America's Offshore Wind Capacity Projections Expanding Rapidly, Report Says - gCaptain
America's Offshore Wind Capacity Projections Expanding Rapidly, Report Says
The American Clean Power Association (ACP) has released a new report on the rapidly growing offshore wind market in the United States. The report highlights a pipeline of projects across 32 leases, totaling 51.3 gigawatts (GW) of expected capacity, enough to power over 20 million homes.
Offshore wind development is set to create up to 83,000 jobs by 2030, with industry investment contributing up to $25 billion per year in economic output, according to an earlier ACP report in 2020.
In its latest report, the ACP notes that although the US lags behind China and the UK in terms of installed offshore wind capacity, the increasing number of projects in development signals significant progress in a sector. The report emphasizes the crucial role that individual states are playing in driving offshore wind procurement. Ten states have combined offshore wind targets of over 81 GW, with New York and New Jersey leading the way.
The report comes as the Biden Administration is targeting 30 GW of installed offshore wind capacity by 2030.
“The rapid growth in the U.S. offshore wind pipeline reflects strong federal and state government commitment to clean energy expansion and the industry’s response to those goals,” said John Hensley, ACP’s VP of Research & Analytics. “These projects have the potential to create tens of thousands of jobs, reduce our nation’s dependence on foreign energy, provide coastal cities with reliable clean power, and help the U.S. meet its emissions reduction goals.”
The new report also highlights the economic impact of offshore wind on domestic shipbuilding, with over 30 vessels on order or under construction, and the growing domestic supply chain, with fourteen facilities announced or under construction. Despite these encouraging trends, project costs are rising due to supply chain disruptions, commodity price increases, macroeconomic inflationary pressures, and higher interest rates, the report says.
Hensley noted that addressing these challenges is essential to ensure the long-term economic viability of offshore wind projects.
“A strong, collaborative approach between industry stakeholders and government bodies will help us tackle obstacles – like clarifying permitting processes – and realize the full potential of offshore wind as a key component of our clean energy future,” said Hensley.
Overall, the report underscores the critical role that offshore wind can play in creating a sustainable and clean energy system and, despite the challenges, the industry is stepping up to the plate to invest. Furthermore, the increasing number of projects in development signals significant progress.
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Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.