Offshore wind is a quickly-advancing energy industry that, in the manner of just a few years, has become less expensive, is creating more electric power as well as more jobs and, importantly, will take pollution out of the air we breathe.
Offshore wind also is an energy source many Republican and Democratic politicians want in their states.
{mosads}Governors from both parties in New York, New Jersey, Virginia, Massachusetts, Maryland, Maine, Connecticut, Rhode Island, and California are beyond simply talking about offshore wind but also finalizing plans and finding ocean locations for turbines to generate electrical power.
President Trump’s Interior Secretary Ryan Zinke is supporting leaders and their offshore wind projects from both political aisles. At one of our forums, he characterized offshore wind as a “key part” of President Trump’s energy plan. “Of the current energy portfolio, probably wind has the greatest opportunity for growth,” Zinke said. “Let’s make American energy great. Let’s make sure we make wind energy great.”
The latest Advanced Energy Economy’s report found that advanced energy, such as offshore wind, is a rapidly growing global sector with a market size of $1.4 billion. The global growth rate of advanced energy is 7 percent as compared to the world’s economic growth rate of 3.5 percent in 2017.
Advanced energy within the U.S. has created 3.4 million jobs, which is more than twice of the nation’s established hotel and hospitality sector, which generated 1.4 million jobs. Our growing offshore wind projects will turn our ocean turbines into a new economic engine for the United States. Today, the offshore wind industry is developing from New York to California and on track to match Europe’s creation of 96,000 offshore wind-related jobs.
Meanwhile, offshore wind technology is building floating turbines to generate even more wind power and reduce more costs, compared to all forms of energy, including wind turbines with permanent foundations. The Business Network for Offshore Wind, which I head, recently met with Houston oil and gas officials to obtain their help in doing what they have already done in oceans to drill for oil and gas — create offshore floating foundations.
For 27 years, Europe has lead the way for offshore wind development, but today U.S. governors and the private offshore wind industry are pressing the pedal hard to move America forward. If just 20 states meet their current climate change and renewable portfolio standard goals, the U.S. can achieve 80 percent of its Paris Climate Accord commitment. Offshore wind is becoming an important part of coastal states’ energy mix to achieve these commitments and address electricity generation needs, resulting from retiring power plants.
Take New York. If New York meets its 2.4 gigawatts goal of offshore wind capacity by 2030, the emission-reduction alone will be worth $1.9 billion. Statewide, it could mean 13,000 or more jobs and investments totaling $6 billion. Cost equals about $10 a year for consumers, less than two tickets to the movies.
Like New York, New Jersey also is expected to hit the ambitious goal of securing 3.5 gigawatts of offshore wind energy generation by 2030. The state has two proposed offshore wind lease areas totaling 537 square miles off the coast. One of the projects could yield a capacity of as much as 1,000 megawatts (MW), enough to power 500,000 New Jersey businesses and homes.
Although the U.S. offshore wind industry is still young, state pricing contracts are already showing dramatic price declines.
Rhode Island’s Block Island Wind Farm, which became operational in 2016, has a contract electricity price of $0.22 per kilowatt hour (kWh). Last year, Maryland’s two offshore wind farm contracts came in at $0.134/kWh, a drop of almost 40 percent in one year.
Massachusetts announced this week the lowest energy price in the country. After passing a bill that doubles the state’s commitment from 1,600 MW to 3,200, the Massachusetts Department of Energy Resources announced that the Vineyard Wind project will cost only 6.5 cents kWh, 18 percent cheaper than other alternatives. All indications are that the current price negotiations for Rhode Island and Connecticut also will be in single-digit cents per kWh.
Jobs are a beautiful thing; but so are cost reductions, especially when compared with other energy sources.
Coal: Electricity prices for large-scale, offshore wind projects are quickly becoming more competitive than electricity produced from new coal plants which range in costs from $67 to $113 per megawatt hour (MWh), according to Bloomberg New Energy Finance.
Natural Gas: Once a few more wind farms are in the water, the offshore wind price will soon drop even further to be competitive with combined-cycle gas turbine plants, which range from $40 to $60 per MWh. Even though offshore wind may be on a par with combined-cycle gas turbines in terms of price, it’s far superior in other respects. Unlike gas, which is a commodity subject to market fluctuations, there are no fluctuations on the price of wind—it’s free!
Oil: Also, offshore wind has the lowest ‘cradle to grave’ carbon footprint, whereas gas and oil emit both carbon and methane, two hazardous greenhouse gases.
Scale is critically important to driving down costs. Larger wind facilities achieve economies of scale and give offshore wind developers greater commercial leverage to negotiate with the original equipment manufacturers. When states can aggregate projects together and provide developers with scale, the industry can achieve more favorable financing and supply chain economies, driving down costs further while simultaneously creating an abundance of jobs.
The United States may have been slow to initiate its domestic offshore wind market, but today it is rapidly developing into an industry that will create jobs, drive economic growth, reduce energy costs and help cleanup the environment from coast to coast.
Liz Burdock is Co-Founder and Executive Director of the Business Network for Offshore Wind.