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US East Coast states to add more than 19,000 MW of offshore wind by 2035

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US East Coast states to add more than 19,000 MW of offshore wind by 2035

States along the U.S. East Coast are seeking to procure more than 19,300 MW of offshore wind capacity through 2035, according to an analysis from S&P Global Market Intelligence and S&P Global Platts.

Legislation, regulation and, now, approved power purchase agreements are encouraging the development of the new capacity, though only 30 MW of offshore wind resources are operating in the U.S. Grid operators may have to modify their procedures to accommodate the additional resources.

New York has set the pace for offshore wind goals, after Gov. Andrew Cuomo in July signed legislation for the state to get 9,000 MW of electricity from offshore wind by 2035. The state also selected two offshore wind projects, one proposed by Norway's Equinor ASA, called Empire Wind, and another by a joint venture between Denmark's Ørsted A/S and U.S. utility Eversource Energy, called Sunrise Wind.

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Massachusetts officially has an offshore wind target of 1,600 MW by 2027, though Gov. Charlie Baker's administration is considering an additional 1,600 MW to boost the state's procurement goals. State distribution utilities have already contracted for a portion of the output of the 800-MW Vineyard Offshore Wind Project, and have issued a request for proposals for up to 800 MW more.

In New Jersey, Gov. Phil Murphy signed an executive order directing the state Board of Public Utilities work on initiatives to support 3,500 MW of offshore wind by the 2030. In June, state regulators selected the 1,100-MW Ocean Offshore Wind Farm, from Ørsted.

Connecticut recently adjusted its clean energy goals to include a separate 2,000-MW carve-out for offshore wind, issuing a request for proposals Aug. 16. The state's utilities have already contracted for a portion of the output of the 704-MW Revolution Wind Offshore Project. Another portion of that facility's output will go to utilities in Rhode Island, which has a 1,000-MW clean energy target set in 2017 by Gov. Gina Raimondo that includes offshore wind.

Other eastern U.S. states are not yet at the solicitation stage. Earlier this year, Maryland passed a mandate for getting 50% of the state's electricity from renewables by 2030, which includes a 1,200 MW carve-out for offshore wind. Virginia is targeting 2,000 MW of capacity, potentially through the eventual build-out of the Coastal Virginia Offshore Wind Project from Ørsted and local utility Virginia Electric and Power Co. doing business as Dominion Energy Virginia, a subsidiary of Dominion Energy Inc.

Maine, which previously had a 5,000-MW-by-2030 target, changed its renewable portfolio standard in June. The state now aims to procure 80% of its electricity needs from renewable energy sources by 2030 and 100% by 2050. While there is not a specific goal for offshore wind, the energy source can still count toward the new RPS, Dan Burgess, director of Gov. Janet Mills' Energy Office, said.

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More states lead to more coordination

The various state efforts have prompted stakeholders to focus on improving coordination among all parties.

In June, the U.S. Department of Interior's Bureau of Ocean Energy Management, which oversees the country's offshore wind efforts, announced that it would use a regional approach to its planning activities. The federal agency, known as BOEM, said it would create a regional task force for Maine, Massachusetts and New Hampshire to explore potential development in the Gulf of Maine. BOEM also decided to not issue additional leases in southern New England "until there is additional interest from either the states or the offshore wind industry."

"BOEM believes that predictability in its planning and leasing process provides a benefit to the development of the offshore wind energy industry," the agency said in a June 11 news release.

A regional approach is "the right approach" to best utilize everyone's efforts, said Andy Geissbuehler, an advisory director at consulting firm BVG Associates who is working with the Virginia Department of Mines, Minerals and Energy on the state's offshore wind efforts. The Mid-Atlantic and southern regions will be able to learn from the first movers in the U.S. like New England and New York on issues such as supply chain and transmission. It also allows the second movers to find strategies that the early offshore wind movers did not address, such as a multi-state supply chain cluster.

"As we now see more and more very high volumes, I think that also eases the challenge that every state likes to secure volume and job creation and involvement," Geissbuehler said during a July 23 BOEM webinar. "With the industry growing so rapidly, I think that allows that each state can play a key role but at the same time that we optimize in a way that we pursue ... the most effective structure."

Governmental and corporate stakeholders alike have recognized states' energy policies have been instrumental to the U.S. becoming a more serious player in offshore wind. But those parties have said that more state coordination remains a top concern in building out the industry.

"As the industry matures, companies cannot build factories and operations in every state and a better understanding of the state's assets along with specific needs would help the industry grow so there could be a focus for each state," the Business Network for Offshore Wind, a U.S.-based not-for-profit organization, said in recent report.

Grid might need rule changes, capacity additions

One key stakeholder group in the addition of offshore wind resources to the U.S. energy supply mix is regional grid operators, who have to ensure the grid runs reliably with the new capacity. Along with offshore transmission infrastructure, ensuring reliability could include additional and reconfigured onshore transmission resources.

The PJM Interconnection, which includes the coastal states of Maryland, New Jersey and Virginia, is receiving interest from transmission developers who want to build infrastructure for future projects.

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"Offshore wind generation projects today can enter the PJM queue and be studied under the current interconnection process that is in place today, and the projects would be handled the same as any other technology," PJM spokesman Jason McGovern said in an email. "However, PJM has had increasing interest from transmission developers seeking to build offshore transmission facilities for as-of-yet unplanned future wind generation. PJM's rules are not currently set up for that kind of development."

The grid operator wants to improve the interconnection process to allow merchant transmission developers to request capacity interconnection rights, or equivalent rights, for non-controllable alternating current transmission facilities that will provide interconnection points for future offshore generation resources, according to a framing document discussed at a February Planning Committee meeting.

PJM envisions two phases of implementation. The first would be consideration of process changes to allow interconnection customers to request capacity interconnection rights for a radial line, and identify impacts and required network upgrades.

Phase two would consider process changes to allow flexibility for interconnection customers to connect the transmission facilities together for an "ocean grid," according to a PJM presentation.

Thus far, ISO New England and the New York ISO are treating offshore wind grid interconnections in the same manner as other power generation technologies.

"The administrative process for offshore wind projects is the same as all other projects looking to connect to the grid," ISO New England spokesman Matthew Kakley said in an email. "They enter through our interconnection queue, and are studied to see what the developer needs to do to reliably interconnect to the grid."

However, the grid operator has noticed that many developers appear to be proposing technologies and configurations that leverage approaches that have been developed in the European offshore wind market, he added. Europe currently has approximately 18,500 MW of operating offshore wind power capacity, according to trade group Wind Europe.

In New York, "the NYISO has system planning processes in place designed to evaluate proposed new facilities and determine if additional system upgrades are necessary to reliably interconnect to the grid," the system operator said in an email. "Additionally, the NYISO Public Policy Transmission Planning Process provides a mechanism through which further transmission expansion could be realized if the state identifies such a need in the future."

The ISO's CEO, Rich Dewey, said in an interview in June that there is uncertainty about how offshore wind farms will connect with the grid operator's load centers in Zone J (New York City) and Zone K (Long Island). If the 9,000 MW the state wants to add all come online, more analysis will be needed on where the resources connect to land and how the injection of that amount of power impacts the grid in those zones, Dewey said.

One option would be for each developer awarded a contract to figure out where and how to connect on land. Longer-term thinking could see an option to invest in an offshore grid to provide interconnection points for multiple future developers, he said.

"It will come down to a question of how much investment do we make up front ... or the incremental approach ... which, if we get a high adoption rate anywhere near 9,000 MW, could get more pricey," Dewey said.

Jared Anderson is a reporter for S&P Global Platts. S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.