The Atlantic coast of the northeastern United States has significant technical potential for the deployment of offshore wind power generation. The Northeast states are well positioned to benefit from the deployment of offshore wind (OSW) as a resource that can stabilize volatile energy costs, create clean energy at a scale that can contribute to replacing the region’s retiring fossil-fueled and nuclear plants, diversifying the supply mix of a region heavily reliant on natural gas, meeting the region’s ambitious goals for addressing climate change impacts from the energy sector, and creating significant numbers of local clean energy jobs.
The European experience with OSW has produced an industry that has over 12 gigawatts (GW) of installed capacity thus far and is expected to reach 24.6 GW by 2020 and up to 40 GW by 2024. In 2014, the European OSW industry supported 75,000 full-time equivalent (FTE) jobs. Based on the existing pipeline of projects in Europe, the industry is expected to support approximately 125,000 FTE jobs by 2019 (Ernst & Young, 2015; Ho, Mbistrova, Pineda, & Tardieu, 2017).
Although the OSW resource of the Northeast region has the potential to meet the needs of the region, successful deployment thus far has been limited. While the Cape Wind project in Massachusetts was vital in starting the conversation in the United States about the potential of offshore wind —which led to the development of the Federal OSW permitting process, after 15 years navigating previously unchartered waters of permitting, long-term contracting, and public acceptance— the project has stalled due to cancelled power purchase agreements (PPA) and litigation. In Maine, two proposed 12 megawatts (MW) pilot projects were selected for long-term contracts by the Maine Public Utilities Commission (ME PUC). Statoil suspended development of its Hywind Maine project (selected in 2011) in 2013, but pre-construction research and development is underway on the University of Maine’s Aqua Ventus I, an innovative floating technology demonstration project (selected in 2013). This project was selected to receive up to $40 million of DOE support. New Jersey has established an offshore wind renewable energy credit (OREC) program to drive OSW deployment. Although Fishermen’s Energy’s project, a fully permitted 24 MW pilot-scale Atlantic City Windfarm, received DOE support, the project stalled without New Jersey BPU approval to participate in the state’s OREC program and due to failure to reach a funding milestone to receive additional DOE funding (U.S. Department of Energy, 2016; Offshore Wind Hub, 2016).
However, encouraging recent state and regional policy and project development activities suggest increasingly favorable prospects for OSW in the United States. The nation’s first OSW development, Deepwater Wind’s 30 MW Block Island Wind project, became operational in December 2016 in Rhode Island’s state waters. In January 2017, the Long Island Power Authority (LIPA) selected Deepwater Wind’s 90 MW South Fork Wind Farm for a long-term PPA. The Bureau of Ocean Energy Management (BOEM) continues to oversee the auctioning of lease areas off the Atlantic coast, awarding to Statoil in December 2016 a hotly-contested lease in New York State’s first Wind Energy Area that can support up to 1 GW of OSW capacity. In addition, legislation enacted in Massachusetts in 2016 requires the state’s utilities to solicit 1.6 GW of OSW between 2017 and 2027. In early 2017, New York Governor Andrew M. Cuomo announced a statewide target of 2.4 GW of OSW capacity by 2030.
This report presents a Regional Market Characterization (RMC), one component of “A Roadmap for Multi-State Cooperation on Offshore Wind Development,” a DOE-funded effort Massachusetts, New York, and Rhode Island to evaluate the potential for mutual action that could bring OSW to scale in the region. The report describes the context for OSW deployment in the region and seeks to answer the question: What could the scale of near-term and long-term regional OSW deployment be, given the nature of regional OSW resources and supply chain, individual state policy drivers and initiatives, regional energy needs as well as the region’s existing resource base?
A project team consisting of Sustainable Energy Advantage, LLC (SEA) and its subcontractors, AWS Truepower, Daymark Energy Advisors, and Meister Consultants Group, was commissioned to develop a forward-looking estimate of the potential market for OSW, expressed in installed capacity and associated energy production. In the report, they present the OSW market potential as a range of likely regional OSW deployment bounded by low- and high-deployment trajectories in Atlantic waters off the northeastern U.S. coast through the year 2030. In addition, the project team compiled and summarized data and other background information on OSW development potential, electric system and market factors, and state and regional policies, and developed plans and other initiatives that are relevant to the future potential for building out the OSW resource in the Northeast.