Danish energy company and a global leader in offshore wind development, announced on October 8 that it would acquire Deepwater Wind and create the leading U.S. offshore wind platform.  The combined assets of the two companies can deliver clean energy to seven states on the U.S. East Coast from Massachusetts to Virginia. 

From a cable perspective, the geography of these assets is very important.  Therefore, the following lists the U.S. portfolios of the two companies. 

Deepwater Wind, the leading US offshore wind developer, has built an attractive and geographically diverse portfolio of projects along the US East Coast. Deepwater Wind’s portfolio has a total potential capacity of approximately 3.3GW comprising:

  • Block Island (30MW), the only operational offshore wind farm in the US
  • Three offshore wind development projects in Rhode Island, Connecticut, Maryland and New York totaling 810MW of capacity with long-term revenue contracts in place or pending finalization.
  • Approximately 2.5GW of offshore wind development potential across three well-sited BOEM lease areas in Massachusetts and Delaware. Of these 2.5GW, 1.2GW is developed through an equal joint venture with PSEG, a leading New Jersey utility.

Ørsted’s current US offshore wind portfolio has a total capacity of approx. 5.5GW comprising:

  • Development rights for up to 2GW at the Bay State Wind site off the coast of Massachusetts owned in a joint venture with Eversource.
  • Development rights for up to 3.5GW at the Ocean Wind site off the coast of New Jersey.
  • In Virginia, Ørsted will be constructing two 6MW wind turbine positions for phase one of Dominion Energy’s Coastal Virginia Offshore Wind Project. Ørsted has exclusive rights with Dominion Energy to discuss the potential development of up to 2GW of offshore wind capacity.

This situation could lead to some interesting developments on the submarine cable side.  There has been a debate in recent months over who should build the cable networks serving groups of offshore wind farms that are located close together.  This occurs off Rhode Island/Massachusetts and off New York/New Jersey, where there are clusters of wind energy areas (WEAs). 

The debate is between the offshore wind developers, who want to build and control the cable assets to their own wind farms, and third party developers who want to build cable networks serving all of the wind farms in the clusters.  While the Ørsted/Deepwater Wind deal will not end this debate, the consolidation of a number of these WEAs under a single owner (Ørsted) will almost certainly impact how these networks are built.

So far, we have been talking about the submarine power cable networks.  Where submarine fiber fits in is an interesting concept that has yet to be determined.  Since early in the development of offshore wind, fibers have been included in the composite (power/fiber) cable serving the wind farms.  There have been some recent indications, however, of a trend towards dedicated, high-fiber-count submarine fiber optic cables to serve some of the European offshore wind farms.  While new European farms are generally much larger in scale than in the nascent U.S. market, it is a trend to watch.  With Ørsted bringing its European expertise and strong financial support to the U.S. market, it will be interesting to see if this trend develops further. 

SCW will continue to track major developments in the U.S. offshore wind as this market matures.  SCW estimates that approximately 1,000 kilometers of submarine power cable will be require by this first phase of offshore wind deployment through 2022.  In the past year, however, the U.S. offshore wind market has accelerated beyond expectations.  With recent developments in New York, New Jersey and Virginia, as well as on the West Coast led by California, this number could increase quickly.