The White House is on to something big
This is a big deal. The White House just had a Summit on Offshore Wind. They’ve never had a summit before on offshore wind. Most Americans haven’t even heard of offshore wind, or know that it is now here in the United States.
With steel in the water, the President is paying attention. We’re headed to international climate change negotiations next month and what’s exciting is that for the U.S., the road to Paris includes a stop in Rhode Island.
I just shared thoughts about this with the industry in Europe, where they’ve had offshore wind for 25 years and are a generation ahead of us. They know that we are going to be thinking about offshore wind now in a way that we weren’t before.
What just happened: Construction started on Deepwater Wind’s first five turbines off Block Island, Rhode Island. US Wind completed site surveys for a major 500-megawatt project off the coast of Ocean City, Maryland, slated for 2020. And a major European player, DONG Energy, has entered the U.S. market by taking over a Massachusetts lease that could generate over 1,000 MW.
The White House Summit gathered leading federal, state, and industry stakeholders committed to the long-term and sustainable development of offshore wind in the U.S. Looking around the room, one official said: “We will look back in 10 years and think that this is where it all started.”
The White House announced three new initiatives:
- An Interagency Working Group on offshore wind to ensure better coordination among close to a dozen Federal agencies.
- A multi-state effort by New York, Maine, Massachusetts, and Rhode Island, funded by the federal Department of Energy, to achieve economies of scale and establish a regional supply chain. “We need gigawatts, rather than megawatts,” was the theme.
- An International Offshore Wind Regulators Forum with the United Kingdom, Denmark, and Germany to share lessons learned and jumpstart innovation on our shores, both regulatory and technological.
What’s going to happen: BOEM just announced it will auction leases in the New Jersey Wind Energy Area this November; that’s over 300,000 acres and could support 3,400 MW of generation. BOEM finished environmental review of the North Carolina Wind Energy Areas, opening the door to leasing there. And significant progress is being made on identifying areas for lease off South Carolina and New York.
Challenges: As with any new industry, challenges in developing offshore wind in the United States are to be expected:
- The price of offshore wind will need to decline to enable expanded deployment.
- Permitting timelines must accelerate.
- Stronger market demand signals are needed from state legislators, utility regulators and others.
The cost equation is more complicated than it looks. Even with historically low prices for natural gas and land-based wind, niches with high wholesale power prices remain along the East Coast in particular. Given the bottlenecks and congestion on power lines, the high capacity value of offshore wind compared to land-based wind, its hedge value relative to natural gas, and policy support all can help close the price gap.
The big picture: The U.S. is making progress on the President’s climate agenda through the announcement of the Clean Power Plan, which will reduce carbon dioxide emissions by 32 percent from 2005 levels by 2030. Joint statements with Brazil and China are also lending momentum. It is now clear that 2015 is the year that offshore wind development became part of the President’s climate agenda.
What AWEA is doing: At this historic time, the American Wind Energy Association is organizing all segments of the offshore wind industry, including developers and the supply chain, to reach decision-makers. Political capital developed during the rapid growth of the land-based industry will help. Members of the AWEA Offshore Wind Committee are leading and getting special services from the association. We’d love for you to join us.