US needs to 'detangle' ports and transmission from offshore wind generation: Oceantic
Industry group's summary report of its leadership summit highlighted need for cost clarity and containment and focus on industry benefits
States need to "detangle" ancillary infrastructure such as ports and transmission from offshore wind generation to build a more stable industry, a key lesson learned from last year's financial turmoil that battered the sector, according to advocacy group Oceantic Network.
“Forcing developers into distinctly separate infrastructure classes only adds complexity and risk to a project,” the network said in a report where it summarised feedback from industry executives.
It “drives up the overall power price, and prevents realising cost savings that would occur through greater regional collaboration and asset sharing,” the network added.
Much supporting infrastructure such as ports has 60-year lifespans, compared to 20-30 years for offshore wind projects, “offering substantial savings from cost amortisation over a longer period,” the network observed.
Oceantic's report is based on insights gathered from executives who attended its Leadership 100 summit last November as the industry reeled with surging inflation that forced the cancellation of half of contracted capacity.
This raised the paramount need for clarity in costs and pricing to ensure project viability and continued public support.
Pricing formulas failed to “account for the upfront capital costs required to develop an adequate supply chain needed to drive down prices,” the report observed.
“Against the backdrop of increasing project costs and contract terminations, a more realistic view of offshore winds costs and benefits is necessary to maintain public support and ensure investments are made,” the report said.
The network also warned of declining public support for offshore wind as fossil fuel-backed interest groups have blamed it for a rash of whale strandings.
Government and private sector research institutes see no link between offshore wind and whale strandings, instead attribute the marine mammal deaths to rising container vessel traffic and commercial fishing.
The report called for an industry-wide communications strategy to counter misinformation and “reframe the conversation around benefits” of job creation and decarbonisation of the power supply.
“With our first projects putting steel in the water and powering homes and businesses, these benefits will have concrete proof points,” said Sam Salustro, Oceantic's vice president for strategic communications.