Episode 37: Offshore Wind Energy with Benj Sykes (Orsted) and Liz Burdock (Business Network for Offshore Wind)

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*Updated* Episode Intro Notes

Offshore wind energy market updates

• The U.S. Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy states that, driven by falling offshore wind prices, federal action, and state-level commitments, the U.S. offshore wind projects in development grew 24% in 2020, with a little over 35,000 megawatts (MW). 

• To put this into context, a little over 35,000 MW has the capacity to power around 11.7 million houses in the U.S. for a year.

• However, when compared to other clean energy sources, the American Clean Power Association found that offshore wind only represents 13% of the clean energy capacity currently in the pipeline. Meanwhile, onshore wind represents 23% and solar takes the cake at 54%, with battery storage at 9% (don’t forget about episode 57 on energy storage).

• Interestingly, average rotor diameters (i.e., the blades) have increased over time, now exceeding 150 meters (over 1.5 football fields!), and capacities exceeding 7.5 MW of production per day. 

  • Speaking of large systems, A New York Times article from early 2021 highlighted a new test model for a new series of giant offshore wind turbines planned by General Electric. “Giant” is being modest - with a diameter longer than two American football fields, a single one of these giants will be able to produce each day 13 MW of power, which is enough to power over 4,000 homes.

  • Check out DOE’s 2021 Offshore Wind Market Report which we’ll link to in the updated show notes. It has great data on the offshore wind market, including the status of all projects within the pipeline that we mentioned.

• We have a new administration in the White House since this episode originally aired in November 2018. In Biden’s first week in office, his Administration announced a 30,000 megawatts-by-2030 national offshore wind energy goal. This is a considerable and ambitious goal since as of today, the U.S. only has about 30 MW of utility-scale offshore wind production.

  • 30,000 MW of wind energy would be enough power to meet the demand of more than 10 million American homes for a year, and avoid 78 million metric tons of CO2 emissions, equivalent to taking 17 million cars off the road for a year.

  • Further, the administration projects that meeting this target will trigger more than $12 billion per year in capital investment in projects, create tens of thousands of good-paying, union jobs, with more than 44,000 workers employed in offshore wind by 2030 and nearly 33,000 additional jobs in communities supported by offshore wind activity. 

• So, where does the existing 30 MW of utility-scale offshore wind production come from? The Block Island Wind development, America’s first offshore wind farm in Rhode Island that was completed in 2016. That is set to change in a big way.

  • The country’s first commercial offshore wind farm, Vineyard Wind, located off the Massachusetts island of Martha’s Vineyard, received federal approval in May of 2021 and started construction in November. It will have a capacity of 800 MW once complete in 2023.

  • More evidence of the coming growth is that 15 projects in the U.S. offshore pipeline have reached the permitting phase, and eight states have set offshore wind energy procurement goals.

  • Note one issue here is making sure that the onshore grid can handle all this new energy. We’ll need to invest in our energy grid (which really should be the focus of a future episode). So that’s something to watch too.

Trends

Global Growth

• Globally, the offshore wind energy industry installed more than 5,000 megawatts (MW) of capacity just in 2020 alone. For reference, total global offshore wind capacity at the end of 2020 reached 34,400 MW, which means global offshore wind installations in 2020 represented 16% of the total installed by the end of 2020.

• This growth can be attributed to a little over 2,000 MW of new deployments in the Chinese market, followed by 1,503 MW commissioned in the Netherlands, 714 MW in the United Kingdom, 706 MW in Belgium, 315 MW in Germany, and 107 MW divided among the rest of the world.

  • The largest offshore wind farm in the world, the two Hornsea sites in England, came online since our last episode. Collectively, the two sites produce enough power for 2.3 million UK homes.

• The little more than 5,000 megawatts of offshore wind installed in 2020 is far from what’s needed. The International Energy Agency said earlier in 2021 that 80,000 MW of offshore wind will need to be added globally each year by 2030 to set the world on course for reaching net zero emissions by 2050. Put another way, we’re only at 6% of what’s needed!

Support

• According to a national survey conducted by Public Opinion Strategies in 2020, more than 80% of the nation’s voters, regardless of political party and demographic, favored adding more offshore wind to America’s energy portfolio. Interestingly, this same study states that a majority of voters say wind energy will be more important to the economy in 10 years than oil and natural gas. 

  • Not sure I believe that, but glad some folks do!

• To our surprise, support for offshore wind is not solely found in coastal states, with those in the South (90%) and the Midwest (89%) viewing it most favorably. Perhaps because they don’t have to look at big turbines out on the water?

• When Congress passed its second stimulus package in late 2020, it included wind and solar tax credit extensions, and added the first US offshore wind tax credit. This tax credit gives offshore wind projects for the first time a 30% investment tax credit (ITC) for projects that began construction starting Jan. 1, 2017 through Dec. 31, 2025.

Cost

• Globally, according to that same DOE report we mentioned at the top of the show, the average levelized cost of energy (measures lifetime costs divided by energy production) of fixed-bottom offshore wind energy installations is now below $95/megawatt-hour (MWh) which represents a reduction of 16% on average compared to reporting in 2019.

potential pushback

Conservationists + Environmental Impact

• There has been some recent pushback as seen in the news highlighting potential environmental impacts that offshore wind energy can have on coastal ecosystems.

  • Some studies have found that the introduction of offshore wind plants can increase noise levels, escalate collisions risk, change habitats, and alter food webs.

• However, the Bureau of Ocean Energy Management recently found in its assessment of offshore wind energy leasing activities off the coast of New York Bight that they will have “no significant impact” to the environment.

  • If you also hadn’t heard of the Bight, it’s a geological formation near the New York and New Jersey border near the mouth of the Hudson River.

• Additionally, Garry George, director of the National Audubon Society’s Clean Energy Initiative recently stated in an article that “as the lives of billions of birds hang in the balance due to climate change, responsibly sited and reviewed clean energy projects like Vineyard Wind are critical to their survival. We look forward to working with Vineyard Wind to ensure that the project continues to move forward in a way that avoids, minimizes, and mitigates the impact on the environment.”

FInal thoughts

• A Rolling Stone article does a nice job of summarizing the future opportunity based on an International Energy Agency study: “So vast is the potential for offshore wind energy that the IEA predicts that by 2040 the industry will be 15 times larger than it is currently, and that it will garner $1 trillion in investment. The forthcoming boom is due to lowering costs and technological developments like larger turbines and turbines that float. If the potential for floating turbines is realized, offshore wind energy could generate 11 times the global demand for electricity by 2040, the study found.” That estimate does not factor in difficulties in transmitting and storing the power generated, but still, whoa! Offshore wind could power the world.

• If you really want to dive deep on the topic of offshore wind, check out the podcast series Windfall from another great environment focused podcast called Outside/In. This is a podcast from New Hampshire Public Radio. Over the course of five episodes, you get an entertaining look at why offshore wind has developed more slowly in the U.S. but how can we make a bunch of progress going forward.

• And then also the Business Network for Offshore Wind has a podcast called Official Wind Insider: The Network Podcast. You may recall that we interviewed Liz Burdock, their president and CEO, for our original episode. She’s still there!

Original Episode Intro Notes

What We'll Cover:

• Basics of wind

• How wind turbines work

• History of wind energy

• Onshore versus offshore wind

• Overview of the offshore wind energy market

• Trends in offshore wind energy

• Resources for listeners 

Basics of wind

Let’s start with square one and ask, what even causes wind (some of us may be too embarrassed to ask)? Wind occurs when air moves from high pressure to low pressure areas on the earth’s surface. When the sun warms the air, it becomes less dense and rises. As air rises, the pressure lowers and surrounding air moves in to replace it, causing wind.

The more the difference in high and low pressure, the faster the air moves. This difference in pressure is caused by uneven heating of the earth’s surface, which happens due to the earth’s rotation around the sun and due to different land and water formations absorbing the sun’s radiations unevenly.

how wind turbines work

When wind blows, it carries kinetic energy which can move objects. A wind turbine has blades which are designed to rotate when hit by the wind – this motion is vital to the generation of electricity. The earliest turbines (or windmills, really) used materials like cloth to achieve this same effect.

Most wind turbines today start operating at a wind speed of 3-5 meters per second (which is essentially a gentle breeze). As the blades of the turbine spin they turn a shaft in the nacelle, or the box on top of a wind turbine. A generator, which is built into the nacelle, then converts this rotational energy into electrical energy, which then needs to be transformed into a suitable voltage to be connected to the grid or used by a local site. Regardless of the size or location of a wind turbine, they all use the same mechanics in order to generate electricity.

History of wind energy

Let’s start with some brief history about wind energy generally. People used wind energy to propel boats along the Nile River as early as 5,000 BC. In America, colonists used windmills to grind grain, pump water, and cut wood at sawmills. Small wind turbines were widely used In the late 1800s and early 1900s but their use began to decline when power lines were built to transmit electricity to rural areas in the 1930s.

Let’s move offshore. In 1991, the world’s first offshore windfarm called Vindeby was built in Denmark with with eleven 450 kW turbines. First large-scale offshore wind farm, Middelgrunden, was erected off Copenhagen in 2000 with twenty 2MW turbines (about 8x larger than Vindeby). The first offshore wind farm in the US was the Block Island Wind Farm, which came online in December 2016. Its five turbines power 17,000 homes on the small island that had been disconnected from Rhode Island’s main grid and was relying on dirty diesel.

onshore versus offshore wind

There are key differences between these two types of wind farms in terms of efficiency, cost, and marine life.

• Efficiency. Offshore farms tend to be more efficient than onshore wind farms, as wind speed and direction are more consistent at these locations. This means that fewer turbines are required to provide the same amount of electricity as onshore turbines.

• Cost. Onshore wind farms tend to be less expensive than offshore farms (more on this in a moment).

• Marine life. Offshore wind has the potential to harm marine mammals.

  • With northeast US coastal waters teeming with marine life, including the endangered North Atlantic Right Whale, precautions must be taken so that their construction/operations minimizes harm. One major issue is ocean noise from construction activities including driving steel piles, the foundation of for some types of turbines, hundreds of feet into the ocean floor. An example of a best practice to avoid harm from this noise is using “bubble curtain” sleeves around the piles to diminish noise as they are hammered down.

  • Both have the issue of harm to birds. Estimates vary but it’s several hundred thousand bird deaths a year due to wind turbines. This is quite a lot less than deaths due to cats (couple billion) and collisions with buildings (hundreds of millions). Reminds me of that video of Randy Johnson, a hall of fame pitcher known for his insanely fast pitches, taking out a bird on it’s way past home plate.

  • Both have the issue of harm to birds. Estimates vary but it’s several hundred thousand bird deaths a year due to wind turbines. This is quite a lot less than deaths due to cats (couple billion) and collisions with buildings (hundreds of millions). Reminds me of that video of Randy Johnson, a hall of fame pitcher known for his insanely fast pitches, taking out a bird on it’s way past home plate.

The offshore wind energy market

The Global Wind Energy Council proclaimed that 2017 “was a spectacular year for the offshore wind sector”. A historical record of a little over 4,300 MW of new offshore wind power was installed across nine markets globally in 2017. This represents a 95% increase on the 2016 market. Overall, there are now over 18,000MW of installed offshore wind capacity in 17 countries around the world. That is enough to power the equivalent of nearly 9 million average homes in the New York/New Jersey area. By that math, it’s 500 homes per MW so keep that in mind as we keep talking megawatts.

At the end of 2017, nearly 84% of all offshore installations were located in the waters off the coast of eleven European countries. The UK is the world’s largest offshore wind market and accounts for just over 36% of installed capacity, followed by Germany in the second spot with 28.5%. China comes third in the global offshore rankings with just under 15%.

Are our American listeners feeling down and out about not making this top list? Fret not! Many note that the United States seems to be poised as the next breakout market for offshore wind development, as technology improvements have made these projects, which once required large subsides to succeed, economically viable on their own.

Trends in offshore wind

Cost

• McKinsey noted in a 2017 report that offshore wind tended to be 40% more expensive than onshore wind on a levelized cost of electricity basis. Levelized cost is a metric that incorporates total lifetime costs and expected production. Costs are higher for offshore wind because building at sea requires more materials for foundations and piles, and rough weather conditions make installation, operation, and maintenance more expensive. Offshore wind parks also require expensive connectors to the inland transmission network.

New tech

• One is building taller wind towers to access more consistent wind resources.

• Next-generation blades stretching over 70 meters will help the wind turbine capture more wind as efficiently as possible. These 70 meter blades are nearly the length of a football field! These will enable capacity for energy generation to increase, all while the installed cost per kilowatt falls and plant life expectancy grows. Turbines will also increasingly incorporate intelligent controls and remote monitors to increase overall efficiency.

More contracts and potentially many more jobs in the US

• Some states have ambitious offshore wind targets. Two of the most ambitious are New York and New Jersey.

• New York has a target of 2,400 MW by 2030. New York has one offshore wind project already under contract and plans another major procurement of approximately 800 megawatts in late 2018.

• Massachusetts, Rhode Island, Connecticut and Maryland have all awarded offshore wind contracts.

• The Department of Energy’s offshore wind project pipeline is at 25,464 MW of capacity across 13 states. For comparison, Europe’s offshore pipeline is over 100,000 MW.

• DOE also noted in its National Offshore Wind Strategy that the industry could support 150,000 jobs in the US by 2050.In fact, a Workforce Development Institute study found that building an offshore wind power plant requires a diverse technical workforce spanning an estimated 74 occupations.

Resources for Listeners

If your power provider allows, opt for programs that include a mix of wind energy (or any renewable energy source, for that matter). For example, try to find an organization like CleanPowerSF (which is based in San Francisco) in your area. CleanPowerSF advertises the ability for you to keep your same energy service while opting for cleaner energy, whether you’re a residential or commercial user.

Of course, take your passion to the polls! Scan for upcoming initiatives on your November ballot that support the development of renewable energy.

About our guests

Benj Sykes is the UK Country Manager at Ørsted (formerly known as DONG Energy). He has responsibility for the business performance of the company's portfolio of operating windfarms across NW Europe. Previously Benj worked at Hess Corporation, a Fortune 100 Oil and Gas company, so he’ll be able to tell us what life was like on the dark side!

Liz Burdock is the CEO & President of the Business Network for Offshore Wind, a national 501(c)3 nonprofit organization, dedicated to building the U.S. offshore wind supply chain. This private sector, membership‐driven, organization acts as a collaborative entity to deliver educational programming, conduct outreach, and foster bilateral cooperation in the offshore wind industry.