US Offshore Wind Farms Are Being Strangled With Crimson Tape

This article is republished from The Conversation below a Inventive Commons license.

America’s first large-scale offshore wind farms began sending power to the Northeast in early 2024, however a wave of wind farm undertaking cancellations and rising prices have left many individuals with doubts concerning the trade’s future within the US.

A number of huge hitters, together with Ørsted, Equinor, BP, and Avangrid, have canceled contracts or sought to renegotiate them in latest months. Pulling out meant the businesses confronted cancellation penalties starting from $16 million to a number of hundred million {dollars} per undertaking. It additionally resulted in Siemens Vitality, the world’s largest maker of offshore wind generators, anticipating financial losses in 2024 of round $2.2 billion.

Altogether, tasks that had been canceled by the top of 2023 had been anticipated to complete more than 12 gigawatts of power, representing greater than half of the capability within the undertaking pipeline.

So, what occurred, and might the US offshore wind trade recuperate?

I lead the College of Massachusetts Lowell’s Heart for Wind-Vitality Science, Know-how, and Analysis (WindSTAR) and Center for Energy Innovation, and comply with the trade intently. The offshore wind trade’s troubles are sophisticated, nevertheless it’s removed from lifeless within the US, and a few coverage modifications could assist it discover firmer footing.

A Cascade of Approval Challenges

Getting offshore wind tasks permitted and authorised within the US takes years and is fraught with uncertainty for builders, extra so than in Europe or Asia.

Earlier than an organization bids on a US undertaking, the developer should plan the procurement of the whole wind farm, together with making reservations to buy parts corresponding to generators and cables, building gear, and ships. The bid should even be cost-competitive, so firms generally tend to bid low and never anticipate sudden prices, which provides to monetary uncertainty and danger.

The successful US bidder then purchases an expensive ocean lease, costing within the hundreds of millions of dollars. Nevertheless it has no proper to construct a wind undertaking but.

Earlier than beginning to construct, the developer should conduct website assessments to find out what kind of foundations are attainable and determine the dimensions of the undertaking. The developer should consummate an settlement to promote the facility it produces, identify a point of interconnection to the facility grid, after which put together a building and operation plan, which is topic to additional environmental review. All of that takes about 5 years, and it’s solely the start.

For a undertaking to maneuver ahead, builders could have to safe dozens of permits from native, tribal, state, regional, and federal businesses. The federal Bureau of Ocean Vitality Administration, which has jurisdiction over leasing and administration of the seabed, should seek the advice of with businesses which have regulatory obligations over completely different facets within the ocean, such because the armed forces, Environmental Safety Company, and Nationwide Marine Fisheries Service, in addition to teams together with business and leisure fishing, Indigenous teams, transport, harbor managers, and property homeowners.