Navigant Releases Report on U.S. Offshore Wind Manufacturing and Supply Chain Development

Authorities

December 13, 2012

The Navigant Consortium released the “U.S. Offshore Wind Manufacturing and Supply Chain Development” report, prepared under an award by DOE in order to provide objective economic analysis and reporting of market activities and progress related to offshore wind energy in the United States.

The “U.S. Offshore Wind Manufacturing and Supply Chain Development” report provides an assessment of the domestic supply chain and manufacturing infrastructure required to support a growing U.S. offshore wind energy market, including baseline information on current industry status and a strategy for meeting future supply chain needs under several long-term industry growth scenarios.

This report is intended for use by the following groups:

Industry participants who seek baseline cost and supplier information for key technical components and subsystems of offshore wind projects.
Federal, state, and local policymakers and economic development agencies, to assist in identifying policies and investment strategies with lowest effort and highest impact.
Domestic manufacturers and suppliers seeking to evaluate areas of opportunity and understand the requirements for selling goods and services into the future U.S. offshore wind market.

The report’s key findings include:

Innovations including floating substructures, hurricane tolerance, sea- and surface-ice tolerance, and transitional water-depth foundations are anticipated to have the greatest ability to open up new markets to offshore wind technology.
The potential exists for significant domestic supply of a future U.S. offshore wind market.
A future U.S. offshore wind market would have to compete with the European offshore market as well as land-based markets in emerging countries for manufacturers’ investment dollars.
In some cases, U.S. manufacturing facilities operating at part load may have opportunities to shift or retool some capacity to serve the offshore market, particularly if those facilities are well-positioned near coasts where offshore projects are being developed.
The opportunity for suppliers to enter a U.S. offshore wind market is highest in foundations and substructures, towers, blade materials, and power converters and transformers.
Based on the three growth scenarios, the estimated nationwide employment impacts for domestic manufacturing of major components (turbines, towers, blades, and foundations) for the U.S. offshore wind market range from 2,000 FTE jobs (low growth of 10 gigawatts [GW] cumulative capacity ) to almost 14,000 FTE jobs (high growth of 54 GW cumulative capacity) by 2030.
Estimates for the economic impacts of upgrades to a single port that wishes to serve the U.S. offshore wind market include incremental employment ranging from 600 to over 17,000 FTE jobs and incremental state GDP ranging from $48 million to $1,333 million.
Research shows that a demand of 100 to 150 turbines per year (or 500 to 800 megawatts [MW] per year) for a minimum of five years may be required to justify an investment in a full-scale turbine manufacturing plant.
The authors developed three scenarios to estimate the timing of factories being built in the United States that are dedicated to offshore wind. Under a high-growth scenario, a single component plant could be started up in the Atlantic region by 2015, the Great Lakes, and Pacific regions by 2020, and the Gulf Coast region by 2023, when those markets reach 300 MW per year. A full WTG manufacturing facility could be started up in the Atlantic region by 2019 and in the Pacific region by 2022, when those markets reach 800 MW per year.
The greatest driver for the development of a U.S.-based offshore wind supply chain is credible evidence of a strong and sustainable U.S. offshore wind market.
Market barriers faced by new suppliers in the offshore wind industry fall into two primary categories: production planning and production facilities. In terms of production planning, the offshore wind sector has three major barriers to entry: low production volumes, batch production requirements, and widely fluctuating demand.