It’s no secret that the past few months have been challenging for the wind energy industry, especially when it comes to offshore projects. Major developers have been trying to renegotiate power purchase agreements (PPAs) signed years ago, delaying work on some projects and walking away from others, despite severe financial repercussions in some cases. In addition, only one of the three offshore areas available in the first US Gulf of Mexico wind energy lease auction attracted any bids. It all represents a major setback to the Biden administration’s goal of making the nation’s electricity 100 percent carbon-free by 2035. In today’s RBN blog, we look at the major challenges facing wind power developers, what they mean for projects. currently under development and some changes that could help bring more renewable energy online.
Over the past two years we’ve written a lot about how the ongoing energy transition will not be a straight line leading directly to abundant, carbon-free energy and a net zero world. The increased deployment of electric vehicles (EVs)large-scale development carbon capture projectsand the creation of a flourish clean hydrogen industry all are considered important elements in a cleaner energy economy with significant long-term potential, but each faces its own headwinds to widespread adoption and long-term growth. For the sea wind, the melody is almost the same, even if some of the notes are slightly different.
On the plus side, offshore wind development in the United States has been growing at a rapid pace in recent years. The project pipeline (see Figure 1 below) was 52,687 megawatts (MW) as of May 31, 2023, according to the Department of Energy’s (DOE) annual offshore wind market report, up 15% than the previous year. In addition, the first two commercial-scale offshore wind farms in the US, Vineyard Wind 1 and South Fork Wind, achieved major milestones this year. Vineyard Wind 1, which is located about 15 miles south of Martha’s Vineyard in Massachusetts, completed the installation of its offshore substation in July and its first turbine was shipped to its location in early September. The project is expected to start generating power in October. (Vineyard 1 is a 50/50 partnership of Copenhagen Infrastructure Partners and Avangrid Renewables.) Construction on the South Fork Wind Farm, located between Martha’s Vineyard and the eastern tip of New York’s Long Island, began in 2022 and is wait for it to start operating. before the end of 2023. (South Fork is a 50/50 partnership of Ørsted and Eversource.)
Figure 1. US offshore wind pipeline by classification status as of May 31, 2023.
Source: Offshore Wind Market Report
