Strong market growth expected for US offshore wind

US Offshore wind

At the end of last year, there were 42 MW of offshore wind installations in North America, according to the GWEC Global Offshore Wind Report 2022. Although that’s just 0.1% of the global total, things are moving fast and significant growth lies ahead…

The US saw a new record for quarterly long-term offshore wind target growth in Q3 2022: a 58% increase, states the Business Network for Offshore Wind. This is driven by federal policy, state-level actions, and higher than ever investments.

The US offshore wind market is gaining strong momentum in state and federal waters, with a 40 GW pipeline, according to the GWEC Market Intelligence global offshore wind database. Developers expect 18 GW of offshore wind to be online between 2023 and 2029.

According to the US Wind Energy Technologies Office, United States federal waters and the Great Lakes could yield over 4000 GW (13,500 TWh) annually. According to the U.S. Department of Energy Offshore Wind Market Report: 2022 Edition, the U.S. offshore wind energy project development and operational pipeline had reached potential generating capacity of 40,083 megawatts (MW) in May 2022.

This represents an increase of 13.5% over the previous year. To reduce per-megawatt costs, average offshore wind turbine capacity continues to grow.



National initiatives

The US Department of Energy has allocated over $300 million for offshore wind research, development, and demonstration projects, in line with the federal government’s ambitious national offshore wind energy target of 30 gigawatts (GW) by 2030.

This would support power 10 million homes, reduce CO2 emissions by 78m metric tons, and support 77,000 jobs. The Biden-Harris administration's climate plan aims to eventually source 100% of US electricity from renewable sources.

The administration aims to install 15 GW of floating offshore wind capacity by 2035, on top of the planned 30 GW of (mainly bottom-fixed) offshore wind by 2030.

In a recent press release, the White House stated: “Globally, only 0.1 GW of floating offshore wind has been deployed to date, compared with over 50 GW of fixed-bottom offshore wind. America will seize this opportunity to be a frontrunner on floating offshore wind technologies.”

Most assets scheduled to be built in 2023-2029 are European developer initiatives: Avangrid Renewables, BP, CIP, EDPR, Equinor Ørsted, Ocean Wind and Shell. US authorities are making the most of these companies’ experience and project approaches.

State-level initiatives

The regulatory framework for US offshore wind involves federal, state, and local government, and we’re seeing increasing initiatives and collaboration. State-level offshore wind energy procurement activities, policies and initiatives are a key market driver. 23.4% of the currently forecast 18 GW offshore wind capacity will probably be built in New York, and 20.5% in New Jersey.

Massachusetts, which raised its offshore wind target for the second time, to 5.6GW by 2027, should account for 17.7%, and Virginia for 14.4 %. Louisiana announced a 5GW target of installed offshore wind capacity by 2035, and Maryland is expected to house 11.2% of forecast capacity.

Offshore wind energy policies in eight states target the deployment of at least 39,322 MW of offshore wind energy by 2040.



Ambitious pipeline plans

On May 31, 2022, 24 power purchase agreements for offshore wind energy procurement were signed, totalling 17,597 MW in contracts.

The U.S. project pipeline grew with eight new lease areas auctioned in the Atlantic and two Call Areas converted into wind energy areas (WEAs) in California. BOEM, the Bureau of Ocean Energy Management, which manages the offshore wind market in federal waters, auctioned six lease areas in the New York Bight in early 2022.

This auction set records for total revenue generated from a US offshore energy lease auction ($4.37bn). In May 2022, two lease areas in the Carolina Long Bay auction sold for $315m.

BOEM plans to develop WEAs in up to seven U.S. regions by 2025. New offshore WEA lease auctions are scheduled, including the New York Bight, Carolina Long Bay, Central Atlantic, Gulf of Maine, California, Oregon, and the Gulf of Mexico. These areas will boost the number of viable offshore wind energy sites and offer the first commercial lease opportunities for floating offshore projects.

Vineyard: the first large scale offshore wind farm in the US

Vineyard Wind is currently building the first utility-scale offshore wind energy project some 15 miles off the coast of Massachusetts. The 800 MW Vineyard Wind 1 project received BOEM’s final major federal approval in May 2021. This project will generate 800 megawatts of electricity annually, powering over 400,000 homes and businesses, while reducing carbon emissions by over 1.6 million tons per year.

Prysmian Group secured USD 880 million in Vineyard Wind offshore wind cabling projects, and is building a cable plant in the US to develop and build three HVAC 275 kV core cables with XLPE insulation and single-wire armouring. Prysmian plans to build the first US-based offshore wind subsea cable factory in Somerset, Massachusetts and has assigned its cable-laying barge Cable Enterprise to the project The installation campaign of this project recently started and will contunie until early 2023.

“Prysmian is proud to contribute to this important project that will accelerate the United States towards the energy transition,” stated Hakan Ozmen, EVP Projects, Prysmian Group. “Leveraging state-of-the-art technology, large production and installation assets, our cable laying operations are in line with the industry’s regulatory and environmental standards. Across our wide North American footprint, Prysmian plays a key role in the development and upgrade of power grid infrastructures to support the transition to renewable energy sources in the U.S.”

Challenges: delays, staffing and supply chains

GWEC Market Intelligence’s recently updated US offshore outlook contains commission date adjustments for projects originally scheduled to come online in 2024 / 2025, as well as two projects that won the second offshore wind solicitations in Maryland and two that won third solicitations in Massachusetts at the end of 2021. As a result, GWEC believes strong offshore wind growth is likely to take place from 2025, and not 2024 as predicted earlier.

Key hurdles at present are stakeholder opposition and lack of transmission infrastructure. Investing in ports as well as training and education will also be critical to the offshore wind sector. However, the sense of urgency is growing. Not only can offshore wind help reach USA and global climate targets - currently planned expansions could generate 83,000 new jobs and unlock billions of dollars in investment.

Prysmian secures key offshore wind farm projects in the USA

Park City offshore wind farm - This cabling project, worth some $300 million, will connect the 804 MW Park City offshore wind farm to the electricity grid in the state of Connecticut. Delivery and commissioning are scheduled for 2026. The project was awarded by Vineyard Wind, a joint venture between Avangrid Renewables and Copenhagen Infrastructure Partners (CIP).

Prysmian will provide:

  • HVAC 275 kV three-core cables with XLPE insulation and single wire armouring.
  • Cables will be produced in the Group’s centres of excellence Arco Felice, Italy, and Pikkala, Finland, and installed by the Leonardo da Vinci and Ulisse vessels.

Commonwealth Wind cabling project

This Vineyard Wind project will deliver 1,200 MW of offshore wind farm capacity and is worth some $580 million. Delivery and commissioning of the export cables are scheduled for 2027.

Prysmian intends to build a state-of-the-art manufacturing facility for submarine transmission cables at Brayton Point, the site of the former 1,600 MW coal-fired power plant in Somerset.

  • Three export submarine power cable links to connect the Commonwealth Wind to the electricity grid in Massachusetts.
  • HVAC 275 kV three-core cables with XLPE insulation and single-wire armouring.
  • The submarine cables are to be produced in the new plant in Massachusetts (USA), as well as in Arco Felice and Pikkala. Cables will be installed by the Leonardo da Vinci and Ulisse vessels.

Dominion energy: largest ever submarine cable project awarded in USA

Dominion Energy Virginia has awarded a €630m contract to a consortium made up of Prysmian Group and offshore wind industry leader DEME Group. Prysmian is the first cable company in the offshore wind industry to sign a Balance of Plant contract. This includes the complete package for the transportation and installation of the foundations and the substations and the EPCI (Engineering, Procurement, Construction, Installation) services for the inter-array and export cables. The project, expected to be completed by 2026, consists of 176 turbines, capable of supplying clean power to 660,000 households.

Prysmian will provide:

  • Three 3-core 220kV HVAC export cables measuring approximately 62 km each, with XLPE insulation and single-wire armouring, for a total of approximately 560 km.
  • 320 km of 3-core 66kV offshore inter-array cables with XLPE insulation.
  • Export cables will be produced in Arco Felice, Italy, and Pikkala, Finland, while the inter-array cables will be manufactured in Nordenham, Germany.