US: 110GW offshore goal faces friendly fire

• US Department of Energy sets strategy to reach 110GW offshore by 2050
• Goal for US offshore wind LCOE to fall from $73/MWh to $51/MWh by 2030
• However, the US military is raising concerns about upcoming lease areas

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The Biden administration has charted a route to grow offshore wind in US waters to over 110GW by 2050. But this goal faces one little-discussed threat: friendly fire.

On 29^th March, the US Department of Energy released a 94-page strategy document, called ‘Advancing Offshore Wind Energy in the United States’, where it set out its priorities to achieve 30GW installed capacity by 2030 and 110GW by 2050. It is also looking to establish the floating offshore wind sector with 15GW installed by 2035.

This highlighted some of the main challenges for the offshore wind industry, including many that will look familiar to established offshore developers. These include the need to cut the levelised cost of energy from offshore wind farms, including floating projects; support for the supply chain to ensure the sector invests locally in manufacturing and job creation; and how it can support the development of a reliable offshore transmission grid.

But there was one risk that merited only passing mentions: the potential impact of the US military on planned projects. The words ‘military’, ‘defense’, ‘army’ and ‘navy’ only featured four times in the strategy’s main text, and 13 if you include the appendices.

And yet, on 17^th April, the Department of Energy got a taste of how big a problem its formidable military could pose to the growth of offshore wind. Bloomberg reported that four of the six areas where the Bureau of Ocean Energy Management is planning to auction offshore wind capacity are seen as “problematic” by the Department of Defense, due to potential impacts on military operations. This is around one quarter of the available area.

Military manoeuvres

Now let’s keep this in perspective. The presence of military operations does not need to be fatal to offshore wind in the US, any more than the British Navy does in the UK. Governments around the world have always had to balance conflicting demands on the use of their territorial waters, including from fishing, the military and trade.

One of the most high-profile disputes in recent years was in Sweden, where Vattenfall and Wallenstam were forced to scrap plans for the 300MW Taggen offshore project in 2019 after the navy objected. But this threat appears to have receded in recent years, and last month the Swedish Energy Agency issued a plea for “constructive dialogue”.

In fact, the main risk we see in the US isn’t that the military will exercise a veto on the country’s emerging offshore wind sector. The biggest threat we see is that the 110GW target by 2050 is huge, and will require the Department of Energy to make the best use it can of its seabed estate. Conflicts between the departments can only become more likely as BOEM tenders sites for future rounds of offshore wind development.

On top of that, there is a risk that this delays the process of approving offshore wind farms at a time when the Biden administration is looking to accelerate. The 30GW by 2030 goal already looks ambitious given the extended development cycles of offshore projects, and developers and investors do not have time to lose to arguments between government departments.

Companies will want certainty ahead of a 2024 presidential election that looks like being a re-run of the Biden-Trump race of four years ago. There is a risk that offshore wind, and clean energy more widely, could be painted as being in opposition to national security. Offshore wind does not need more of the delays that characterised the later years of Trump's rule.

For their part, the departments and BOEM have played down talk of battles. They say that consultation between the departments was already underway, and argue that the collaborative process has so far resulted in 27 successful leases of seabed land off the US coast.

Four priorities

Offshore wind in the US continues to evolve. BOEM closed consultation on 25^th April about how to build offshore wind in the Gulf of Mexico, and started consultation about the future of offshore wind in the Gulf of Maine on 26^th April. We have also seen recent announcements of sizeable offshore wind targets in states including Maryland; and the US is also getting ready to see first power exported from the 800MW Vineyard Wind 1.

Meanwhile, the four strands of the DoE’s strategy announced on 29^th April make a lot of sense. The department split them into four themes:

-   Near-Term Offshore Wind (NOW): This sets goals to reduce the levelised cost of offshore wind from fixed projects from $73/MWh in 2021 to $51/MWh in 2030; to publish roadmaps that support the development of a supply chain that could meet its 30GW goal, backed by federal funding; and to keep engaging with the many conflicting views on these projects, including the Department of Defense.

-   Floating Offshore Wind Research & Development (FORWARD): This sets goals to cut the levelised cost of floating wind from $150/MWh now to $45/MWh by 2035; to support the development of a robust floating wind supply chain; and to enable the rollout of larger turbines to bring economies of scale.

-   Transmission Solutions (CONNECT): This programme, which is one of two in the strategy without an acronym, is focused on developing an offshore grid that is reliable, secure and able to cope with growing volumes of offshore wind. This will involve working with federal and state agencies to identify transmission priorities.

-   Expanding Offshore Wind Co-Generation (TRANSFORM): This programme takes a longer-term view with a focus on how to pair offshore wind in US waters with power-to-X technologies, including the production of green hydrogen and other green fuels. This is primarily focused on demonstration projects.

There are still plenty of obstacles for the growth of offshore wind in the US – not least the interventions of the military – but these are sensible plans that should reassure the sector that the government knows the challenges it is facing.