Last week, America’s first offshore wind farm, a 30-megawatt project situated off the coast of Block Island, Rhode Island, began to deliver electricity into the New England Power grid. Proponents of the industry hope the pilot will jump-start a thriving U.S. industry in the coming years.
The $300-million, five-turbine wind farm, developed by Deepwater Wind, will supply the bulk of the power used by Block Island, and end its reliance on diesel generation. In a statement, Deepwater Wind CEO Jeff Grybowski said he was confident the project will be the first in a series of larger, utility-scale wind farms that will employ thousands of workers up and down the East Coast, and send abundant, low-carbon power into the region’s power grid. Deepwater Wind is reportedly planning larger offshore wind projects some 15 to 25 miles from the coast to serve multiple states, including New York, Maryland, Massachusetts, Rhode Island, and New Jersey.
Studies show the region is well-situated for ocean-based wind power, given the existence of powerful coastal air currents along the U.S. coastlines, which, if harnessed, could produce enormous quantities of clean power for U.S. residents and industry. According to the U.S. Energy Department, offshore wind has the potential to produce 2,000 gigawatts of power per year, nearly double the nation’s annual energy use. This means that even if only 1% of the technical potential is recovered, ocean-based wind could power nearly 6.5 million homes, according to the agency.
In recent years, offshore wind-industry representatives, federal agencies and policymakers in the Northeast have been engaged in efforts to promote an ocean-based industry along the Eastern Seaboard, in the hopes that a robust, domestic offshore wind sector could transform the region’s energy economy and help to achieve multiple public-policy goals, such as: helping states meet their renewable-energy and pollution reduction goals; creating high-paying jobs that cannot be outsourced; and, through economies of scale, lowering electricity rates, which are among the highest in the nation.
But the industry lags far behind Europe, long the leader in offshore wind, where ocean-based turbines have been producing power since 1999. As of the end of 2015, there were more than 11 gigawatts of installed wind-generation capacity operating in the waters of 82 countries, according to the European Wind Energy Association.
Under the Obama administration, the federal government has engaged in a number of actions to promote offshore wind and collaborate with the states. The administration has funded a multi-state effort with Maine, Massachusetts, Rhode Island and New York to create a regional roadmap on offshore wind, aimed at large-scale deployment of ocean-based turbines and development of a supply-chain with high-paying jobs. By the end of 2015, the U.S. Department of the Interior had awarded 11 commercial leases for offshore wind development in the Atlantic Ocean that could support a total of 14.6 gigawatts of capacity, according to the U.S. Department of Energy’s 2016 National Offshore Wind Strategy Report. The Obama administration estimates that by 2030, offshore wind farms along the U.S. coastlines, in the Gulf of Mexico and the Great Lakes will be supplying 22 gigawatts of electricity annually, enough to power 4.5 million homes.
The agency cites a number of potential benefits to states and the electricity system from ocean-based wind. Along many regions of the coastline, winds blowing offshore tend to be strong at times of peak power demand, which could help lower wholesale electricity prices in many markets, and also provide a hedge against fossil-fuel price volatility. The development of utility-scale offshore wind projects could potentially serve as a replacement for baseload power supplied by aging nuclear power plants set to retire in the coming years, and help states meet their clean-energy mandates. It could also decrease transmission congestion and reduce the need for new, land-based long-distance transmission.
Nevertheless, cost continues to be a deterrent here. Currently, offshore wind is still too expensive to compete in most U.S. electricity markets without subsidies. In Rhode Island, power supplied to residents from the Block Island Wind Farm will cost $1.07 a month more than their current rates, or 24.4 cents per kilowatt-hour, and increase by 3.5% annually for 20 years. However, the Department of Energy was optimistic that as the industry establishes itself and develops economies of scale, it could vie with other forms of generation within the next ten years.
An encouraging example is the industry’s experience in Europe, which has benefited from significant cost reductions as ocean-based wind power and its supply chain have grown and matured. Between 2010 and 2014, the levelized cost of energy from offshore wind projects installed in the United Kingdom dropped by 11%, according to the Department of Energy report. (The levelized cost of energy is a commonly used metric for the cost of electricity produced by a power generator over the life of a project, and generally takes into account capital expenditures, operating and maintenance costs, cost of capital, and the expected annual energy production of an offshore wind farm. It is different from the price of energy in a power purchase agreement).
A study released last March by the University of Delaware’s Special Initiative on Offshore Wind found that in Massachusetts, where several ocean-based wind projects have been proposed in recent years, a commitment to produce 2,000 megawatts of offshore wind power, combined with ongoing industry and technological advances, would lower the cost of the energy source by 55% below previous projections. The study also says that offshore wind has the potential to produce all of the electricity used by northeastern states – a resource far greater than onshore wind or solar.
Developing a Regional Ocean-Energy Economy
The promise of harnessing an abundant source of carbon-free power that could spur an entire new industry has led officials in a number of states to devised policies to attract developers to the region.
Earlier this year, Massachusetts Gov. Charlie Baker signed a bill requiring utilities to procure 1,600 megawatts of electricity from offshore wind in a little over ten years, enough energy to power half a million homes.
In New York, which has a mandate to produce 50% of its energy from clean sources by 2030, the administration of Gov. Andrew Cuomo is developing an Offshore Wind Master Plan, expected to be released next year. The state is studying a 16,740-square-mile area of the ocean, from the south shore of Long Island and New York City to the continental shelf break, for potential future sites for offshore wind, according to a report released earlier this year. The report found that offshore breezes along the state’s Atlantic coastline could produce enough electricity to power 15 million homes.
A study released last year from University of Delaware researchers found that New York State could take a number of steps, independently or with other states, that could lower costs for offshore wind power as much as 50 percent. Among the companies investing in the industry there is Statoil, which last week provided the winning bid in the federal government’s online lease sale of more than 79,000 acres some 14 to 30 miles off the New York coast. The lease grants the company the rights to explore the potential development of an offshore wind farm to supply power to New York City and Long Island. In a press release, Statoil said the area could potentially accommodate turbines producing up to 1 gigawatt of power.
One of the key findings in the University of Delaware study was that using larger, more efficient turbines, along with other technology and supply-chain advances, could help reduce the high cost of construction, which has been a major impediment to the industry’s establishment here.
Lowering costs has been a chief goal of researchers at the University of Maine’s Advanced Structures and Composite Center. For more than a decade, they have been developing floating turbines that can operate in waters more than 150 feet deep, harness the powerful winds in the Gulf of Maine, and be built for a fraction of the expense of a conventional turbine. The Gulf of Maine is considered to have the best offshore wind resource in North America, where strong, consistent winds have the potential to produce 156 gigawatts of power. (For the sake of comparison, consider that a nuclear power plant generates roughly 1 gigawatt of energy.)
Last May, their efforts received an important boost from the Department of Energy, which awarded $43.7 million toward an offshore wind project they are spearheading, known as New England Aqua Ventus 1. Along with two project partners, Emera Inc. and Cianbro Corporation, the consortium plans to build a 12-megawatt floating offshore wind farm in 2018 using proprietary turbine technology patented by the University of Maine. The turbines were specifically devised to float in Maine’s deep waters without the need to be tethered to the sea floor, and utilize technology that could reduce the cost of hull construction by 50%, according to Habib Dagher, director of the University of Maine Advanced Structures and Composites Center, during a presentation at the CSG/ERC Annual Meeting last August. Developers hope the demonstration project will lead to the creation of a much larger, utility-scale wind farm further offshore, and help comply with the goals set out in the Maine Ocean Energy Act of 2010, which calls for developing 300 megawatts of ocean-based wind by 2020, and 5 gigawatts by 2030.
In the long-term, Dagher envisions a day in the future when utility-scale turbines in the Gulf of Maine churn out more than enough electricity to heat all of Maine’s homes, and power the entire vehicle fleet. Currently, 70% of residents heat their homes with heating oil, at an average cost of $4,000 annually, and a typical household spends another $5,000 on gasoline to run their cars and trucks. All of that money – some $6 billion annually — flows out of state, said Dagher. Creating large-scale ocean-based wind farms would lead to economies of scale that could dramatically lower the cost of power, making it far more economical for residents to transition to electricity for heat and to electric vehicles for transportation. As an added benefit, the money spent on energy would stay in the state, he said.
“Our goal is to not just create electricity with offshore wind,” said Dagher. “Our goal is to fill up the vehicles and heat the homes.”