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What it will take for the U.S. offshore wind energy market to set sail

A new research initiative in New York could help make the cost dynamics for corporate buyers more attractive.

In 2010, Google described its foray into offshore wind energy in a blog post outlining its investment in a transmission project that aimed to ferry electricity from wind turbines via undersea cables to light up cities along the mid-Atlantic coast, from New Jersey to Virginia. Google knew it was early to an offshore wind energy market that didn't exist, and believed it could help build one.

Eight years later, there's only one offshore wind farm in the United States, the 30-megawatt Block Island Wind Farm off Rhode Island that started delivering electricity in December 2016. That's a tiny fraction of the more than 2,000 megawatts that could be developed with current technology around the country, according to the U.S. Department of Energy (DOE).

Transmission, of course, isn't the only building block for this new energy market that's slowly taking shape. Significant technical hurdles for installing and operating windmills off deep coastal waters must be solved to really kickstart a construction boom and make the costs low enough to make offshore wind attractive to corporate energy buyers and power companies.

"We're technology-agnostic, but not cost-agnostic; these deals need to make sense financially, and that is a key driver in evaluating a project," said Neha Palmer, head of energy strategy for Google, when asked about the company's plans in owning offshore wind farms or singing power purchase agreements for offshore wind energy. Google, which remains an investor in the transmission project, holds about 3 gigawatts of contracts to buy renewable energy, most of which are onshore wind, from around the world.

These deals need to make sense financially, and that is a key driver in evaluating a project.
Now a new research group, led by the New York State Energy Research and Development Authority (NYSERDA), will tackle some of the biggest technical challenges. The project will tackle basic research and technology development in several areas, such as characterizing seabed conditions and designing foundations for wind turbines.

The consortium is getting $18.5 million, plus $2 million designated for federal labs, from the U.S. Department of Energy for the effort. It will need to raise $20.5 million in matching funds, line up partners from research institutions to industry players, and deliver results in four years. The DOE, which announced the award last month, is still negotiating the project roadmap, performance metrics and other details with NYSERDA and plans to complete that this fall, said Alana Duerr, who leads the offshore wind work within the Wind Energy Technologies Office at the DOE.

Doreen Harris, director of large-scale renewables at NYSERDA, said the agency is looking for lessons from Europe, where the United Kingdom, Germany and other countries collectively lead the world in offshore wind energy production.

The consortium will include Carbon Trust, a renewable energy consulting group in London that has run a similar R&D effort in Europe. Other partners announced so far for the U.S. initiative include London-based Renewables Consulting Group and Stony Brook University's Advanced Energy Technology and Research Center on Long Island in New York. Harris will line up other participants, particularly those from the wind industry.

"One of the key focuses is to accelerate the pace of cost reduction and arrive at scale," she said.

Calculations by the National Renewable Energy Laboratory (NREL) showed that the average cost of building and operating an offshore wind farm (with fixed foundation) over its lifetime was 18.1 cents per kilowatt-hour in 2016, without factoring in government subsidies, according to a report (PDF) by the lab. The national goal is to hit 9.3 cents per kWh by 2030, Duerr said.

For comparison, the same report showed that the average cost for land-based wind energy had dropped to 5 cents per kWh.

NYSERDA's consortium will work on understanding the offshore environment and figuring out the optimal equipment designs and wind farm layout for building and maintaining windmills in the sea, Duerr said. It also will map out the infrastructure and supply chain, such as the ports, ship and manufacturing centers, that will support construction and maintenance activities, she added.

The coastal waters of the United States don't share the same meteorological or oceanographic conditions as those in Europe's North Sea, a popular spot for wind farms. For example, strong wind blows consistently in the North Sea, but the wind farm operators don't have to deal with hurricanes, Duerr said. That's not the case for the East Coast or the Gulf of Mexico in the United States.

"We have some extreme conditions that we have to contend with," she said. "Hurricane modeling is incredibly complicated."

The depth of waters where strong wind blows also varies significantly in the United States, compared with in Europe. Wind farms built in the near term likely will use fixed foundations that are mounted on the seafloor, and those projects will be more common along the East Coast, Duerr said.

On the West Coast, the seabed drops off quickly just a few miles from shore, creating deep water conditions where floating foundations with anchoring lines would be more feasible. Floating foundations are still rare. The first floating wind farm in the world came online in Scotland just last year, noted Stephanie McClelland, who leads the Special Initiative on Offshore Wind at the University of Delaware.

"The reason California, Oregon, Washington and Hawaii are a step behind is because we need to use floating foundations there. There's no shallow seabed in the continental shelf," said McClelland from Oregon, where she was attending a meeting on offshore wind earlier this month. The federal government has yet to hold lease auctions on the West Coast.

Overall, the United States likely will see 60 percent of its wind farms in deep water and the remaining in shallow water, Duerr said.

The DOE awarded the competitive bid to NYSERDA at a time when New York and other Northeastern states recently had announced policies to boost offshore wind development. In January, New York Gov. Andrew Cuomo said the state would aim to get 2.4 GW of electricity from offshore wind farms by 2030. Earlier this month, he announced that NYSERDA will ask for bids for 800 MW of offshore wind contracts starting in the fourth quarter of 2018.

In May, Massachusetts awarded a contract to Iberdrola's Avangrid Renewables and Copenhagen Infrastructure Partners to build a 800-MW project. The two developers expect to bring the project online by 2021, a timeline that some analysts considered short and challenging given there isn't a well-run infrastructure in the country to support construction at this point.

Massachusetts, which will require its utilities to buy 1.6 GW of offshore wind (there's no time frame on that, though), is also home of the first failed offshore wind farm project. Cape Wind, proposed in 2001 as a $2.6 billion project off Cape Cod and Martha's Vineyard, died last year after facing lawsuits from local residents and losing contracts to sell power to utilities.

Rhode Island recently picked Deepwater Wind, which operates the only offshore wind farm in the country, to build a 600-MW project off the state’s coast.  

Offshore wind supporters say these new state mandates will be instrumental in finally bringing online a major source of renewable energy to take away the need to build more fossil fuel power plants.

"There's tremendous interest by large offshore wind players on the East Coast. It's coming," McClelland said.

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