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Offshore Wind Industry in the US Sees Increases in Installation Targets and Project Contracts

published: 2019-12-05 9:30

The offshore wind market in the US is currently experiencing rapid growth. In addition to state governments raising their targets for the installation of offshore wind turbines, wind project developers are also securing an increasing number of contracts for the construction of offshore wind farms. Recently, Phil Murphy, the Governor of New Jersey, signed an executive order that revises the state’s offshore wind energy target from 3.5GW by 2030 to 7.5GW by 2035. This directive indicates that the government of New Jersey has relaunched its offshore wind program to demonstrate a long-term commitment for developing this source of renewable energy.

Like Taiwan, the US has been investing heavily in offshore wind over the recent years. Taiwan’s government currently aims to achieve a cumulative installed capacity of 5.7GW by 2025 and has set an even more ambitious goal of reaching 10GW within a decade. Encouraging developments are also taking place across the Pacific. Many states in the US, particularly those located along the East Coast, are accelerating the deployment of wind energy technologies. Presently, there are more than 10GW of offshore wind projects that are under development on the East Coast. Once built, these wind farms will be making an enormous contribution to the generation of grid electricity for communities across the Atlantic Seaboard.

According to an analysis by the US Department of Energy, the potential generation capacity of offshore wind turbines located along the two coasts of the US can reach a maximum of 2,058GW. Generally speaking, the East Coast has more favorable wind conditions as well as a larger total area where the depth to seabed is less than 50m. With the transition to clean and renewable energies taking place worldwide, building offshore wind farms could speed up the “greening” of grids in states bordering the Atlantic. Major urban centers along the East Coast are especially suitable for adopting offshore wind turbines because this technology overcomes the land availability issue that constrains the deployment of land-based wind turbines and ground-mounted PV systems.

States that have made significant progress in developing offshore wind projects include New York, New Jersey, Virginia, North Carolina, and South Carolina. Massachusetts is not on the list of the top states in terms of market potential for wind energy, but a plan is underway to set up an 800MW wind farm off the island of Martha’s Vineyard.

Working toward a target of 2.4GW for offshore wind by 2030, New York has awarded two contracts, respectively, to Ørsted and Equinor to develop offshore wind projects with a combined generation capacity of 1.7GW. The contract, which were finalized this September, are currently the largest of their kind in the US. Additionally, Dominion Energy, which is a major utility company in the country, announced in the same month that it will be constructing a 2,640MW wind farm off the coast of Virginia. This massive project will be developed in three phases.

Not to be outdone, New Jersey under the leadership of Governor Phil Murphy has made a strong push for the local development of offshore wind. Murphy issued an executive order on November 19 that would see the state’s installed capacity for offshore wind expand to a total of 7.5GW in 2035.

Raising the offshore wind target is part of New Jersey’s two-stage process to fully adopt renewable energies over the long term. The state plans to first have renewables account for 50% of the state’s energy mix by 2030 and then make the complete switch by 2050. Governor Murphy has said that the revised goal of 7.5GW will lead to many benefits such as providing power to around 3.2 million homes in the state, helping to reach the 50% renewable energy target, bringing in billions of dollars in investments, and creating thousands of jobs.

Nonetheless, offshore wind continues to be the costlier option among different renewable solutions. Bloomberg New Energy Finance has reported that excluding subsidies, the cost of offshore wind energy dropped by 64% to US$0.089 per kWh (or about NT$2.71) in the period between 2012 and 2018. That is still more than twice as much compared with the average cost of electricity in New York. The 1,100MW offshore wind contracts that were given to Ørsted by the New Jersey Board of Public Utilities this June set the price per kWh at US$0.0981 (or about NT$2.99), which is three times as much compared with the local average cost of electricity.

 (This article is an English translation of news content provided by EnergyTrend’s media partner TechNews. Photo credit: Aleksandr Zykov via Flickr CC BY 2.0.)

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