A new study from Totaro & Associates identifies a total investment of US$424.8B required to develop the first 80GW of utility-scale offshore wind in the US.
However, there are three critical path areas which will be essential to future growth including foundation production, port infrastructure, and domestic shipbuilding of purpose-designed installation and service vessels.
Newer offshore foundation structures involve much more in-depth engineering and design work which necessitates a higher skill-set not yet present in the US, even with the Oil & Gas sectors’ offshore experience. Given the capital intensive nature for domesticating a design without a significant order commitment, Totaro & Associates said it anticipates partnerships and technology transfer / licensing will be key to facilitating near term expansion in this area.
Significant quayside infrastructure exists to enable offshore wind, but the company has estimated that approximately US$637.4M in infrastructure improvements will be necessary for ports to be capable of supporting turbine production, offshore component load-out as well as service & repair.
Installation and service vessels are in short supply and given European demand, it is unlikely that EU based vessels could be deployed in the US market anyway. This should facilitate domestic shipbuilding.
Grid infrastructure as well as domestic turbine manufacturing will be other keys to success of course, but those elements are poised to fall into place with investment commitments already made in principle to these two areas.
YieldCos could also prove to be a longer term spur to offshore project expansion as they look for developmental and operational assets to include in their portfolio mix. While it’s premature to expect the type of asset M&A spree that it is present in onshore, YieldCos have definitely been contemplating the offshore sector in Europe. Since some of the more attractive and cost competitive projects not even online yet, acquisition will likely come down the road, Totaro & Associates concluded.
Source: Totaro & Associates