US Releases Offshore Wind Liftoff Report and Promises Funding
The U.S. Department of Energy (DOE) has released its latest report in the Pathways to Commercial Liftoff series, describing how the U.S. offshore wind sector is adapting to challenges and poised for continued progress, with a path to deploying over 100 gigawatts (GW) by 2050.
The Pathways to Commercial Liftoff: Offshore Wind report finds that the sector today is poised for liftoff, enabled by continued efforts to adapt to recent market challenges. The projects that move forward in the next several years will lay the foundation for consistent long-term deployment, decarbonization, and economic benefits across the country in support of President Biden’s ambitious goals of achieving a 100% clean power sector by 2035 and a net-zero emissions economy by 2050.
“Offshore wind is already powering over 100,000 American homes, and with the Offshore Wind Liftoff Report and new investments, the Biden-Harris Administration is helping deliver on the promise of this technology to rapidly scale over the coming years,” said U.S. Deputy Secretary of Energy David Turk. “The offshore wind sector is making rapid progress even in the face of macroeconomic challenges, poising the industry to create good jobs and supporting a clean, resilient energy system.”
To help deliver on the potential of this industry, DOE announced its intent to fund $48 million in research and development projects for offshore wind technology development, domestic manufacturing. DOE has also announced its latest steps to support offshore wind transmission, including support for standardization needs and guidance development and a new analysis for the Gulf of Mexico.
The Pathways to Commercial Liftoff: Offshore Wind Deployment report analyzes market challenges and solutions already underway, finding that the sector is adapting to recent cost pressures and will see lower risk and costs as deployment scales over time.
Key insights include:
The U.S. offshore wind market is at an inflection point. Despite facing macroeconomic challenges, the sector is adapting, and improved risk mitigation is being built into industry planning. State leadership has been and will remain fundamental, as will federal policy, including use of long-standing tools and new resources made available through the Bipartisan Infrastructure Law and the Inflation Reduction Act.
The sector is poised for liftoff, beginning with the 10–15 GW of projects that have a path to final investment decision in the next few years. These projects will lay the foundation for consistent long-term deployment, decarbonization, and economic benefits across the country. Longer term, offshore wind can deliver over 100 GW of clean power by 2050.
While costs increased over the past few years, there is a path to cost reductions moving forward. Cost increases were driven by rapid inflation of equipment costs, rising interest rates, supply chain constraints, and schedule delays, but global cost headwinds have begun to stabilize and new offtake solicitations de-risk development going forward. Governments and industry are drawing on lessons learned, with ongoing efforts to refine project and supplier procurement, foster regional collaboration for supply chain and transmission planning, and make investments to support necessary enabling infrastructure.
Offshore wind is a central pillar of decarbonizing coastal population centers, and offtake costs reflect not only the cost to generate clean power, but also the cost to deliver power to coastal load centers (transmission) and the opportunity to revitalize maritime infrastructure and domestic manufacturing. Offshore wind power has a compelling and distinctive value proposition that complements other clean resources, with high capacity factors and strong winter production that support grid reliability and resource diversity.