US Offshore Wind Project Pipeline Nears 53 GW

Fixed-Bottom

September 26, 2023, by Adrijana Buljan

The US has almost 53 GW of offshore wind projects in operation, development and planning stages. This could power more than 18 million US households if all the projects currently in development and planning are built.

The US offshore wind pipeline reached 52,687 MW at the end of May 2023, with two offshore wind farms in operation totalling 42 MW, over 40 projects under development totalling 47,606 MW, and a further 5,039 MW of potential capacity in the planning stage.

This is according to a National Renewable Energy Laboratory (NREL) analysis in the Offshore Wind Market Report: 2023 Edition recently released by the US Department of Energy (DOE).

NREL has also highlighted key developments in the US offshore wind energy market from January 2022 to May 2023, including the launch of three new lease areas in the Gulf of Mexico and the USD 2.7 billion (approximately EUR 2.55 billion) the US offshore wind industry invested in ports, vessels, supply chain, and transmission in 2022.

Furthermore, state-level procurement activities and policies are driving continued momentum in the country’s offshore wind sector, with several states aiming to install a total of 42,730 MW of offshore wind capacity by 2040.

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NREL also notes that floating offshore wind has gained more traction. In this regard, the report marked the first-ever commercial floating wind lease sale off the coast of California as one of the key developments, along with the US government’s announcement of the Floating Offshore Wind Shot, which targets reducing the floating wind energy cost by 70 per cent and deploying 15 GW of floating offshore wind in the US by 2035.

Looking at the offshore wind market, NREL’s analysis also finds it to have become more volatile in the past year, with project costs increasing due to inflation, interest rates, and supply chain uncertainty.

The Inflation Reduction Act of August 2022 may provide some relief to keep projects profitable, according to NREL, as it provides tax credit incentives for investing in offshore wind energy and the domestic supply chain while also potentially softening adverse impacts of rising costs due to inflation, supply chain constraints, and interest rates.

Global capacity could reach 380–394 GW by 2032, representing a sixfold increase over the next decade, according to the report, which also says the US market growth could parallel anticipated global market growth, despite current large-scale economic challenges.

As for the economic challenges facing the first generation of commercial projects, these could significantly hinder workforce and manufacturing growth, the report says.

Looking forward, broad federal and state support for commercial leasing, energy planning targets, procurement policies, offtake agreements, and US jobs and domestic supply chain development point toward sustained market growth, according to NREL.

“Despite recent market uncertainty, the project pipelines continue to grow in both fixed and floating offshore wind project developments,” said Walt Musial, NREL offshore wind energy expert and the lead author on the report. “As the first major projects move toward commercial operation in the next year, we are likely to see offshore wind begin to make a significant contribution toward reducing the carbon emissions of our electric supply.”