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The US Near-Term Offshore Wind Pipeline
The US offshore wind market is sure to take off sooner rather than later. A constellation of projects are in advanced development. This blog summarizes the projects mostly likely to be built over the next few years and when they are likely to be commissioned.
Small Ones First
The next wind plants to be installed are two relatively small demonstration projects, expected to be installed in 2021. Each has approved funding from the US Department of Energy (DOE). The first is the 12 MW Aqua Ventus in Maine, which will test offshore floating foundation designs thanks largely to $40 million in DOE funding. DOE funds will also accelerate the 21 MW Icebreaker offshore wind plant. The project envisions building six wind turbines roughly 8 miles off the coast of Cleveland, Ohio with construction beginning as soon as 2021. DOE funds were allocated partly to advance understanding and deployment of foundationsthat are prone to freezing over in the freshwater Great Lakes.
Two wind projects off the Maryland coast are expected to be among the first large-scale offshore wind plants. The Skipjack Wind farm, developed by Denmark-based Ørsted, is the first large-scale project to be commissioned in the near term, likely by the end of 2023. It reached a notable milestone in July 2019, announcing a multi-million dollar staging area in the Port of Baltimore.
This project may turn out to be the first offshore wind plant globally to use GE’s new 12 MW Haliade-X offshore wind turbine, currently in pre-commercial development. Ørsted announced in September that it chose GE as preferred turbine supplier for Skipjack and a much larger Ocean Wind (1,100 MW) off the coast of New Jersey.
The second is US Wind Maryland, developed by Renexia S.p.A., a subsidiary of Italy-based Toto Holding Group. It would be 268 MW and deploy up to 32 wind turbines. Both wind plants won subsidies from a competitive contract auction in Maryland that will pay each wind plant $132/MWh.
The 800 MW Vineyard Wind will likely be one of the first large-scale projects in Massachusetts, but it has been delayed by at least a year due to the federal government postponing approval of its final environmental impact statement (EIS). There are suspicions of politics at play, with allegations that the administration manufactured a delay. Its commissioning is now likely pushed from 2022 to 2023. Nonetheless, it will be one of the first large projects off US waters. The project won an offtake payment of $65/MWh in a competitive power contract auction. Avangrid Renewables and Copenhagen Infrastructure Partners are developing the project. MHI Vestas is the preferred turbine supplier.
The next large project likely to be built in coming years will be Equinor’s (formerly Statoil) Empire Wind 816 MW project off Long Island, New York. This project is notable due to the record $42.5 million the developer was willing to spend to secure the ocean lease site.
The largest wind power contract awarded in the US goes to the 1,100 MW Ocean Wind project by Ørsted. Securing this contract was helped along by Ørsted’s market entry strategy in 2018 of acquiring US offshore wind developer Deepwater Wind. Ørsted offered a first-year price of $98.10/MWh with the actual cost paid by ratepayers, estimated to be $46.46/MWh after energy and capacity revenue are refunded to ratepayers.
Changes may occur to the likelihood of these projects coming to fruition, and other projects may join the near-term development cycle.