US Prepares Push for Offshore Wind

Early in 2021, the Biden administration announced plans to invigorate offshore wind energy in the US, citing new jobs and economic opportunity as driving forces in the decision. As part of the announcement, the Interior Department’s Bureau of Ocean Energy Management announced a new priority Wind Energy Area between Long Island and New Jersey. Additionally, the Department of the Interior announced that the Vineyard Wind project off the coast of Massachusetts was granted final federal approval. It will be the first large scale offshore wind project in the US.

The US significantly lags Europe in offshore wind development, but these recent announcements indicate that it  is trying to catch up. Right now, the US only has two small offshore wind projects, with Vineyard Wind slated to be the third when it begins delivering energy to Massachusetts in 2023.

Challenges for US Offshore Wind Development

Of the challenges that remain for offshore wind development in the US, the lack of Jones Act compliant offshore wind turbine installation vessels may be most important. Signed in 1920, the Jones Act requires that all goods shipped between US ports be transported by US vessels. Without Jones Act compliant turbine installation vessels, US wind plants are forced to rely on European ships that travel hundreds of miles each way, creating supply chain inefficiencies while significantly increasing the cost and time required to install offshore wind projects. Historically, the US has not had a Jones Act compliant vessel because the demand was not there. But Biden’s recent announcement in support of rapid offshore wind deployment may create the demand necessary for the commissioning of more Jones Act compliant wind turbine installation vessels.

Compliant Vessels Coming Soon

Dominion Energy is building what will be the first Jones Act compliant wind installation vessel in the US. It is being constructed by the shipbuilding firm Keppel AmFELS at its Brownsville, Texas shipyard and is expected to be sea ready by late 2023. On June 1, Dominion Energy announced an agreement with Ørsted and Eversource to charter Dominion Energy’s Jones Act qualified offshore wind turbine installation vessel for the construction of two offshore wind projects in the Northeast.

The agreement between Dominion Energy, Ørsted, and Eversource is a step toward ensuring that Dominion will see ROI of approximately $500 million in the turbine installation vessel. The concurrent construction and agreement to charter the vessel is a useful model for future vessels that will protect investors and stakeholders and ensure that future vessels can receive financing.

Following Dominion Energy’s announcement that its vessel was proceeding as planned, Eneti announced in May 2021 that the company was “in advanced discussions with several American shipbuilders for the construction of a Jones Act compliant wind turbine installation vessel.” 

Jones Act qualified installation vessels will provide economic benefits to US offshore wind projects and play an important role in expanding offshore wind capacity in the US. Barring a repeal of the Jones Act, further development of these vessels will be necessary if large scale, low cost offshore wind development is to be achieved in the US.

For an updated forecast of global wind installations and historical, annual, and cumulative installed capacity, check out Guidehouse Insights’ report, Global Wind Energy Database 2Q21.