Offshore Wind in the United States

Introduction

Across the United States, wind turbines dot horizons with large, sweeping blades and the reassuring hope of renewable energy. These looming structures overwhelmingly concentrate on land, where wind-abundant states serve as clean powerhouses for the rest of the country. However, with an ever-increasing demand for clean energy, policymakers and other stakeholders are looking to the exciting opportunities that offshore wind presents. Earlier this year the Biden Administration announced new leasing, funding, and development goals for offshore wind projects. While the 30MW Block Island Wind Farm off the coast of Rhode Island is the nation’s only commercial offshore wind project, an additional 2,000 Gigawatts of coastal wind potential remains to be utilized.

The U.S. is in a unique position to follow in the footsteps of offshore wind leaders. This briefing aims to examine the ongoing barriers to and opportunities for U.S. offshore wind. It concludes with three policy and practice recommendations.

Navigating Bureaucracy

With strong wind speeds along the East and West coasts of the continental United States, it is a wonder that policymakers and wind companies have waited so long to capitalize on the country’s offshore wind potential. In the past few years, the cost of offshore wind has at last reached a decline following a decade of prohibitive costs and technical challenges. In large part, the delay in offshore wind development is attributed to regulatory uncertainty and strong—sometimes well-funded—public opposition in response to societal and environmental tradeoffs.

For the former roadblock, siting and operating turbines in open, ambiguous waters prove to be a complex matter regarding jurisdiction, funding, and administration. A government lease needs to be obtained by a private company to develop a project on public land or in public waters. The Bureau of Ocean Energy Management (BOEM), the main federal agency responsible for reviewing construction and operations permits, has eleven projects totaling 9GW in queue for approval as of March 2021. The commissioning of these projects are anticipated to be between 2025 and 2030.

Social and Environmental Considerations

Meanwhile, these offshore projects are a contentious topic in seaside communities. Residents tend to resist the visual nuisance of turbines on their coveted coastlines, even if they are generally proponents of renewable energy. Moreover, local stakeholders criticize that obstructed aesthetics burden revenue-generating tourism, while ecological disruptions affect boating and fishing businesses. Conservationists are also wary of the ecological effects above and below the water. Rotating blades threaten birds and bats that might fly into them, and the foreign presence of substructures near the ocean floor could lead to external stresses on the surrounding ecosystem. For marine life, there are serious concerns of cable entanglements from floating turbines, construction noise disturbance, and displacement of species.

However, boat tours to offshore wind farms actually attract tourists to the area. This novel type of environmental tourism doubles as an educational campaign. As sightseers marvel at the technological feats, they are encouraged to learn more about the benefits of wind power, which in turn heightens public acceptance. For example, the aforementioned Block Island Wind Farm offers informational ferry tours to the public. Offshore wind turbines may even create habitats that, though may not replicate the previous ones, can offset the loss from construction. In fact, analyses reveal that the most common turbine design, the monopile, produces more habitat area through the introduction of new surface area. With different substructures—correlated to shore proximity and ocean floor type—come different changes in marine habitats.

Researchers, engineers, and developers are working to implement other ecological solutions as well. To address concerns for bird safety, scientists concluded that taller, fewer, and larger turbines minimize collision risk. Available flight pattern data on vulnerable bird populations must guide the siting of these projects. Vineyard Wind, the first large-scale U.S. offshore wind farm, is also experimenting with air bubbles to mitigate sonic stressors on marine life. While significant progress has been made, further environmental impact assessments will be critical for the road ahead.

Subsidies and Self-Sufficiency

On the financial front, current projects heavily depend on tax credits, which is why the American government has continuously extended the wind production tax credit for over two decades. There are several tax credit variations. For instance, the Renewable Electricity Production Tax Credit (PTC) targets land-based and offshore project owners and developers by providing federal income tax credit for the quantity of electricity generated, whereas the Business Energy Investment Tax Credit (ITC) rewards capital investments with a one-time credit. The New Markets Tax Credit (NMTC) aids community development, job creation, and economic growth in underserved areas through individual or corporate investments. These incentives are overwhelmingly geared towards private investment, often by larger companies looking to build utility-scale projects.

Meanwhile, there are two active programs that support smaller-scale ownership. For residential wind power systems of 100 kilowatts or less, taxpayers can receive the Residential Renewable Energy Tax Credit through a gradual phase-down model over 10 years. Although the ITC offers credit for wind power of this size too, it differs in its explicit promotion of renewable electricity for homeowners rather than private companies. Additionally, farmers, ranchers, and rural small business owners may benefit from the 2009 Rural Energy for America Program (REAP), which aims to bolster national energy independence through loans and grants for both small and large projects.

Advancements are also being made on the supply chain side through the National Offshore Wind Research and Development Consortium. The Consortium of national and state actors is spearheading a project that will identify gaps in the supply chain system and publish a roadmap for improvements in the next year. Right  now, over 500 domestic manufacturing facilities already contribute to U.S. wind development capabilities. Growing and streamlining the supply chain will be integral to achieving a cost-competitive market, increasing affordability, and expanding self-sufficiency for all types of wind power.

The Path Forward: Policy and Practices Recommendations

The U.S. must work through a number of challenges in the coming years to grow its offshore wind. First, garnering public approval will involve intentional, transparent, and robust educational campaigns about the advantages of offshore wind. A study on a proposed Cape Cod wind farm reveals that educational endeavors even long after a project’s initial proposal affect the public’s perception. Moreover, using community input at developer meetings can address common concerns from locals by informing the decision-making process.

Second, developers should continue researching and developing eco-friendly siting, construction, and operation practices. These methods must fit the local ecosystems and habitats in which projects are built because infrastructure for one coast will not be suitable for another. For example, the steep drop-off of California’s continental shelf calls for floating offshore wind platforms in the Pacific.

Third, the U.S. government needs to provide financial support for both manufacturing and development. The success of Germany, which globally ranks second in offshore wind capacity, demonstrates the importance of a cost-competitive supply chain and domestic manufacturing base to provide market stability. Complementary policies implementing phased-out tax credits and feed-in tariffs—as exemplified by Germany’s Renewable Energy Sources Act—must simultaneously incentivize widespread investment until the burgeoning industry reaches maturity.

In sum, the future of offshore wind in the U.S. will play a key role in achieving renewable energy goals, but the pathway there will require a multi-faceted approach. One of these approaches may even include community ownership, through which community members access decision-making power, electricity price stability, and distributed generation benefits. This management structure has flourished in European countries like Germany and Denmark, where over 75% and 80% of citizens own turbines, respectively. With the proper policies, it can in the U.S. too. However, one fact is clear regardless of ownership model: the U.S. cannot wait any longer to harness its offshore wind.