U.S. Wind – November 2022 Market Report
October saw the first offshore construction activity for a commercial scale U.S. offshore wind farm. Two cable layers have commenced the laying of Vineyard Wind’s export cable. This important milestone was also accompanied by complaints around the deployment of foreign flag workboats to support the cable layers. At the same time, South Fork wind farm has deployed Jones Act compliant vessels to prepare the offshore construction areas for cable laying and foundation installation. These two projects bring into focus the ongoing opportunities and challenges of the U.S. offshore wind market.
The drive to grow the U.S. offshore wind segment into a leading offshore wind market continues. The foundations are firmly in place to support the deployment of 30 GW of offshore wind by 2030 and 110 GW by 2050. Our forecast accounts for close to 70 projects that will install around 74 GW of capacity in this and the next decade and a total 110 GW by 2050. The 74 GW forecast capacity will require capital expenditure amounting to around $225 billion to bring onstream, a recurring annual operations and maintenance spend of around $7.5 billion once delivered, and close to $33 billion of decommissioning expenditure at the end of commercial operations:
- • Two major OCS projects with around 940 MW of capacity have already reached FID, one has commenced offshore construction and the other is preparing for offshore construction.
- • One large OCS project is now close to final permitting and legal objections have been removed to the development of an approved offshore wind pilot project in the Great Lakes. The number of projects that are expected to make a final investment decision within the next 18 months is seven amounting to around 11.4 GW of capacity.
- • A further 16 projects with a capacity of close to 8 GW are expected to make an FID within 18-36 months as well as an additional nine projects for 10 GW in 36-60 months.
- • Longer term, we have identified 35 projects with a total capacity of 43 GW, which support the installation of a cumulative 67 GW by 2035 and over 76 GW by 2040.
11 OCS developments with a potential of over 18 GW are currently undergoing federal permitting review to create the foundation of meeting the 30 GW by 2030 goal. 17.5 GW of project capacity has secured offtake commitments from states. Rhode Island launched the procurement process for 600-1,000 MW in 2023. Longer term, deployment goals by states already amount to over 96 GW, which is beginning to make the White House goal of 110 GW by 2050 look somewhat conservative.
However, the strong foundations for growth in the East Coast bottom-fixed segment have been challenged by supply chain constraints and cost inflation. Two projects, Park City Wind and Commonwealth Wind have announced delays to their commissioning dates of a year and Vineyard Wind and the Commercial Coastal Virginia Offshore Wind project have both reported significantly higher construction costs that originally planned.
To support both state and federal floating wind targets on the West Coast, the auction date for five floating wind leases offshore California has been set for early December. This follows last month’s White House Statement supporting the acceleration of technologies required to deploy 15 GW of floating wind by 2035. The challenge is significant given the sheer scale and scope of floating wind projects - there remain significant supply chain challenges to address, which also present interesting opportunities for companies in an immature segment.
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