U.S. offshore wind development falters in 2023 but is projected catch up in the next 10 years
Energize Weekly, July 17, 2024
Offshore wind development in the U.S. suffered setbacks in 2023 with projects being cancelled and less than half of the 30-gigawatt (GW) target set by the Biden administration forecast to be deployed by 2030, according to two analyses.
About a third of the 7.2 GW of capacity that had been on the books have been cancelled in the last few months, with Danish multinational Orsted scrapping two projects off the New Jersey coast, a U.S. Energy Information Administration (EIA) analysis said.
Orsted abandoned the Ocean Wind 1 and 2 projects in New Jersey, citing rising interest rates, high inflation, and supply chain delays.
“We are extremely disappointed to have to take this decision, particularly because New Jersey is poised to be a U.S. and global hub for offshore wind energy,” David Hardy, CEO of Americas Orsted, said in announcing the decision last October.
The remaining 4.8 GW of projects are in various stages of development from Massachusetts to Virginia, according to the EIA. The South Fork Wind Farm, off the New York coast, began generating electricity last December, and the Massachusetts Vineyard 1 project went online in June.
The slowing of offshore wind development will lead to about 14 GW of capacity being deployed by 2030, short of the Biden administration goal of 30 GW, according to a report by the American Clean Power Association (ACP), a trade group.
ACP, however, sees the industry catching up with 7.6 GW in operation by 2027, the 30-GW target reached in 2033 and 50 GW online by 2035.
“After the successful start-up of the 132-MW South Fork wind farm earlier this year, and with 136 MW operational at Vineyard Wind, offshore wind is gaining momentum with three projects under construction and thirty-seven more in development,” Frank Macchiarola, the ACP’s chief policy officer, said in a statement.
However, while the South Fork project began generating electricity more than six months ago, it still has not reach commercial operations. “It is not unusual for electric generators to produce energy while they conduct tests for weeks or months ahead of the facility being placed into commercial operation,” the EIA said.
Only 10 of a projected 62 turbines are operational at the Vineyard 1 project. The developer, Avangrid, said it would have the remainder of the turbines operating and online by this fall.
“With 10 turbines now in operation, Avangrid is delivering enough clean energy to power more than 60,000 homes and businesses in Massachusetts,” Pedro Azagra, Avangrid CEO, said in a statement.
In May, two projects started building foundations to support offshore wind turbines. At the 704-megawatt (MW) Revolution Wind project off the Rhode Island coast, Orsted and Eversource began constructing the vertical cylinders, called monopiles, to support turbines.
Dominion Energy also built the first monopile in May for its 1,265-MW Coastal Virginia Offshore Wind (CVOW) commercial project. Dominion started in 2021 with a 12-MW pilot project.
Revolution Wind is forecast to be in operation in the fall of 2025, and Dominion Energy said it will start the CVOW project in early 2027
“Although these projects have started foundational work, Revolution Wind and CVOW Commercial Project still show as pending regulatory approvals and not yet in construction because generators have latitude to decide when to label a project as in construction,” the EIA said.
Maryland and Ohio projects, which developers still report as active, have faced some setbacks. In January, Orsted withdrew from commitments to the Maryland Public Service Commission to construct the Skipjack 1 and 2 projects, with a total of 966 MW.
The company, however, said it is continuing with advanced development and permitting. “As we explore the best path forward for Skipjack Wind, we anticipate several opportunities and will evaluate each as it becomes available,” Orsted’s Hardy said in a statement.
In December, the Lake Erie Energy Development Corp. (LEEDCo), the developer of the 20-MW Icebreaker Wind project eight miles off Cleveland’s Lake Erie coast, halted the project faced with rising costs and a loss of funding.
“This pause is necessitated by a confluence of adverse circumstances and numerous delays resulting in a financial climate where the project’s commercial viability is in question,” Will Friedman, a LEEDCo board member and CEO of the Port of Cleveland, said in a statement in December.
