Potential for offshore wind energy development in the Biden administration’s 30-gigawatt target for 2030.

Sean Deresh is an undergraduate student in the Vagelos Integrated Program in Energy Research studying earth science in the College of Arts and Sciences and chemical and biomolecular engineering in the School of Engineering and Applied Science at the University of Pennsylvania. He is a volunteer advocate with the Clean Air Council, a member of Penn Sustainability’s Student Advisory Group for the Environment, and an undergraduate student fellow at Penn’s Kleinman Center for Energy Policy. 

Sean is excited about the technical resource potential associated with offshore wind energy and its ability to help facilitate the U.S. transition towards clean energy. 

Even though the US has over 100 offshore wind farm projects currently in motion, only a fraction of them are currently operating, and this has been primarily due to push back from previous administrations driven by cost-prohibitions. In fact, the first offshore wind farm in the US started operating in 2018 off the Coast of Rhode Island.

Introduction 

We live in a world with higher-than-average mean global temperature driven by an enhanced greenhouse effect and increased atmospheric carbon dioxide and methane levels from the burning and extraction of fossil fuels. The existential consequences from climate change include (but are not limited to) rising sea levels, ocean acidification, wildfires, extreme weather events and conditions, resource security risks, and species extinctions. In the past million years, there has been a direct correlation between temperature and atmospheric CO₂ concentration. However, in recent decades, the CO₂ levels have been outside of the historical and pre-Industrial fluctuation bounds and correspond with fossil fuel usage. Additionally, the patterns observed in the temperature versus height profile for the atmosphere cannot be explained by an increase in solar radiation. Rather, the findings are consistent with the greenhouse effect, such that higher CO₂ levels lead to higher temperatures in the lower atmosphere, while the upper atmosphere gets colder (if it were due to more solar radiation, the entire atmosphere would have warmed up). Given the magnitude of the impending effects of climate change, many sectors have begun to explore other avenues for energy consumption that either reduce or eliminate greenhouse gas emissions. However, since we already have such an established economic and political energy system in the US, the shift towards clean energy is not as easy as one would expect. The current US energy policy landscape is still in a transitional phase in need of development. As the Biden administration begins to set ambitious goals for expanding renewable energy supply in the US, it is noteworthy to discuss the potential barriers that might arise during the process as well as how these challenges might be approached.

Current US Energy Landscape

The Energy Information Administration (EIA) summarizes both production and consumption of energy in the US (see Figure 1). Recent total US energy consumption has been, on average, about 100 Exajoules (EJ) per year and has roughly been equal to production, which has recently been valued at about 107 EJ, according to the EIA¹. This means that, in the US, an average energy source would need to supply nearly 7 EJ per year to make a significant impact on the energy budget. The fact that the US is a “net energy exporter” has contributed to the difficulty of most unconventional energy sources to rise to a production level that is comparable to the ones used since the Industrial Revolution. 

Figure 1. History of primary US energy consumption, production and imports, exports from 1950-2018. Source link.

The current per capita power consumption in the US can be estimated as we know that in 2020 the population was roughly 330 million people. It would take on average about 10 kW of continuous power to support the life of a US resident. In fact, the US spends roughly $1.2 trillion to extract this energy, and this is about 6% of our GDP in 2020 (US Department of Commerce). The usual question that comes to mind when realizing the magnitude of these numbers is about where the US obtains that much energy. As of 2020, the breakdown of energy sources in the US can be viewed in Figure 2, and the trends in consumption per source over time can be viewed in Figure 3. 

Figure 2. US primary energy consumption by energy source in 2020. Source link.

Figure 3. Annual US electricity generation by source between 1950-2020. Source link.

Fossil fuels (oil, natural gas, and coal) comprise 79% of primary US energy consumption, while renewables comprise a lower value of 12%². Coal consumption seems to have peaked around 2010 and has since been decreasing³. The energy portfolio of the US is one of fundamental importance as it relates to anthropogenic climate change. As the US continues to invest in fossil fuel extraction, refining, and usage, the rise in greenhouse gas emissions as a result from burning these fuels have been correlated to a rise in average global temperatures over time. We live in a “+1-degree Celsius” temperature anomaly world driven by an enhanced greenhouse effect and the increase of atmospheric carbon dioxide (CO₂) from burning fossil fuels. One of the ways in which we have mitigated the effects of climate change is to shift from using non-renewable energy sources such as fossil fuels to using renewables sources such as wind, solar, hydro, and others which do not release greenhouse gas emissions and can at times provide even more energy per given quantity than fossil fuels. 

How Wind Power Works

Roughly 1% of all solar power incident on Earth goes into moving air, generating what is known as wind power⁴. Even though only a small portion of this wind power is close enough to the surface to be usable, it has nevertheless been exploited to supply much of our current energy demands⁴. This has been primarily accomplished by using wind turbines, which use the power from air fluid flow to spin turbines and convert the air’s kinetic energy to useful electrical energy. They do so by rotating the aerodynamically designed rotor blades of the turbine to drive an electrical generator (see Figure 3). Typically, companies tend to generate what are called “wind farms” wherein a large quantity of turbines are placed with a given distance from each other to produce a bulk amount of energy. The same thing can be done in the ocean by placing offshore wind turbines (which tend to be more massive than land turbines) in the ocean. Offshore wind farms have the capacity to produce more energy than land wind farms due to the high power contained in strong ocean winds⁴. They also differ in transportation challenges when compared to land turbines, since offshore installation components can be transported on ships instead of on roads. Even though the US has over 100 offshore wind farm projects currently in motion, only a fraction of them are currently operating, and this has been primarily due to push back from previous administrations driven by cost-prohibitions. In fact, the first offshore wind farm in the US started operating in 2018 off the Coast of Rhode Island (see Figure 4).

Figure 3. How Wind Turbines Work. Source link.

Figure 4. The first US Offshore wind farm. Source link.

The largest wind power era began during the late 1990’s, as concerns over increased carbon dioxide emissions and energy independence made governments devise new mandates and subside industrial development⁴. Through time, wind power has become an energy source that is now competitive with fossil fuel electricity and can even be cheaper in some circumstances. In 2019, wind power passed hydropower as it became the largest renewable electricity source in the United States, and it continues to rise as a promising energy source. 

The 30-gigawatt Goal

The US lives amid shifting political currents which have impeded the ability to design mainstream sustainable climate leadership. Energy policy was a major component of the 2020 Presidential Election, as the primary candidates (Donald Trump and Joe Biden) had widely different views on the subject. Effective communication and US energy policies have the potential to shift knowledge and attitudes towards climate change, and the development of such policies requires an understanding of the relationship between climate change and global health to secure a sustainable future for our planet. During the 2020 presidential election, Biden proposed investment in a green jobs program for renewable energy infrastructure, called for ending the use of fossil fuels by 2035, vowed to make the US carbon neutral by 2050, and promised to rejoin the Paris Climate Agreement (which he did).

In his first week of office, President Biden issued an Executive Order that called for the US to build new infrastructure and a clean energy economy; in particular, the Order committed to expand offshore wind industry opportunities^5,6. In March of 2021, the Interior, Energy, Commerce, and Transportation Departments announced new funding, leading, and development goals to deploy and accelerate offshore wind energy. According to the White House press release statement, the hope is to catalyze offshore wind energy (which has been lacking in proper direction in the US until recently), create new jobs, and strengthen domestic supply chains to “position America to lead a clean energy revolution”⁷.  

The Interior Department’s Bureau of Ocean Energy Management (BOEM) announced a new Wind Energy Area of nearly 800,000 acres⁸ in the New York Bight, which is relatively shallow and between Long Island and the New Jersey Coast (see Figure 5), and a plan to publish a Proposed Sale Notice, followed by a public comment period and a lease sale⁷. The Department of Interior (DOI), Energy (DOE), and Commerce (DOC) also announced a goal of deploying 30 gigawatts of offshore wind in the US by the year 2030. It is anticipated that meeting the target will cost more than $12 billion per year in project investments on both coasts of the US, employ more than 44,000 workers in offshore wind by 2030, and about 33,000 additional jobs in communities near offshore wind activity⁷. BOEM also announced a Notice of Intent to prepare Environmental Impact Statements for the Ocean Wind project, which proposed a total capacity of 1,100 megawatts. Additionally, access to $3 billion in debt capital will be given to support offshore wind industries through the DOE Loan Programs Office⁷. 

Figure 5. BOEM New York Bight overview map. Source link.

A review of the potential physical, economic, and developmental components of offshore wind power is of fundamental interest in relation to the ambitious 30-gigawatt plan proposed by the Biden administration. 

Economics and Policy:

It is expected that offshore wind power should in theory be feasible for supplying a substantially increased percentage of energy consumption demands in the US. The cost of wind energy is primarily driven by the initial capital costs of construction. An estimate of the capital costs needed to make offshore wind power competitive with the cost of electricity for other sources is of interest, as it is known that the cost of transmission and construction of offshore wind turbines is considerably higher than other renewable sources. 

One of the barriers to the ample deployment of offshore wind turbine farms are the high installation and construction costs. Offshore wind generation costs are still considerably higher than those of onshore turbines, but recent data suggests that the increase in offshore installation trends may have peaked. A 2015 report from the National Renewable Energy Laboratory (NREL) tracked the costs of numerous projects in Europe, US, and elsewhere, as well as the capacity data scaled by project size (see Figure 10)¹². 

Figure 10. Yearly installed costs of offshore wind (capacity-weighed). Source link.

The gradual improvements of costs over time for offshore wind turbine installation and installation was projected to continue until the year 2020. In fact, recent data¹³ suggest the expectation that future onshore and offshore wind costs will decline 37-49% by 2050, resulting in costs 50% lower than predicted in the previous 2015 studies. The 2021 study from Nature predicts that the decline will be a function of cost reductions witnessed in previous years and the predicted continued advancements in technology.  

Additionally, the Department of Energy has recently identified 4 key trends¹⁴ in offshore wind (see Figure 11):

• Decreasing offshore auction prices on a global scale,
• Increasing water depths of offshore projects,
• Increasing turbine capacity,
• Decreasing global levelized cost of energy for offshore wind.

Figure 11. Top: Turbine capacity (MW) versus operation date through 2025. Bottom: Global levelized cost of energy estimates for offshore wind (fixed bottom). Source link.

As of June 2021, Europe had a total of 5,400 offshore wind turbines, while the US had exactly seven⁶. Legal, environmental, and economic obstacles in the US have stood in the way of offshore wind power development, even though the Nation has plentiful places around the coasts in which to use this clean energy source. Due to a combination of a shortage of ships large enough for turbine equipment hauling, fishermen’s worries regarding the impact of offshore wind on their livelihoods, and the centuries-old Jones Act that prohibits wind farm developers from launching foreign-made construction vessels, the US has failed to see considerable offshore wind development. Even though the cost per unit energy is higher than terrestrial solar and wind farms, this is balanced in offshore wind farms due to the low cost of transmission. Thus, there is a trade-off between the urgent need to address climate change and the President’s goals of creating more jobs, since if we were to repeal the Jones Act’s protections for domestic shipbuilding, this would undercut the administration’s promises of employment⁶. 

Britain is one of the world’s largest offshore wind power users. In 2021, Britain’s offshore wind turbines had 8 GW of capacity, a third more than Germany, which was the next-biggest offshore market¹⁵. According to BloombergNEF (an energy data firm), Britain is projected to have 30 GW offshore wind power capacity, second to China (see Figure 12)¹⁵. 

Figure 12. Left: Cumulative offshore wind capacity forecast. Right: GDP and carbon dioxide emission trends for Britain between 1990 and 2018. Source link.

Due to both favorable geographical conditions and policy initiatives, Britain has seen a recent boom in offshore wind power deployment. Since 2008, Britain’s Climate Change Act required greenhouse gas emissions in 2050 to be at least 80% below the level in 1990, and its politicians have favored offshore wind and have provided funding for research and blade testing facilities in Northumberland¹⁵. With financial support to early-stage wind farms, long company contracts with incentive to invest, and the maturing of the industry over time, Britain’s offshore wind capacity has grown 20-fold as it now comprises ¼ of renewable energy production. With this success, the British government announced an agreement to hold auctions every two years, in return for cutting costs and reduced impact on the taxpayer. In 2019, Britain’s Committee on Climate Change suggested that offshore wind power capacity may reach 75 GW by 2050, which would require about 180 of the biggest turbines to be installed each year until 2050¹⁵. 

Offshore wind energy does hold the promise of significant environmental or economic benefits for the US. As an abundant, low-carbon, domestic energy source, offshore wind power has the capacity to produce energy at long term fixed costs which are known to reduce electricity prices and improve energy security. However, pursuing the benefits of such a clean energy resource will require the US to overcome critical challenges via reducing the costs and risks associated with offshore deployment, supporting stewardship of US waters by creating regulatory certainty and mitigating environmental risks of offshore development, and increasing understanding of costs and benefits from such an energy source. 

The US has taken steps towards a low-carbon future via its participation in the Paris Climate Conference, promulgation of the Clean Power Plan, and legislative action such as extensions of renewable energy production and investment tax credits. Given that the offshore wind market has matured at a rapid pace in Europe and that its costs are falling, this suggests that the source can now play a substantial role as a clean, domestic energy source at large scale for the US. 

The following reasons could thus be derived to argue why offshore wind energy represents a significant opportunity for the US¹⁶:

• Offshore wind resources are abundant and natural.
• There exist a vast quantity of siting and development opportunities in US waters.
• There is an impending need for offshore technology in coastal states given higher electricity demand and scheduled power plant retirements.
• Offshore wind development has the capacity to lower wholesale electricity prices in many markets due to its low marginal cost of production. 
• Offshore wind industries lead to significant positive environmental and external economic benefits such as reduced emissions, decreased air pollution, reduced water consumption, greater energy diversity, and increased employment. 

The following challenges remain with regards to offshore wind energy¹⁶:

• Without subsidies, the cost of offshore wind energy is too high to compete in US markets.
• More effective stewardship of US ocean and Great Lakes resources is needed for developing sustainable offshore wind industries.
• There needs to be a better understanding of the impacts of offshore wind on the electricity grid, electricity costs, and environmental externalities.

Email: sderesh@sas.upenn.edu

References:

[1] Sanchez, Bill. “U.S. Energy Consumption, Production, and Exports Reach Record Highs in 2018.” U.S. Energy Information Administration (EIA), 8 May 2019, https://www.eia.gov/todayinenergy/detail.php?id=39392.

[2] “U.S. Energy Facts Explained.” U.S. Energy Information Administration (EIA), 14 May 2021, https://www.eia.gov/energyexplained/us-energy-facts/.

[3] Francis, Mickey. “Renewables Became the Second-Most Prevalent U.S. Electricity Source in 2020.” U.S. Energy Information Administration (EIA), 28 July 2021, https://www.eia.gov/todayinenergy/detail.php?id=48896.

[4] Bernstein, Gary. Energy, Oil, and Global Warming.

[5] Friedman, Lisa, and Brad Plumer. “Biden Administration Announces a Major Offshore Wind Plan.” The New York Times, 29 Mar. 2021, https://www.nytimes.com/2021/03/29/climate/biden-offshore-wind.html?searchResultPosition=1.

[6] Penn, Ivan. “Offshore Wind Farms Show What Biden’s Climate Plan Is Up Against.” The New York Times, 7 June 2021, https://www.nytimes.com/2021/06/07/business/energy-environment/offshore-wind-biden-climate-change.html.

[7] FACT SHEET: Biden Administration Jumpstarts Offshore Wind Energy Projects to Create Jobs.” The White House, The United States Government, 29 Mar. 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/29/fact-sheet-biden-administration-jumpstarts-offshore-wind-energy-projects-to-create-jobs/.

[8] “New York Bight.” Bureau of Ocean Energy Management, https://www.boem.gov/renewable-energy/state-activities/new-york-bight.

[9] Wilkes, James O., et al. Fluid Mechanics for Chemical Engineers: with Microfluidics, CFD, and COMSOL Multiphysics 5. Prentice Hall, 2018.

[10] “Haliade-X Offshore Wind Turbine.” GE Renewable Energy, https://www.ge.com/renewableenergy/wind-energy/offshore-wind/haliade-x-offshore-turbine.

[11] Bennett, James. “New York Bight Area Identification Memorandum Pursuant to 30 C.F.R. § 585.211(b).” Bureau of Ocean Energy Management (BOEM), US Department of the Interior, 26 Mar. 2021, https://www.boem.gov/sites/default/files/documents/renewable-energy/Memorandum for Area ID in the NY Bight.pdf.

[12] Milborrow, David. “Global Costs Analysis — the Year Offshore Wind Costs Fell.” Windpower Monthly, 16 Sept. 2016, https://www.windpowermonthly.com/article/1380738/global-costs-analysis-year-offshore-wind-costs-fell.

[13] Wiser, R., Rand, J., Seel, J. et al. Expert elicitation survey predicts 37% to 49% declines in wind energy costs by 2050. Nat Energy 6, 555–565 (2021). https://doi.org/10.1038/s41560-021-00810-z.

[14] “Top Trends in Offshore Wind.” Department of Energy (DOE), 30 Aug. 2021, https://www.energy.gov/eere/wind/articles/top-trends-offshore-wind.

[15] “Lessons from Britain, the World’s Biggest Offshore Wind Market.” The Economist, 21 Sept. 2019, https://www-economist-com.proxy.library.upenn.edu/britain/2019/09/21/lessons-from-britain-the-worlds-biggest-offshore-wind-market.

[16] National Offshore Wind Strategy. DOE, DOI, 2016.
[17] MacKay, David. Sustainable Energy – without the Hot Air. 2016.