Offshore contracting body hopes to mitigate risks with new standards regime
Offshore contracting body hopes to mitigate risks with new standards regime | Windpower Monthly
Offshore contracting body the International Marine Contracting Association (IMCA) has published a transport and installation contract aimed at promoting sustainable contracting in offshore development including wind farms.
The document, which the IMCA will encourage offshore developers to sign, encourages a more “realistic” allocation of risk proportionate to the relative rewards, making sure insurance is of sufficient scope, and avoiding duplicate risk assumptions in an effort to avoid potential disputes and make the process fairer for the parties involved.
Iain Grainger, CEO at the IMCA, pointed out that action was needed to prevent more delays or cancellations for offshore wind projects as seen in the UK and US recently.
“It’s not hyperbole to suggest that net zero targets around the globe are at risk if offshore wind projects continue to be delayed and cancelled,” he said. “With widespread adoption, [the contract] can become the foundation for a fairer and more sustainable approach in offshore wind.”
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.