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US offshore wind moving beyond emerging-sector status, industry says

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Clean energy company executives and government officials shared a message Oct. 16 in Washington, D.C.: the U.S. offshore wind industry is well on its way to moving beyond its nascent stage.

Support from both the federal and state governments shows that the offshore wind industry is no longer just around the corner but "is here, and it is happening," American Wind Energy Association CEO Tom Kiernan said during the trade group's annual offshore wind conference.

"It's not surprising, but it is great to see the bipartisan support in Washington D.C.," Kiernan said in a keynote speech. "Bipartisan support is a rare commodity these days."

More than 6,100 MW of offshore wind capacity is projected to be in commercial operation through 2027, according to S&P Global Market Intelligence data, and another 10,300 MW are in the development pipeline without a known estimated commercial operation date. Northeastern and mid-Atlantic states have stepped up efforts to attract offshore wind developers and supply chain players through renewable portfolio standards, research partnerships and other incentives. The federal government has spearheaded initiatives such as additional lease sales, an $18.5 million R&D consortium and introducing tried-and-true European methods into the U.S. permitting process to push the domestic sector forward.

However, industry players have suggested the federal government could do more to improve the regulatory and financial environment for offshore wind, such as opening up deeper waters for development and giving more clarity for lease sales for wind energy zones. Sen. Tom Carper, D-Del., said amending the tax law to improve the investment tax credit for offshore wind projects, such as his proposed bill to have a 30% ITC for the first 3,000 MW of offshore wind capacity, would create more clarity for the industry.

"As more interest grows in offshore wind across the country, so does the chance of getting this legislation signed into law," said Carper, who has introduced the bill every year since 2011.

Signals from the private sector, such as Vineyard Wind LLC's proposed levelized price of $65/MWh for power from its Vineyard Offshore Wind Project and Ørsted A/S' proposed $510 million acquisition of Deepwater Wind, indicate the robustness of the emerging sector.

Ørsted North America President Thomas Brostrøm said the industry is "at the dawn of an exciting new era for offshore wind" with the U.S. market. Ørsted sees increased demand for the energy source, particularly as it becomes more reliable and less costly. Its acquisition of the developer behind the United States' first offshore wind project, the Block Island Offshore Wind Farm, underscores the Danish developer and others' interest in setting up shop in the U.S.

"It is real," Brostrøm said. "We want to take a leading role."