SIOW: Massachusetts Can Make Offshore Wind Competitive by Thinking Big

Commitment by Massachusetts to develop offshore wind energy at a scale of 2,000 MW, combined with ongoing technology and industry advances, will lower previously projected costs for the clean energy source by as much as 55 percent in the next decade, according to a new study by the University of Delaware's Special Initiative on Offshore Wind (SIOW).

That kind of cost reduction, driven by market forces, will put offshore wind on a clear path to deliver clean power at competitive prices for millions of ratepayers in the Boston area and beyond, and make the renewable resource a key contributor to the state's clean energy future, according to the study.

SIOW surveyed industry experts in the region to analyze what electricity costs would look like with 2,000 MW of offshore wind energy off Massachusetts' coast from 2020-2030. The study's key finding is that developing offshore wind capacity at scale rather than on a project-by-project basis will lead to costs "far lower than previously contracted prices for offshore wind in the New England region," with "continuing downward trajectory in cost over the decade" as OSW is built out.

The authors conclude: "An important policy finding of this study is U.S. states can, with thoughtful but straightforward policy, lower the cost of power from offshore wind." By committing to offshore wind at scale, the report confirms that Massachusetts would be effectively enlisting the market to help it achieve that goal.

Previously proposed offshore wind projects in New England have had a levelized cost of energy (LCOE) above 24¢/kWh. The study says that costs for the first project in a 2,000 MW build-out of offshore wind will be much lower – 16.2¢/kWh. Further, costs will continue to decline and the last of these projects will reach a very competitive LCOE of 10.8¢/kWh.

"The key is making a firm commitment to scale so the market can do its work. By providing market visibility – the State's commitment to a pipeline of projects over a set period – the offshore wind industry in the U.S. can deliver energy costs on the kind of downward trajectory seen in Europe. More than 10 GW of offshore wind energy has been built in Europe and powers nearly 7 million homes. The U.S. has an opportunity to take advantage of this domestic clean energy resource which is in such abundant supply," said lead author Dr. Willett Kempton, professor at the University of Delaware's Center for Carbon-free Power Integration and College of Earth, Ocean and Environment.

Wind power has expanded rapidly on land in the US – exceeding 75 GW of installed capacity and now competing on cost with all energy sources in the center of the country. But the US has lagged in offshore wind power, with its first demonstration-size project beginning only last summer off Rhode Island. The US potential, however, remains tremendous. The study notes that in the US Northeast, offshore wind is "a clean energy resource many times larger than on-land wind or rooftop solar," and has the "potential to supply all electricity used by those coastal states."

"The study's methodology looks sound and takes a credible approach that may be a good predictor of what costs will actually be in the 2020-30 period," said Walt Musial, Manager, Offshore Wind and Ocean Power Systems, National Renewable Energy Laboratory (NREL).

SIOW notes the collaborative efforts of private industry and policymakers in Europe who have recognized the benefits of this renewable resource and worked to reduce offshore wind power costs. The study benchmarks against cost-reduction trends for offshore wind costs in Europe, assessing and analyzing key cost drivers and data from offshore wind industry participants in the US market. Using this methodology, the study finds that over the next decade of deployment and market learning, Massachusetts project costs can reach the industry's targets in Europe.

"This is a thorough analysis of what offshore wind off the coast of Massachusetts is likely to cost in the near future," said James Manwell, Professor, Department of Mechanical & Industrial Engineering, University of Massachusetts.

"It is well-supported with data and tracks well with technology developments that are currently underway."

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