Offshore Wind Brings Positive Spin

US East, West Coasts Plan Massive Projects By 2030

By Gary Burrows
U.S. coastal state governments, investors and ports and terminals are gearing up for an expected boom in offshore wind energy topping 25 gigawatts by the end of the decade.

“It’s such a very exciting time to be in the marketplace,” said Dan Shreve, head of global wind energy research for Wood Mackenzie, and moderator of a panel on U.S. offshore wind prospects, during the Breakbulk Americas Digital Special on Nov. 4.

Referencing Wood Mackenzie’s U.S. Offshore Wind Market Outlook 2020-2029 released earlier this year, Shreve said the research consultancy predicts the industry to deliver 25 gigawatts of offshore wind capacity by 2029. About 9 gigawatts, or GW, have already been contracted or will soon be approved, and an addition 6 GW will be solicited through 2022.

“State renewable portfolio standard carve outs is what’s driving the market today,” he said. “We’re seeing a fantastic 34 GW of potential demand with additional upside opportunity.

Under three scenarios – base, bull and bear – growth through 2029 ranges from 14.5 GW to 33.8 GW, according to Wood Mackenzie.

The U.S. lease program supports about 20 GW to 30 GW, depending on turbine density, he said, with areas supporting as much as 45 GW under consideration for future leasing.

“The federal lease programs are struggling to keep up because the demand has been so great,” Shreve said. “But at this point of time, the market looks tremendous through the 2030 time horizon.”

Target lease areas for offshore wind develop could bring 2 million acres to be auctioned off by 2022 to support 37 GW of offshore wind, according to Wood Mackenzie. That comprises the Gulf of Maine (5 GW potential), New York Bight (11.5 GW), California (9 GW), North Carolina (5.5 GW) and South Carolina (6 GW).
States of Enthusiasm

Much of the U.S. offshore wind focus continues to be centered on the East Coast, from the Mid-Atlantic northward.

“The common thread is that it was a little bit slow to get started, but once you saw the market leaders start the ball moving, there were a lot of fast followers,” Shreve said.

East Coast development has been largely state-centric, with “each state really trying to outdo one another, in an effort to attract supply chain investment, port infrastructure improvements, economic development, as well as greening their regional power grids,” he added.

Among state projections, New York is projecting to have 9 GW by 2035; followed by neighbor New Jersey at 7.5 GW; Virginia, 5.2 GW (by 2034); Maine at 5 GW (by 2030); Massachusetts, 3.2 GW (by 2035); Connecticut, 2.3 GW (by 2030) and Maryland, 1.6 GW (by 2030). Rhode Island and North Carolina have been more limited, and South Carolina is believed to be pursuing potential offshore wind development.

Shreve did note that there has been recent news of collaboration across states, such as Maryland, North Carolina and Virginia. “It’s not something we’ve seen before … coordinating activities to take advantage of the opportunities that are being present.”

Conversely, the U.S. West Coast has been slower to develop, for myriad reasons, he said. First, there are the deeper coastal waters, compared with the East Coast’s rather shallow continental shelf. Additional barriers include the U.S. Department of Defense, fisheries and other environmental barriers.

The robust forecast through 2022 is important, as it is the first year the federal tax credit for wind power development begins to sunset under a five-year walk back in the amount of credit.
Ports Development

One important aspect of the development of U.S. offshore wind energy is for states and participating companies to develop the port infrastructure and U.S.-flag fleets to service the installation and ongoing operation and maintenance of offshore windmills.

With the drive from individual states to develop independent programs, and benefit from local content, there is likely to be redundancy in terminals and infrastructure, webinar panelists agree. There is potential for states to cooperate and develop regional hubs.

John O’Keeffe, head of marine affairs North America, Ørsted Energy, anticipates existing port and terminal development should be up operational by 2024-25.

“I look on the optimistic side,” he said. “For a developer, the glass is always half-full. We’re seeing an incredible amount of action by states, though they’re not going about it in the same way; there’s a mix of strategies in how to get the ports up and running over the next several years,” O’Keeffe said.

However, he did acknowledge the need for a “multiport solution”. “No one port is going to solve the East Coast puzzle,” he said, recommending hubs along the coast. While there is “an incredible amount of activity, we’ll need it to ramp up significantly.”

“How fast can you get it done, get the infrastructure in place to get this market teed off,” Shreve asked.

Ørsted was responsible for the first U.S. offshore wind farm, Block Island, a small 30 megawatt project in Rhode Island, operational since 2016. The company has installed about 6.8 GW of capacity and has another 3.1 GW under construction, comprising 26 offshore wind farms with more than 1,500 turbines turning.

U.S. development benefits with lessons learned from offshore wind development in the European Union, in terms of setting up infrastructure and being able to efficiently handle marshalling, installation and operations and maintenance, he said. “Some lessons translate into being able to leapfrog in certain circumstances … the ability of ports to handle large loads is terribly important and gives the U.S. a leg up in some circumstances.”

Blue Water Shipping has done its homework. Brent Patterson, regional director, said since completing the first-ever offshore wind farm, Butendiek, a 288 megawatt wind farm in the North Sea. Since then, the transport and logistics provider has been project manager for more than 300 projects, transported more than 4 GW of wind components, and handled more than 13 GW through its port services and facilities.

Patterson said that Blue Water, through its Compass Wind IT system, which integrates with clients’ systems, provides a single-platform management system that can cover the entire wind energy supply chain.

“We contribute by managing the data, fragmenting or defragmenting the scope of the different providers, and ensuring that we can contribute to the project’s overall commercial and schedule-driven goals,” he said.

“From a port perspective, this is a huge opportunity,” said Russell Williams, director of business development, Tradepoint Atlantic. “There’s a high-level need for logistics providers, terminal management and heavy-lift companies.” He added that Tradepoint also has considerable experience, including handling such large components.

There are myriad landside components to a wind hub’s infrastructure, said Jonathan Zier, manager, business development - offshore services, Crowley. The hub would comprise a foundation and wind turbine component marshalling yard, operations and maintenance facilities, warehousing, rail infrastructure, trucking, facilities for feeder and assist vessels, and an operations center.

Crowley feels it is well situated to serve the U.S. offshore wind industry.

“We take a cradle-to-grave approach in offshore wind,” Zier said of Crowley, which operates more than 200 vessels and is the largest U.S. Jones Act vessel provider.
Cabotage Component

One way in which the U.S. market must strike a different direction than how offshore wind developed in the EU, is the cabotage requirements placed upon domestic vessel operations.

The U.S. Jones Act, made part of the U.S. Merchant Marine Act in 1920, stipulates that only U.S. owned and operated ships, staffed with U.S. crews, can carry cargo between U.S. ports.

Crowley “has been in the business before the Jones Act was enacted,” Zier said. Further, the Florida-based carrier has long been involved in offshore oil and gas drilling and operations for about 53 years. The company is also the largest employer of U.S. mariners.

There is belief that, at least initially with U.S. offshore wind development, that some European service vessels will have to be allowed to operate in U.S. waters until the domestic market can develop enough U.S.-flagged vessels to cover the market.

Further, terminal operation along the upper East Coast would likely include union labor, the International Longshoremen’s Association. Zier noted that European carriers might have some complications in work with union labor.

Zier said Crowley is confident that it will be able to quickly fill the niche, between building additional vessels, and through modification of existing vessels.

Vessel types needed include dynamically positioned, or DP, support vessels, DP floating feeder vessels, crew transport vessels, offshore support barges, DP articulated tug-and-barge (ATB) units, cable laying barges, conventionally towed feeder barges, DP jack-up vessels, DP tugs and anchor-handling tugs, Zier detailed.

DP is mandatory for safe and reliable offshore handling and installation operations, he said. As opposed to conventional jack-up vessels, as are used for offshore installation, the DP ATB produces little motion in higher seas, and may be converted from existing Crowley setups.

“We will work with OEMs (original equipment manufacturers) to finalize designs to meet their needs,” he said.

The sheer size and complexity would give some potential vessel competitors pause. The monopiles, Zier said, weight about 2,000 tons each. Crowley’s conversion vessels would be able to haul two or three monopiles at a time. An average installation would cover about one monopile per day.

Crowley’s conversion approach is expected to be less capital-intensive than building new jack-up assets; and it would be available in the market sooner.

However the vessel services are provided, it won’t be cheap. Ørsted’s O’Keeffe emphasized that building offshore vessel capacity won’t happen without further project certainty. “It’s hard to convince for that kind of capex towards these projects without project certainty,” he said.

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