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Offshore wind, one of the fastest growing energy industries in the United States, is poised to play a dramatic role in decarbonizing the US power grid. With proper political and financial capital, energy generated offshore could provide power to both coastal as well as inland areas across the United States to the benefit of local communities and the planet at large. And on top of clean energy and climate advantages, offshore wind can serve as a major engine of post-pandemic economic revitalization and job creation at a time of record unemployment and impending recession. As a clean energy technology with bipartisan support, offshore wind could make heavy gains as part of any potential post-COVID clean energy recovery package.
On July 27, 2020, the Atlantic Council Global Energy Center hosted an engaging panel discussion on the prospect for offshore wind development amid a post-pandemic clean energy recovery. This panel featured Thomas Brostrøm, chief executive officer of Ørsted North America, Karen Douglas, commissioner at the California Energy Commission, David Hayes, executive director of the State Energy and Environmental Impact Center at New York University School of Law, and Hannes Pfeifenberger, principal at The Brattle Group. David Goldwyn, chairman of the Energy Advisory Group at the Atlantic Council Global Energy Center, provided introductory remarks and moderated the discussion.
Offshore wind is one of the fastest growing energy industries in the United States. With federal leasing policies, state-level incentives, and technological development, the cost of offshore wind electricity generation has dropped significantly in recent years. There are currently over 29,000 megawatts (MW) of offshore wind in federal lease areas. Beyond clean energy and climate advantages, the development of offshore wind can also drive post-pandemic economic revitalization and job creation, with the potential to create 83,000 jobs by 2030.
Panelists began the conversation by discussing the outlook for offshore wind in the US energy mix. Brostrøm is very optimistic regarding the global scale and state of offshore wind. He shared that another 10,000 MW of offshore wind is brought online each year, projecting that over 100 gigawatts (GW) will be online by 2030. Offshore wind is growing rapidly as it becomes more reliable, with costs dropping by more than 70 percent in recent years according to Brostrøm. In the United States, the last four to five years have seen explosive growth, leading to a very positive market perspective for the future of offshore wind.
Hayes provided insight into the state-level energy incentives on the East Coast. The case for offshore wind in the Northeast is very compelling given the more limited land base in the region. Further, the outer continental shelf on the East Coast remains shallow for many miles, providing abundant opportunity for conventional offshore wind projects. Douglas spoke to the opportunity for offshore wind development in California, explaining that while the state wants to incorporate offshore wind into its energy mix as part of its ambitious renewable energy goals, there remain several challenges to overcome. First, the state is not endowed with shallow continental shelves like the East Coast, with no possibility for fixed bottom technology. On California’s northern coast, where the state’s best offshore wind resources are located, very little transmission infrastructure is currently installed. On California’s central coast, where transmission infrastructure is best developed, they face significant obstacles in working around the Department of Defense and the US military.
Panelists emphasized the importance of transmission infrastructure in unlocking offshore wind potential. Pfeifenberger discussed the state of transmission throughout the country. He asserted that the first wave of offshore wind projects can be easily accommodated and integrated into the existing power grid, with sufficient interconnection points and retired power plants already built near the shore. However, permitting for new transmission will pose a significant obstacle. Pfeifenberger explained that transmission line permitting is much more difficult than pipeline permitting, and the grid will not be able to easily accommodate further injections of offshore power beyond current commitments without major onshore upgrades. Hayes pointed to the lack of legal structure for siting onshore transmission, calling upon the Federal Energy Regulatory Commission to be more aggressive in driving the planning process.
To conclude, panelists answered questions from an engaged audience related to the role of unions and the environmental impacts of offshore wind. Representing Ørsted North America, a major private wind developer, Brostrøm emphasized that his company welcomes union labor and has maintained a strong dialogue with unions; many of the industries that offshore wind development will rely on, such as construction and manufacturing, are traditional union jobs. Douglas noted that there is strong union interest in offshore wind in California, and that state leadership will look to the East Coast states that are coming to market ahead of them to learn from their experiences.
Hayes then addressed the impact of offshore wind turbines on migratory birds and fisheries. He explained that offshore wind developments have environmental consequences like any other large energy project and emphasized the importance of the federal government in fleshing out environmental impact statements and evaluating and mitigating such impacts as necessary. Hayes also raised concerns about the new National Environmental Policy Act (NEPA) regulations that remove cumulative and indirect impact assessments to streamline infrastructure projects. However, at the same time he also recommended that the NEPA process highlight the important role of offshore wind development in the clean energy transition.
A conversation with
Chief Executive Officer
Ørsted North America, Offshore Wind
California Energy Commission
State Energy and Environmental Impact Center, New York University School of Law;
Former Deputy Secretary and Chief Operating Officer
US Department of the Interior
The Brattle Group
Chairman, Energy Advisory Group
Atlantic Council Global Energy Center