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Developments in the USA offshore wind energy market

USA offshore wind energy market

Developments in the USA offshore wind energy market

Across the USA 35,324 MW of wind projects are currently in various stages of development, up from 28,521 MW in 2019.


Although the US offshore wind industry started later than in Europe and China, it seems set for rapid growth, with investments hitting a record $35 billion in the first half of 2020. Lower offshore wind prices, federal actions, and state-level commitments have resulted 24% growth of the U.S. offshore wind pipeline over the past year, according to the National Renewable Energy Laboratory Offshore (NREL) Wind Database 2020. Drivers for market development include increasing turbine capacity, and pricing developments. Increased interest in using offshore wind to produce clean hydrogen will also drive development.

Improving pricing is also proving vital to energy uptake. For fixed-bottom offshore wind energy installations, LCOE - the cost per unit of energy of generating electricity during an assumed project design life - is now below $95/ MWh (megawatt-hour). LCOE for projects that began commercial operations in 2020 represents a 16% average reduction compared to NREL reporting in 2019. LCOE of floating offshore wind projects have halved since the first pilot project and is set to reduce further. Floating offshore wind LCOE is predicted to decline from approximately $160/MWh in 2020 to $60‒$105/MWh in 2030, according to the Offshore Wind Market Report Executive Summary: 2021 Edition.

Average turbine rotor diameters now exceed 150 meters and turbine capacities have surpassed 7.5 MW. According to the US Office of Energy Efficiency & Renewable Energy, the average hub height for offshore turbines in the United States is projected to increase to about 150 metres (500 feet) by 2035. These taller offshore turbine towers capture more energy, as winds are stronger at greater altitudes, and ever-increasing rotor diameters mean more electricity is produced per turbine. Deploying taller towers and larger rotors offshore helps reduce the cost of financing, transmission, and grid balancing.

Improving pricing is also proving vital to energy uptake. For fixed-bottom offshore wind energy installations, LCOE - the cost per unit of energy of generating electricity during an assumed project design life - is now below $95/ MWh (megawatt-hour). LCOE for projects that began commercial operations in 2020 represents a 16% average reduction compared to NREL reporting in 2019. LCOE of floating offshore wind projects have halved since the first pilot project and is set to reduce further. Floating offshore wind LCOE is predicted to decline from approximately $160/MWh in 2020 to $60‒$105/MWh in 2030, according to the Offshore Wind Market Report Executive Summary: 2021 Edition.

First-ever national offshore wind energy goal

Market fundamentals combined with state and federal actions are expected to accelerate the energy industry’s transition and convergence. A 20 GW pipeline of projects is under development or announced and state mandates should result in a 30 GW offshore wind energy market by 2035.

The Biden Administration has introduced a first-ever national offshore wind energy goal of 30 GW by 2030. State-level procurement targets in the Northeast and mid-Atlantic are helping the market to expand. Projects in the advanced permitting and approval phases exceeds 11 GW. A national target of 30 GW of offshore wind energy by 2030, set in March 2021, should help the market keep growing. Individual states are also introducing plans to develop domestic supply chains which should help shape the industry and further lower costs. Offshore wind may also help realise state decarbonizing targets.

Vineyard Vineyard project

The 35,324 MW US offshore wind energy pipeline is made up of two operating projects: the Block Island Wind Farm (30 MW) and the Coastal Virginia Offshore Wind (CVOW) pilot project (12 MW). In addition, the 800 MW Vineyard Wind project has received full approval as well as all permits, a power sales contract, and a grid interconnection agreement. The array will include 84 wind turbines that can power some 400,000 homes. A submarine power cable will run 55 km from the Vineyard and Nantucket to Covell Beach in Centerville in Barnstable on Cape Cod, where it will connect to the electrical grid.

Prysmian Group will design, manufacture, install and commission an HVAC (High Voltage Alternating Current) cable system composed of two 220 kV three-core cables utilising extruded XLPE insulation. The project requires a total of 134 km of power cables. The submarine cables will be produced in Prysmian Group’s centres of excellence for the production of submarine cables in Pikkala, Finland, and Arco Felice, Italy. Installation operations will be performed by Prysmian Group’s state-of-the-art cable laying vessels Cable Enterprise and Ulisse. Delivery and commissioning are scheduled for Q4 2023. Prysmian will also provide PRY-CAM permanent monitoring solutions.

Prysmian has also secured the 2.6 GW Coastal Virginia Offshore Wind (CVOW) project. The contract has been awarded by Dominion Energy Virginia to the consortium made up of Prysmian and DEME Group for the complete Balance of Plant (BoP) scope package. This includes transportation and installation of the foundations and substations as well as the EPCI (Engineering, Procurement, Construction, Installation) services for the inter-array and export cables. The total value of the contract is approximately €1.6 billion, of which around €630 million is related to Prysmian for the cable supply and the installation works under its responsibility. This is the largest project ever awarded in USA and includes the supply of 880 km of inter-array and export cables for the future largest commercial offshore windfarm in the United Stateslocated some 27 miles (43 km) off the coast of Virginia Beach. Prysmian Group will provide three 3-core 220kV HVAC export cables measuring approximately 62 km each, with XLPE insulation and single-wire armouring, for a total of approximately 560 km. The Company will also supply 320 km of 3-core 66kV offshore inter-array cables with XLPE insulation. The CVOW project is crucial to helping the Commonwealth of Virginia meet its goal of becoming carbon neutral by 2045. The offshore wind farm, made up of a total of 176 turbines, will be capable of supplying clean power to as many as 660,000 households.

Growth set to continue

As some 80% of Americans live within 200 miles of the coast, offshore wind power is generated relatively close to consumers. In coming years, offshore wind energy is likely to expand from the North Atlantic into other regions. States have established nearly 40,000 MW of offshore wind procurement targets and 2000 GW of offshore wind resources remain to be exploited!

Growth set to continue
Average turbine hub height, rotor diameter, and nameplate capacity for land-based wind projects from the Land-Based Wind Market Report: 2021 Edition
US Office of Energy Efficiency & Renewable Energy

U.S. project pipeline by state

U.S. project pipeline by state
US Office of Energy Efficiency & Renewable Energy