Wind

Right 'enabling actions' in US offshore wind could spark $9bn-a-year economic boon: NREL

Washington could help industry avoid coming industrial and infrastructural bottlenecks amid surging global market demand with planned approach as regional play develops

Artists rendering of the first US-built WTIV -- the $500m Charybdis
Artists rendering of the first US-built WTIV -- the $500m CharybdisFoto: Recharge
  • Tim Ferry
The US is on track to reach the Biden administration’s goal of 30GW of offshore wind plant by 2030 , but will require massive investment in manufacturing, vessels and port infrastructure to generate promised jobs and economic benefits, as well as lessening risk of industrial shortages as the sector ramps up in key global markets, according to a new report.

The study, led by the National Renewable Energy Laboratory (NREL), calculated that to meet the end-of-decade target would require 2,100 turbines and foundations, 11,000km (6,800 miles) of cabling, 5-6 installation vessels, 10 feeder barges, four cable-lay vessels, and an average annual workforce of between 12,300-49,000.

Developing the industrial base to meet these needs could generate between $2.2bn-$8.8bn in annual economic growth through to 2030, according the report, published by National Offshore Wind Research & Development Consortium in tandem with NREL and other government and industry bodies.

“Understanding the demand for resources that are needed to reach the 30GW target can help the industry strategically plan how to develop a domestic supply chain,” said Matt Shields, senior offshore wind analyst at NREL. “We will be able to build off of the critical needs that we identify in this report to characterise realistic pathways and enabling actions.”

Principal deputy assistant secretary for renewable energy Kelly Speakes-Backman added: “This collaborative study among DOE, NREL, states, and wind industry partners shows that we have significant opportunities to scale the development of a nascent offshore wind industry in the US and greatly expand domestic manufacturing.”

The US will remain dependent largely on European suppliers for the next few years until home-grown supply chain capacity matures, the report authors conceded, but cautioned against overreliance on foreign capabilities amid surging global demand.

“It is unlikely that international suppliers will have sufficient throughput to support the construction of both European and US offshore wind energy projects,” the report states. “If a domestic supply chain is not developed in time, bottlenecks in the global supply chain will present a significant risk to achieving the national offshore wind energy target.”

While urging action, the report acknowledged the uncertainty surrounding supply chain investment for offshore wind projects that often still retain permitting risk, noting an “unclear” return on investment, as well as state-by-state competition for investment that results in “compartmentalised and suboptimal development of the supply chain”.

The Biden administration has offered strong support for the industry, ranging from national targets to incentives in offshore wind leases to promote US-sourced components, while states on the eastern seaboard typically include localisation mandates in offtake tenders, and the report identifies 11 announced major industrial investments.
Siemens-Gamesa last year pledged a $200m blade finishing factory at the Portsmouth Marine Terminal in the Port of Virginia to service Dominion Energy’s 2.6GW Coastal Virginia Offshore Wind project, while nacelle assembly is planned for the New Jersey Wind Port and an offshore substation is being built in Texas.
“The US offshore wind industry has achieved significant milestones in the past year and has a promising future ahead. This report clearly shows that we can leverage existing US businesses to build offshore wind along the country’s coastlines,” said Ross Gould, vice president of supply chain development at the Business Network for Offshore Wind and one of the report’s authors.
Of these manufacturing facilities, however, only one, Nexans’ export-cable making plant in South Carolina, is actually operational, and many of the investments are years away from completion.
The lack of port capacity to meet the industry’s needs could also stymie growth, and of 22 ports on the East Coast assessed, the study found that most were too small, had overhead obstructions, or were otherwise not ideal for the use of wind turbine installation vessels (WTIV). On the other hand, while the industry will need at least five US-flagged WTIV by 2025, it will almost certainly have only one, the $500m Charybdis being built in Texas, negating the need for deep channels and port entrances.

The Jones Act requires that only US-flagged vessels can be used to tranship any good from point-to-point within the US – and an offshore wind turbine meets the requirement for being a ‘point’, so regardless of port capacity, the US will likely need to transport components to foreign-flagged WTIV stationed at sea via US-built feeder barges, of which the US already has a reasonable supply.

Some components would be harder to in-source than others, the study observes. Rare earths are vital ingredients of permanent magnets deployed in the majority of offshore turbines, but US has only negligible rare earths processing capacity and will continue to rely on Chinese sources. The US steel industry is also hampered by lack of automation and scale, and would be hard-pressed to provide steel in sufficient quantity and strength to meet the industry’s needs.
The New York State Energy Research and Development Authority (Nyserda) recently exempted its round 3 offshore wind procurement from state law mandating US-sourced steel in state-sponsored infrastructure projects, citing “unreasonable” costs and uncertain supply to meet New York’s 9GW by 2035 goals. Nyserda is among the sponsors of this report.
Yet New York continues to hold pole position in developing the offshore wind supply chain, and governor Kathy Hochul announced $500m investment into state-based capacity in her January State of the State address.

Doreen Harris, president and CEO of Nyserda, said: “Offshore wind is poised to be a launch pad that will usher in the clean energy economy of the future in New York and the US, and growing the supply chain is a critical cornerstone of that work.”

The new report is the first of a two-part project delving into the challenges of developing a domestic offshore wind sector, with the lead-off study focusing on higher level analysis of ‘tier-1’ components, such as nacelles and blades, while the follow-up, to be released this summer, will offer a more granular look the entire supply chain.

(Copyright)
Published 28 March 2022, 22:54Updated 28 March 2022, 22:56
NYSERDANRELDOEBNOWDominion Energy