This piece was originally published in S&P Global Platts on July 29, 2021.
by Jared Anderson
US offshore wind power development is accelerating, with Avangrid Renewables’ 800-MW Kitty Hawk North project moving into the federal permitting phase July 29, while other companies invest in vessel and turbine manufacturing amid opportunities for bipartisan support for supply chain development, corporate and government officials said.
The US Bureau of Ocean Energy Management, or BOEM, issued a Notice of Intent to prepare an Environmental Impact Study for Kitty Hawk North, the first project within the company’s Kitty Hawk Wind Energy Area, Avangrid said in a statement.
Kitty Hawk North consists of nearly 50,000 acres over 27 miles off the Outer Banks, due east of Corolla, North Carolina, with a capacity of at least 800 MW, and when the entire 122,405-acre Kitty Hawk wind area is developed, it is expected to support a total generation capacity of up to 2,500 MW, the company said.
That announcement came one day after BOEM said July 28 it is publishing a call for information and nominations to determine industry interest in offshore wind power projects in a 141-square-mile area off California’s central coast.
With enough interest from developers, BOEM will conduct an environmental analysis of the new areas as a prelude to competitive leasing. BOEM also said it formally designated the 206.8-square-mile Humboldt Wind Energy Area, 21 miles from the city of Eureka in Northern California, and will now proceed with an environmental review under the National Environmental Policy Act.
“BOEM’s action advancing the federal leasing process for California offshore wind energy projects is another important step in reaching the Biden administration’s goal of deploying 30 GW of offshore wind energy by 2030 and California’s goal of producing 100% of its electricity from carbon-free sources by 2045,” JC Sandberg, chief advocacy officer for the trade group American Clean Power Association, said in a statement July 29.
David Hayes, special assistant to the president for climate policy, called offshore wind a “huge priority for the Biden administration” during a webinar organized by the Bipartisan Policy Center, a Washington-based think tank.
“The last administration was not keen on wind energy, but we are, and we are moving out,” Hayes said.
“The opportunities for economic growth associated with the billions of dollars that will go into this new industry and the new factories that will have to be built in ports that need those jobs and then the upstream supply chain opportunities for the steel and other materials needed … present a tremendous opportunity,” he said.
Bobby Jindal, a former governor of Louisiana, also touted the economic opportunities associated with offshore wind development, comparing the potential state-level economic growth to that which came along with the development of shale gas a decade ago, which created “billions in economic activity.”
States will be competing for secondary downstream investment in areas such as data centers, and other industries will want to locate where there is clean and affordable energy, Jindal said.
The US has shipyards and Jones Act vessels geared toward the production of conventional energy, and Jindal said he hopes those assets can be converted to support the offshore wind industry.
Avangrid Renewables is also developing the 800-MW Vineyard Wind 1 project offshore Massachusetts that appears set to be the nation’s first commercial-scale offshore wind installation, with construction slated to begin this summer.
Asked about what drew Avangrid to the offshore wind industry, Bill White, the company’s head of US offshore wind, said “we are excited because it is American-made energy just off our coast and this resource blows strongly and is almost a baseload resource.”
But he said there were concerns about the cost being too high, with initial projections suggesting it could cost 16 cents/kWh, “and when the Vineyard Wind price came in for a competitive solicitation it was 6.5 cents/kWh [on a levelized cost of electricity basis] and it shocked the world … creating a turning point for the industry.”
Permitting remains a challenge, the panelists said, but the infrastructure legislation making its way through Congress gives new authority for the Department of Energy to be more involved in planning for regional transmission lines that can unlock more renewable energy, Hayes said.
“We as a country have to build things more quickly and at lower cost,” Jindal said, and he recommended assigning a single agency to handle energy infrastructure permitting, along with categorical exclusions from National Environmental Policy Act review for some projects as well as other measures to speed project approval.
“We don’t have to start from scratch on every offshore wind project,” White said.
Hayes said BOEM has committed to completing environmental reviews in two years.
“There are real challenges, this isn’t easy, but there are also opportunities to find bipartisan agreement in a polarized environment,” Jindal said.
