Recently installed foundations atDeepwater Wind's Block Island project.
Source: Deepwater Wind
Withthe blades of the first commercial U.S. offshore wind power facility expectedto start spinning off Rhode Island's coastline later this year, offshore winddevelopers still face huge hurdles to make the industry a reality.
Legal,political and economic challenges
Developershope that these fledgling projects will spur on the infrastructure needed toachieve the economies of scale that can bring down the costs of electricityfrom offshore wind. State officials, meanwhile, are hoping to capture thedevelopment that would be needed to support such an industry. But jump startingsuch an industry will have huge upfront costs.
Themost prominent examples of this infrastructure comes from proposals for portsup and down the Eastern seaboard to support manufacturing and maintenance foroffshore facilities.
Offshore wind turbinemanufacturers have mostly located in Europe, which has a head start of morethan two decades over the U.S. in offshore wind development. Shifting some ofthe supply chain across the Atlantic will likely take proof that multipleAmerican projects can be successful. "We need anywhere from 1,500 to 2,000MW of back orders of turbine purchases to entice them to move a manufacturingfacility to the U.S.," Rich said in an interview.
And the cost of even small projects has attractedsignificant pushback from ratepayers and officials.
Today, just one 30-MW wind projectis under construction,
'The biggest challenge'
Thelevelized cost of electricity — a measure that takes into account bothconstruction costs and costs of generating electricity — for offshore wind isnearly $200 per MWh, according to the U.S. Energy Information Administration.Compared to $73.60 per MWh for onshore wind, $75.20 per MWh for combined-cyclenatural gas and $95.10 per MWh for conventional coal-fired plants, thatestimate tags offshore wind as one of the most expensive forms of power.
Thecost gap between offshore wind and competing energy sources has served asammunition for opponents of some of the first offshore wind projects in thecountry.
FormerRhode Island Attorney General Patrick Lynch, who unsuccessfully appealed stateregulators' decision to approve a contract for the 30-MW Block Island project tothe state Supreme Court, has said the contract "will force us to buyoverpriced electricity for the next 20 years in order to subsidize one company,rather than jobs that are so desperately needed." Another lawsuit fromlocal ratepayers and the Rhode Island Manufacturers Association is pendingagainst the Block Island project in federal district court.
"Skepticspoint to the cost. That's the biggest challenge we face," Jason Folsom,the sales director for offshore wind in the Americas at Siemens Wind Powerowned by Siemens AG,one of the biggest wind turbine manufacturers in the world, said at the annualmeeting.
The location of that meeting is emblematic of the response theoffshore wind industry has for those skeptics. The meeting was held at SparrowsPoint, Md., at the site of a former steel mill on a tip of land outsideBaltimore where the Patapsco River meets Chesapeake Bay. That choice oflocation was not coincidental
Baltimore County recently applied for a $26 million federalgrant to redevelop part of Sparrows Point with a pier and other infrastructureto serve U.S. Wind, but that grant, if approved, is just a start. It is"just a fraction of what we need done," Rich said, estimating that itwould cost $60 million to $90 million to fully redevelop the port for offshorewind.
Up and down the Eastern seaboard, state officials may lookskeptically at the price tag of offshore wind, but there is also clear interestin the potential to tap a local renewable energy source and jump start activityin underused ports.
A ship on anassignment at an offshore wind power plant in the German North Sea.
Beyond Sparrows Point, otherexamples of potential ports include a temporary facility at the port of Providence,R.I., where workers assembled tower sections to be used in the Block Islandproject. Investors also met with New Jersey state government members about thepossibility of using a port at Paulsboro, N.J., to benefit projects likeFishermen's EnergyLLC's proposal to build a 25-MW wind farm off Atlantic City, N.J.
Further, at the Business Networkfor Offshore Wind meeting, several speakers mentioned that Brooklyn, N.Y.,could be another ideal place for an offshore wind port, especially consideringrecent aggressive moves by the federal government to lease about 81,000acres of ocean near Long Island, N.Y., for offshore wind development.
Such efforts, though, are notwithout risks. New Bedford, Mass., built what was promoted as the firstoffshore wind port in the country, but the project this port has been trying toserve — the 468-MW Cape Wind project from Energy Management Inc. subsidiary — has stalled.
Rich used the example of Denmark, a country that became aleader in offshore wind by installing one of the first projects in 1991. Whenthe European offshore wind industry took off about 15 years ago, Denmark becamethe home to the bulk of the manufacturing for the industry in Europe, despitecountries hundreds of miles away, like the U.K., also growing their offshorewind capacity.
"As much as the industrialbase is in the U.K., it's not geared toward offshore wind," Rich said.
Rich views Denmark as instructivefor Baltimore, where U.S. Wind is based and where it has pushed for BaltimoreCounty's grant request to redevelop Sparrows Point.
"If we can make aninvestment, we can source in a shorter distance, Boston-to-Baltimore, than fromDenmark to the U.K.," he said.
The fact that Europe is the centerof the offshore universe helps explain why U.S. offshore wind projects are soexpensive, and also why starting a homegrown supply chain could make theindustry more economic. There are no turbine blades designed for marine usethat are currently manufactured in the U.S., so they must be shipped, typicallyacross the Atlantic, in vessels that can dock at deep water ports, according toFishermen's Energy COO Paul Gallagher. A project can spend around 30% of itscosts in Europe, he said.
Case in point, the Block Island project's 15240-foot blades, which arrived this month, were shipped in from Denmark.