Offshore Wind Leaps Forward in 2022, But Key Headwinds Persist

Abstract

Long-term offshore wind energy targets set by states rose 79% in 2022, and investments in the market tripled to $9.8 billion, with about $4.4 billion directed to port infrastructure, supply chain development, and transmission, said the Business Network for Offshore Wind in its 2023 market outlook. Much impetus came after California moved headlong into the market-with the state announcing a new goal last year of 25 GW of offshore wind generation by 2045 and the US Interior Dept. "From surging investments to cutting-edge floating turbine technology on the West Coast, passage of the landmark Inflation Reduction Act, and federal regulatory efforts that bring more certainty to permitting, 2022 kicked the American offshore wind industry into full throttle," said Liz Burdock, the group's CEO. Offshore wind-related contracts in 2022 rose by 36%, with most awarded to U.S. companies, said its report, as the first two commercial-scale projects, Vineyard Wind off Massachusetts and South Fork Wind off New York, are under construction set to deliver 932 MW of generation to the grid, possibly starting by year end. One proposed lease off Lake Charles, La. would have about 1.2GW of capacity, at minimum, with two offshore of Texas near Galveston, projected to geerate between 1.17GW and 1.2GW. Erik Milito, president of National Ocean Industries Association claimed, in a statement, an already "Amazing synergy between offshore oil and gas and offshore wind," stemming from involvement of the former's supply chain in the latter's current infrastructure in some east coast areas. The Business Network points to Inflation Reduction Act funding and incentives, including a 30% investment tax credit, also to spur offshore wind output for other industrial uses that include production of green hydrogen, with one venture announced last year in Louisiana, as well as green ammonia manufacture and carbon sequestration projects, "We are excited to have the offshore wind industry in the Gulf," Louisiana Gov. John Bel Edwards told attendees of a federal-sponsored sector conference on Feb. 23. Georges Sassine, vice president of the New York State Energy Research and Development Authority, said that in seeking to meet a 9GW offshore wind goal by 2035, "We are working to launch a new master planning effort looking at deeper waters more than 60 m that will unlock new areas for New York."Rough Waters AheadBut the Business Network warned that the Biden 30 GW by 2030 goal could be off by 10 GW, according to comments reported in sector publication Recharge. DOE released new analysis that identifies deployment knowledge gaps that must be addressed to successfully connect West coast offshore wind to land grids.