Legislative Academy Session: The Mountain Thunder Lodge, Breckenridge CO
Walt Musial | National Renewable Energy Laboratory | Offshore Wind LeadThursday, July 15, 2021
Offshore Wind Energy Outlook
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Why Pursue Offshore Wind Energy?
✔Generation close to load (80% of the population lives on the coast)
✔Stronger winds
✔ Larger scale projects are possible
✔ Unique economic benefits
✔ Revitalizes ports and domestic manufacturing
✔ Less constrained by transport and construction
NREL | 3Figure credit: Joshua Bauer, NREL
Offshore Wind Plant Basics • The rotor converts kinetic
energy of the wind to create torque (rotational force) that spins a generator that produces electricity.
• Multiple turbines are connected to a substation which connects a high voltage cable to the land-based grid.
• Offshore wind farms are growing beyond 1,000 MW in size and greater, comparable to coal, natural gas, or nuclear power plants
• One 12-MW offshore wind turbine can power 4,500 New York residences
Nacelle
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Larger Turbines Enable Lower Cost
GE 12-MW Wind Turbine Nacelle (above) and 107-m Blade Below)
The three leading wind turbine manufacturers, GE, Siemens, and Vestas have announced 12- to 15-MW offshore wind turbines
NREL | 5Figure by Joshua Bauer, NREL
Offshore Wind Turbine Substructure Type Depends on Water Depth
32,906 MW Installed
82 MW Installed
Projected Offshore Wind Industry Growth• Over 99% of
current offshore wind farms have fixed-bottom foundations.
• Installed fixed-bottom capacity is 32,906 MW.
• Installed floating capacity is 82 MW.
• By 2030, the United States plans to deploy 30 GW of offshore wind.
Source: Musial, W., Beiter, P., Spitsen, P., Duffy, P., Marquis, M., Cooperman, A., Hammond, R., and Shields, M. (2021) 2020 Offshore Wind Technologies Market
Report (Technical Report). Washington, D.C.: U.S. Department of Energy Office of Energy Efficiency & Renewable Energy. August 2021. Pending publication.
United States
China
Based on Developer-Announced COD Through 2026
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Winning Bid Prices from U.S. and European Offshore Wind Auctions Estimate Cost
• Globally, the average levelized cost of energy (LCOE) of fixed-bottom offshore wind energy (2020 COD) is below $95/megawatt-hour (MWh) and falling.
• The procurement price for U.S. offshore wind ranges between $96/MWh (Vineyard Wind I) and $71/MWh (Mayflower Wind); projects expected to commence commercial operations between 2022 and 2025.
• Floating offshore wind LCOE is predicted to decline from approximately $160/MWh in 2020 to $60‒$105/MWh in 2030.
4 Strike prices were adjusted to obtain a “like-for-like” comparison of tendered offshore wind projects globally. Grid connection and development costs were added for those global projects where they are not part of the tender strike price; differences in contract length between global project tenders were accounted for by converting the annual strike price to a present value. The strike prices are shown in “levelized” terms (i.e., in terms of annualized $/MWh).
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Cost Breakdown of an Offshore Wind Plant
Stehly, Tyler, Philipp Beiter and Patrick Duffy. 2020. 2019 Cost of Wind Energy Review. Golden, CO: National Renewable Energy Laboratory. NREL/TP-5000-78471. https://www.nrel.gov/docs/fy21osti/78471.pdf.
Fixed-Bottom Offshore Wind Capital Cost Breakdown
• The wind turbine makes up only 21% of the total cost for a fixed-bottom wind project (1,301 $/kW).
• U.S. supply chains can grow around many of these elements.
• 11 ports on east coast with up to $3 billion in investments to upgrade so far.
• Port investment attracts supply chain investments
• $12 billion/year estimated for U.S. industry
* This chart includes both CapEx and OpEx
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Elements of a Viable Offshore Wind Industry • Continued cost reduction to
competitive pricing $50/MWh by 2030 – 30% ITC tax credits extend to 2025
• Market visibility – National goal of 30 GW by 2030
• Regulatory certainty and expansion – site control – political cooperation for equitable sharing of ocean space
• Bulk transmission access – political support for coordinated actions
• Industry supply chain access – European >>> Domestic/Jobs – Transition existing O&G capabilities
• Port facilities to serve local installations and service ports.
• Jones Act compliant vessels- heavy lift, survey, foundation installation, crew transfer, and cable lay vessels – Leverage O&G capabilities
https://www.nj.gov/bpu/newsroom/2020/approved/20201118a.html
New Jersey State Agreement Approach
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Snapshot of Emerging U.S. Offshore Wind Industry• 39,298 MW of policy
commitments from eight eastern states
• 35,324 MW estimated in total pipeline
• 42 MW Installed
• 800 MW approved (Vineyard Wind)
• 10,779 MW in advanced permitting – 14 Construction and
Operating Plans
• 11, 652 MW with site control
• 12,051 MW unleased wind energy areas
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Vineyard Wind 1: First U.S. Commercial Project Approved
• Vineyard Wind is an 800-MW fixed-bottom project located 15 miles south of Martha’s Vineyard, expected to be fully operational by 2024.
• It will be the first commercial-scale offshore wind energy project in the United States.
• Using 62 GE Haliade-X 13-MW turbines, the project will produce enough energy to power 400,000 Massachusetts homes, delivering a maximum capacity of 800 MW.
• The project is expected to create about 3,600 gross full-time-equivalent jobs. Source: Vineyard Wind Website
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U.S. Offshore Wind State Procurement Policies and Activity as of 5/31/21
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Timeline of U.S. Offshore Wind Procurements by State • In 2020, Virginia passed
the Virginia Clean Economy Act, to procure 5,200 MW by 2034.
• In March 2021, Massachusetts passed “An Act Creating a Next Generation Roadmap for Massachusetts Climate Policy”, which expanded the commonwealth’s goal from 3,200 MW to 5,600 MW by 2035.
• n June 2021, NC Governor Roy Cooper issued Executive Order 218 which created a 2,800 MW offshore wind goal by 2030 and an 8,000 MW goal by 2040.
Source: Musial et al. (2021)
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Policy Commitments by State as Percentage of Total Electric Retail Sales
State State OSW PolicyRetail Energy Sales (2020)
Net Capacity
Factor Offshore Wind
Energy Percent Retail
MW MWh MWh Maryland 1,568 60,720,658 0.44 6,043,699 10
Virginia 5,200 118,435,380 0.44 20,042,880 17 Rhode Island 430 7,349,915 0.48 1,808,064 25
New York 9,000 145,600,345 0.46 36,266,400 25 Connecticutt 2,000 27,899,996 0.48 8,409,600 30 New Jersey 7,500 73,916,704 0.46 30,222,000 41
Massachusetts 5,600 51,336,598 0.48 23,546,880 46 North Carolina 8,000 136,435,531 0.42 29,433,600 46
Totals 39,298
Retail Energy Sales based on EIA data November 2020https://www.eia.gov/electricity/state/
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Possible New Coastal States to Watch: Maine, New Hampshire, Delaware, South Carolina, California, Oregon, Hawaii, Washington, Louisiana, Texas
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Offshore Wind Summary• Cost: Necessary cost reductions are likely from commercial domestic and
global markets – competitive, unsubsidized • Transmission: Bulk transmission access will be a growing issue requiring
government coordination• Regulatory: More leasing will be required as industry expands• Ports: Local port facilities are needed with unique capabilities – port
investments bring further private investment and long term economic growth • Supply Chain: Accelerate local manufacturing and construction capabilities
for jobs and economic growth.• Vessels: Ship building industry: 5 new U.S. flagged heavy lift ships, many
smaller vessels • 30 GW of offshore wind by 2030 is about a $100 billion+ industry
opportunity
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Walt MusialOffshore Wind Platform Lead
[email protected] Renewable Energy
Laboratoryhttps://www.nrel.gov/about/nwtc.ht
ml
Thank you for listening. Questions?
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Speaker BioMr. Walt MusialPrincipal EngineerOffshore Wind Research Platform LeadNational Renewable Energy LaboratoryGolden Colorado, USA
Walt Musial is a Principal Engineer and leads the offshore wind research platform at the National Renewable Energy Laboratory (NREL) where he has worked for 32 years. In 2003 he initiated the offshore wind energy research program at NREL which focuses on a wide range of industry needs and critical technology challenges. He chairs the American Clean Power Association Offshore Wind Standards Subcommittee and is the Senior Technical Advisor to the National Offshore Wind R&D Consortium. Previously, Walt also developed and ran NREL’s full scale blade and drivetrain testing facilities for 15 years. Earlier, Walt worked as a test engineer for five years in the commercial wind energy industry in California. He studied Mechanical Engineering at the University of Massachusetts - Amherst, where he earned his bachelor’s and master’s degrees, specializing in energy conversion with a focus on wind energy engineering. He has over 120 publications and two patents.
