This article is republished from The Dialog below a Artistic Commons license.
America’s first large-scale offshore wind farms started sending energy to the Northeast in early 2024, however a wave of wind farm mission cancellations and rising prices have left many individuals with doubts concerning the trade’s future within the US.
A number of huge hitters, together with Ørsted, Equinor, BP, and Avangrid, have canceled contracts or sought to renegotiate them in latest months. Pulling out meant the businesses confronted cancellation penalties starting from $16 million to a number of hundred million {dollars} per mission. It additionally resulted in Siemens Vitality, the world’s largest maker of offshore wind generators, anticipating monetary losses in 2024 of round $2.2 billion.
Altogether, initiatives that had been canceled by the top of 2023 have been anticipated to whole greater than 12 gigawatts of energy, representing greater than half of the capability within the mission pipeline.
So, what occurred, and might the US offshore wind trade recuperate?
I lead the College of Massachusetts Lowell’s Heart for Wind-Vitality Science, Expertise, and Analysis (WindSTAR) and Heart for Vitality Innovation, and observe the trade carefully. The offshore wind trade’s troubles are difficult, but it surely’s removed from lifeless within the US, and a few coverage adjustments might assist it discover firmer footing.
A Cascade of Approval Challenges
Getting offshore wind initiatives permitted and accredited within the US takes years and is fraught with uncertainty for builders, extra so than in Europe or Asia.
Earlier than an organization bids on a US mission, the developer should plan the procurement of the whole wind farm, together with making reservations to buy elements corresponding to generators and cables, development tools, and ships. The bid should even be cost-competitive, so firms generally tend to bid low and never anticipate sudden prices, which provides to monetary uncertainty and danger.
The successful US bidder then purchases an costly ocean lease, costing within the lots of of tens of millions of {dollars}. However it has no proper to construct a wind mission but.
Earlier than beginning to construct, the developer should conduct website assessments to find out what sort of foundations are attainable and determine the dimensions of the mission. The developer should consummate an settlement to promote the facility it produces, determine a degree of interconnection to the facility grid, after which put together a development and operation plan, which is topic to additional environmental assessment. All of that takes about 5 years, and it’s solely the start.
For a mission to maneuver ahead, builders might must safe dozens of permits from native, tribal, state, regional, and federal businesses. The federal Bureau of Ocean Vitality Administration, which has jurisdiction over leasing and administration of the seabed, should seek the advice of with businesses which have regulatory duties over totally different facets within the ocean, such because the armed forces, Environmental Safety Company, and Nationwide Marine Fisheries Service, in addition to teams together with business and leisure fishing, Indigenous teams, delivery, harbor managers, and property house owners.