U.S. Atlantic Coast Offshore Wind Development

Introduction

The U.S. offshore wind industry is nascent with only seven wind turbine generators (WTGs) currently in operation, totaling 42 MW. Nationally, the United States has 4.5 terawatts in potential wind energy resources. While projects have been announced in the Gulf of Mexico and along the Pacific Coast, the vast majority of U.S. offshore wind project development is occurring along the Atlantic Coast. Currently, there are 35 projects along the East Coast totaling more than 40,000 MW, most of which are expected to come online by 2030.

The first five turbines were installed in 2016 off Block Island, RI, where they generate 30 MW of clean power for approximately 17,000 homes. The small island was previously powered by five diesel generators. Residents of Block Island have observed no negative impact on bird populations, fishing, or tourism; in fact, tourists are generally eager to see the turbines from shore, and the underwater foundations provide structure for new marine habitats to form.

Dominion Energy’s utility-scale Coastal Virginia Offshore Wind (CVOW) began with two demonstration turbines 27 miles from Virginia Beach. Installed in 2020, CVOW’s demonstration turbines were the first in federal waters and will be joined by an additional 176, which are expected to be operational by 2027.

The past three presidents have all acted on offshore wind. In 2016, President Obama unveiled the nation’s first strategy on offshore wind development, referencing the industry’s untapped potential. President Trump ordered a 10-year moratorium on leasing for offshore energy, including both fossil fuels and wind, from North Carolina through Florida. President Biden not only lifted this moratorium in 2022, but also established a federal goal of 30,000 MW of offshore wind by 2030. This goal was followed by commitments from the White House to invest in the domestic supply chain and workforce development programs.

Unlike solar PV and onshore wind, offshore wind profitability has been shaky in recent years, especially in the United States. For example, approximately 7 GW of planned capacity was outright canceled with another 4 GW under contract renegotiations. These challenges have been attributed to rising inflation, supply chain disruptions, and domestic permitting obstacles.

Map of offshore wind speeds for U.S. waters, as estimated by the National Renewable Energy Laboratory.

Typical fixed-bottom offshore wind farm showing the technology that will be most common in Atlantic projects, like Dominion Energy's Coastal Virginia Offshore Wind.

Current System Description

Operating power capacity along the U.S. Atlantic coast, as of April 2024.

Prospective power capacity of the U.S. Atlantic coast, as of April 2024.

Renewable Targets

In March 2021, President Joe Biden established an offshore wind generation goal of 30 gigawatts (30,000 MW) by 2030. Additionally, in September 2022, President Biden set a goal of 15,000 MW of floating offshore wind by 2035. While floating wind is relatively new and still under development, this technology is well-suited for deep waters in the Gulf of Maine and outer continental shelf, and it significantly increases the areas where offshore wind might exist. Both of these announcements represent critical steps toward transitioning into a carbon-free electricity sector by 2035, as called for by executive order.

In addition to federal offshore wind goals, several states have made offshore wind commitments, including Massachusetts (5,600 MW by 2027), New York (9,000 MW by 2035), New Jersey (11,000 MW by 2040), Maryland (8,500 MW by 2031), Virginia (5,200 MW by 2035), and North Carolina (2,800 MW by 2030; 8,000 MW by 2040).
Moreover, Atlantic states have also made the following greenhouse gas reduction targets:

• Maine: 45% GHG reduction below 1990 levels by 2030; 80% reduction by 2050
• New Hampshire: 20% GHG reduction below 1990 levels by 2025; 80% reduction by 2050
• Massachusetts: 33% GHG reduction below 1990 levels by 2025; 100% reduction by 2050
• Rhode Island: 45% GHG reduction below 1990 levels by 2030; 100% reduction by 2050
• Connecticut: 45% GHG reduction below 2001 levels by 2030; 80% reduction by 2050
• New York: 40% GHG reduction below 1990 levels by 2030; 85% reduction and 15% offset by 2050
• New Jersey: 50% GHG reduction below 2006 levels by 2030; 80% reduction by 2050
• Delaware: 26-25% GHG reduction below 2005 levels by 2025
• Maryland: 40% GHG reduction below 2006 levels by 2030; 60% reduction by 2031; 100% reduction by 2045
• Virginia: 100% GHG reduction by 2045
• North Carolina: 40% GHG reduction below 2005 levels by 2025; 10% reduction by 2030; 100% reduction by 2050
• South Carolina: None
• Georgia: None
• Florida: At 1990 levels by 2025; 80% reduction below 1990 levels by 2050

With the exceptions of Florida and Georgia, all states along the Atlantic Coast have Renewable Portfolio Standards, with all but South Carolina's being mandatory rather than voluntary. These policies have fostered greater renewable development by encouraging electricity providers to both build and source clean energy.

Offshore Wind Projects

Atlantic Projects and Wind Energy Areas

Project	Capacity (MW)	Status	State
Atlantic Shores Offshore Wind Bight	1,284	Announced	New York
Atlantic Shores South Wind Project, Phase 1	1,510	Pre-Construction	New Jersey
Atlantic Shores South Wind Project, Phase 2	1,327	Pre-Construction	New Jersey
Attentive Energy One wind farm	1,400	Announced	New York
Bay State wind farm	2,000	Announced	Massachusetts
Beacon wind farm	1,230	Pre-Construction	New York
Block Island wind farm	30	Operating	Rhode Island
Coastal Virginia Offshore Wind (CVOW) Commercial Project	2,640	Pre-Construction	Virginia
Coastal Virginia Offshore Wind (CVOW) Pilot Project	12	Operating	Virginia
Empire Wind Farm, Phases 1 and 2	2,076	Pre-Construction	New York
Floating Demonstration wind farm	10	Pre-Construction	Massachusetts
Hudson North Wind Energy Area	697	Announced	New York
Hudson South Wind Energy Area	1,700	Pre-Construction	New York
Kitty Hawk wind farm, Phases 1 and 2	3,265	Pre-Construction (Phase 1) and Announced (Phase 2)	North Carolina
Liberty wind farm	2,143	Pre-Construction	Massachusetts
Maryland Offshore Wind Farm	2,200	Pre-Construction	Maryland
MarWin wind farm	300	Pre-Construction	Maryland
Momentum wind farm, Phases 1 and 2	809	Pre-Construction	Maryland
New England Aqua Ventus wind farm	12	Pre-Construction	Maine
New England Wind, Phases 1 and 2	2,154	Pre-Construction	Massachusetts
Ocean (Ørsted) wind farm, Phases 1 and 2	2,363	Cancelled	New Jersey
Revolution Wind	704	Pre-Construction	Massachusetts
Skipjack wind farm, Phases 1 and 2	966	Pre-Construction	Maryland
South Fork (Ørsted) wind farm	132	Construction	New York
SouthCoast Wind, Phases 1 and 2	1,204	Pre-Construction	Massachusetts
Sunrise wind farm	924	Pre-Construction	Massachusetts
Vineyard Wind	800	Construction	Massachusetts
Wilmington East Wind Energy Area	893	Pre-Construction	North Carolina
Wilmington West Wind Energy Area	889	Pre-Construction	North Carolina

Leases, wind energy areas, and call areas under exploration for offshore wind development, as presented in the 2022 Offshore Wind Market Report

Finalized offshore wind energy areas (WEAs) in the Central Atlantic, as announced in July 31, 2023. The WEAs total approximately 356,550 acres and may generate between 4,000 and 8,000 MW of clean power.

Offshore Wind Project Updates

• Ørsted abandoned its Ocean Wind projects in late 2023, but the developer is planning to sell its lease areas off the coast of Southern New Jersey.
• In July 2024, Avangrid sold its Kitty Hawk North offshore wind lease area to Dominion Energy for $160 million (now called CVOW South).
• Equinor and Dominion Energy were awarded leases off the coast of Virginia, Maryland, and Delaware in August 2024. The auction netted $93 million total with six companies participating total. Project capacities have yet to be determined.
• Eight lease areas in the Gulf of Maine will be leased in October 2024, which will likely see the installation of floating wind turbines.

Fossil Resources and Retirement

Currently, this region of the United States has an estimated 29,834 MW of coal and 179,046 MW of natural gas in operation. Approximately 41,500 MW and 4,600 MW of coal and natural gas have been retired, respectively. In March 2024, Granite Shore Power announced the retirement of its Merrimack Station in Bow, New Hampshire, which represents the retirement of New England's last operating coal plant. Nationally, the United States also imports significant quantities — 8.32 million barrels per day in 2022 — of petroleum, primarily from Canada (52%), Mexico (10%), Saudi Arabia (7%) Iraq (4%) and Colombia (3%). In 2024, the 1,413-MW Mystic Generating Station, which has provided power to Boston since the 1940s, will retire and represent 60% of the year's natural gas retirements.

The U.S. Atlantic Coast was the proposed site for the now-canceled Atlantic Coast Pipeline, which would have stretched 600 miles and devlivered 1.5 billion cubic feet of natural gas per day to customers in West Virginia, Virginia, and North Carolina. The Pipeline was met with significant pushback from advocates and community members alike due to its potential impacts on sensitive lands and ecosystems, waterways, and health of residents living near the site. The project was canceled in July 2020.

Employment

Current employment by sector

Since so few turbines are in operation in the United States, very few workers are currently employed in offshore wind. However, current and upcoming projects can give a sense of employment opportunities once the industry is more established. During construction, the Block Island Wind Farm in Rhode Island supported 300 local jobs. Kitty Hawk Wind expects to create 736 jobs during construction and 900 new jobs through operations, maintenance, and decommissioning. Dominion Energy's Coastal Virginia Offshore Wind farm projects 900 direct and induced jobs created, most of which will be local.

While few workers are currently employed in the industry, several careers require skills similar to those used in offshore wind planning, construction, operation, and maintenance, meaning these career paths can transition into the industry once opportunities arise. For example, electricians, maritime welders, construction laborers, machinists, and shipbuilders can all support offshore wind with skills already applied in their careers.

From the IRENA's report in 2023, the number of employment in the wind sector was 126,000 from both onshore and offshore wind sectors.

Prospective employment in offshore wind

U.S. offshore wind employment statistics are dependent upon domestic content requirements. According to the National Renewable Energy Laboratory's U.S. Offshore Wind Workforce Assessment, between 15,000 and 58,000 jobs will be required annually by 2030 to meet 25% and 100% domestic content requirements, respectively. These jobs range across: development, i.e. roles associated with siting, permitting, and supporting services; manufacturing; ports and staging; construction; and operations and maintenance. Critical gaps include a shortage of apprenticeships and workforce development programs, a lack of standardized industry certifications, and specific support for transitioning oil, gas, and maritime employees.

The National Renewable Energy Laboratory predicts that approximately 10,000 jobs will be created through current offshore wind pipelines, though that figure is expected to increase with domestic content requirements.

Workforce Development Programs

The following represents a non-exhaustive list of workforce development programs that exist along the U.S. Atlantic Coast, many of which have been funded by a combination of public and private sources.

• Offshore Wind Training Institute (OWTI): Hosted by the State University of New York (SUNY) system, OWTI intends to identify gaps in creating an offshore wind labor force and promote opportunities for potential students.
• Ocean Wind Pro-NJ Grantor Trust: The Trust intends to help small, women-owned, and minority-owned businesses in New Jersey retool operations and transition into the offshore wind industry.
• Hampton Roads Workforce Council EDA Grant: The Hampton Roads Workforce Council received $11 million from the American Rescue Plan Good Jobs Challenge to work with other nonprofits, academic institutions, and government partners in Virginia and North Carolina to create a pipeline of blue economy workers.
• Maryland Department of Labor EDA Grant: The Maryland Department of Labor received $22.9 million from the American Rescue Plan Good Jobs Challenge to bring together employers and union leadership to build a training model for the future offshore wind labor force, with a specific focus on helping transition formerly incarcerated individuals into these roles.
• North Carolina Agricultural and Technical State University (NC A&T) EDA Grant: NC A&T received $23.7 million from the American Rescue Plan Good Jobs Challenge to establish the STEPs4GROWTH workforce training program, intended to expand pre-apprenticeship programs and increase access to career opportunities in clean energy jobs.
• Orsted and NJ Institute of Technology (NJIT) Memorandum of Understanding: In 2021, Orsted and NJIT established a 10-year partnership to create a $1.5 million scholarship to address educational gaps and support entrance of underrepresented communities in the offshore wind industry.

In addition to these efforts, several colleges, universities, and technical schools in the region offer degree and certification programs required for offshore wind's technical work, and there are eight Global Wind Organisation certified facilities along the Atlantic Coast.

Supply Chain

The National Renewable Energy Laboratory predicts that at least $22.4 billion in supply chain investments will be required to meet demand in 2030, with the greatest investments needed in vessels and ports.

According to their 2023 Supply Chain Road Map for Offshore Wind Energy in the United States, the National Renewable Energy Laboratory (NREL) predicts the United States will need at least 34 new manufacturing facilities and domestic supply chain investments of at least $22.4 billion in order to meet existing project pipelines and expected 2030 demand. In the same report, NREL identifies several key challenges to supply chain expansion:

• Construction delays, cost overruns, legal and regulatory obstacles, and changes in governmental support for offshore wind create project uncertainty.
• Limited port space exists for staging and manufacturing, and as new technology develops, existing facilities creating smaller capacity components might become obsolete in coming years.
• Raw material constraints.
• The United States largely lacks the specialized workforce needed for highly technical offshore wind construction, operations, and maintenance work. Few training programs currently exist, and those that do may not have projects for graduates to work on for another few years.
• Additional incentives, like those presented in the Inflation Reduction Act (2022), might be required to support project financing.
• Equity and sustainability must be centered in supply chain planning so as to avoid unjust outcomes for host communities.

Offshore wind vessels in particular present unique challenges. Offshore wind vessels are specialized and require high upfront capital costs, coastal space for construction, and a consistent pipeline of contracts in order for the investment to seem attractive. Additionally, The Jones Act, which was passed in 1920, requires vessels carrying merchandise domestically be U.S.-flagged, but the United States lacks heavy-lift installation vessels required for offshore wind construction. Understanding these needs, several supply chain developments are completed or underway:

• Charybdis: Under construction by Dominion Energy, Charybdis will be the first offshore wind installation vessel based in the United States. Construction should be complete by the end of 2024.
• ECO EDISON: Under construction by Orsted, Enersource, and Edison Chouest Offshore, ECO EDISON will be the first offshore wind service vessel based in the United States. Construction should be complete by the end of 2024.
• Siemens Gamesa blade finishing plant in Portsmouth, Virginia
• Siemens Gamesa turbine nacelle facility in Albany, New York
• EEW Group monopile production mill in Paulsboro, New Jersey
• Prysmian Group submarine cable manufacturing facility in Somerset, Massachusetts
• Nexans submarine cable manufacturing facility in Charleston, SC
• Offshore Wind Capital Expenditure Program, which was created by Maryland Energy Administration to help new suppliers in the offshore wind supply chain, as well as support retooling for existing businesses.

Coordinated regional efforts, like the SMART-POWER partnership described below, are intended to ensure coordination amongst private, state, and federal decision-makers to maximize the impact of investments.

Land Availability

Along the Atlantic Coast, several stakeholder groups have expressed concern over the impacts of project footprints on other ocean uses. For example, the U.S. Department of Defense has objected to initial wind energy area maps in the Central Atlantic, naming impacts on military activities. Also, many of the U.S. projects along the Atlantic Coast overlap with high-density transit and shipping lanes, so mariners have raised questions around impacts on navigation and safety. Moreover, coastal Indigenous communities have called for a full offshore wind moratorium until a full and transparent procedure for Tribal Nations' engagement is published.

Legislators, regulators, and other state and federal bodies are working closely with these and other stakeholders to ensure coordination across different ocean uses. The Bureau of Ocean Energy Management has a robust public comment system to collect feedback from stakeholders, and throughout the siting and permitting process, meets regularly with stakeholders to gain information on concerns and potential conflicts. Additionally, fisheries compensation funds are under discussion to make up for wages that may be lost through offshore wind construction and operations.

Several public-private partnerships have coordinated funding for ports and land redevelopment necessary for standing up the offshore wind industry along the U.S. Atlantic Coast. Five New York ports have been tapped by developers for specific manufacturing, assembly, and staging needs, and the State has committed $700 million for upgrades. In Rhode Island, the South Quay Marine Terminal is in the midst of a $35 million upgrade for offshore wind staging or marshalling, i.e. a storage area for components prior to and during construction. In New Jersey, the nation's first Wind Port is under construction and will boast ample space for marshalling and laying components, no vertical restrictions, and geographic proximity to more than 50% of existing and upcoming wind energy projects. For projects located further south, the Portsmouth Marine Terminal in Portsmouth, VA is undergoing a $223 million redevelopment to prepare for offshore wind staging.

Environmental and Social Impacts

Overview of current fossil fuel impacts

According to the U.S. Energy Information Administration, in 2021, Atlantic states accounted for approximately 19% of American carbon emissions. These emissions have been shown to cause harmful health and environmental outcomes, in addition to land degradation caused by mining coal and extracting and transporting natural gas.

Two primary forms of coal mining are used in the United States: surface mining, which is appropriate for veins a few hundred feet deep, and underground mining, which might reach thousands of feet deep. In particular, mountaintop removal mining, a form of surface mining, is particularly destructive to the environment. In mountaintop removal, the tops of mountains are removed entirely to reach seams of coal beneath, and once mining is completed, topsoil is replaced. Through this process, toxic materials like cadmium, selenium, arsenic, and silica may enter the air and nearby streams, which can directly impact aquatic species populations. In addition, the U.S. Environmental Protection Agency estimates that 1.4 million acres of trees have been cleared through mountaintop removal. Appalachia, where most mountaintop removal in the United States takes place, is rich in both vertebrate and invertebrate biodiversity, though populations of species of mayflies, warblers, and others have steadily decreased over the last several decades, in large part due to habitat disruption.

In addition to environmental impacts, communities near mountaintop removal mines have been observed to have higher levels of cardiovascular diseases, lung cancer, chronic pulmonary diseases, and birth defects. The particulate matter pollution believed to cause these health impacts is produced through the actual mining itself, as well as through processing.

Natural gas also disturbs the environment. According to the U.S. Energy Information Administration, drilling natural gas wells produces air pollution, and land is usually cleared in the process of laying pipework. If the drill site is too far for natural gas transportation to be economically viable, it might be “flared,” or burned, on-site, which releases carbon dioxide, carbon monoxide, sulfur dioxide, nitrogen oxides, and other compounds known to impact public health and the environment. Natural gas is primarily methane, which is approximately 25 times more potent than carbon dioxide at trapping heat. Natural gas pipelines like the Mountain Valley Pipeline, the Keystone XL Pipeline, and others have received significant and persistent pushback from locals.

Recent studies from Harvard University have estimated that harmful particulates generated through fossil fuel combustion contributed to 8.7 million premature deaths globally each year. Particulate matter has been observed to contribute to increased heart attacks, asthma, irregular heartbeats, and respiratory symptoms, especially for lower- and middle-income countries and populations. Studies indicate that emissions related to the electrical sector specifically produce sulfur oxide compounds, which affect respiratory systems and can irritate sinuses, exacerbating existing health conditions. Increased deployment of renewable energy sources, like offshore wind, can decrease demand for fossil fuel generation and support better public health outcomes.

While this region of the country only employed 2,158 coal workers in 2021, Virginia alone produced 11.3 million short tons of bituminous coal in 2021, or about 4% of all American coal production that year. Similarly, natural gas employed over 39,000 workers in the region in 2022, with Florida alone contributing nearly 14,000 workers to the industry.

Potential impacts from renewable expansion

Including impacts generated from the entire life cycle, the average wind turbine reaches energy neutrality, or the point at which the energy input equals energy generated, in 7.6 months. By some estimates, a wind power facility will generate 50 times more energy than is required in its construction. Because of this, offshore wind presents a significant opportunity to drastically reduce emissions by replacing traditional, fuel-burning sources of energy.

The region hosts several anti-offshore wind advocacy groups that raise concerns about potential impacts on wildlife and local economies. In May 2024, the Heartland Institute, the National Legal and Policy Center, and the Committee for a Constructive Tomorrow filed a suit to stop construction of the CVOW project in Virginia. The suit alleges that Dominion Energy lacks a biological opinion from the National Marine Fisheries Service regarding potential impacts on North Atlantic right whales. Beginning in 2017, endangered North Atlantic right whales began experiencing an "unusual mortality event" wherein individuals would become sick, injured, or wash ashore. More than 20% of the ~360 individuals remaining globally have been affected. The leading causes are entanglements with gear or vessel strikes, though offshore wind is sometimes erroneously blamed.

In addition, several projects have been canceled in the past two years. Avangrid warned in late 2022 that its Commonwealth Wind project would not be able to move forward unless the company's Power Purchase Agreements with Massachusetts utilities could be renegotiated. In November 2023, Ørsted decided against continuing its Ocean Wind I and II projects in New Jersey, which were expected to generate 2.2 GW of power. In April 2024, the State of New York canceled three projects that were auctioned in October 2023, citing supply chain challenges making it difficult to reach final leasing agreements.

Symbolic Importance

President Biden's goal of 30 GW by 2030 is lofty and requires leasing in the Atlantic, Pacific, and Gulf of Mexico. The U.S. Atlantic Coast is particularly well-suited for development, where wind speeds are strong and the outer continental shelf is relatively shallow, so fixed-bottom foundations, which are the most prolific worldwide, are ideal. Additionally, the Atlantic Coast has significant ports infrastructure which can be leveraged for staging and marshalling for projects. Given the scale of decarbonization that can be achieved through offshore wind and growing demand for power, the U.S. Atlantic Coast has immense potential to drastically change the landscape of the American power system.

While emissions per capita have declined in recent years, as of 2019, the United States produced 14.7 metric tons of carbon dioxide per capita. This places the United States in 10th overall in terms of emissions per capita. Given the high population density of the East Coast relative to most of the country, this region has significant decarbonization opportunities. According to the U.S. Energy Information Administration, these states make up 29% of the country's total retail electrical sales. While electrification is largely considered one of the most important decarbonization strategies, renewable energy like offshore wind must be deployed to meet demand on the grid.

Additionally, as a massive consumer of electricity, the United States can play a role in driving down the cost of generating energy through offshore wind. According to the National Renewable Energy Laboratory and U.S. Department of Energy, continued development of supply chain, ports, and transmission infrastructure can support achieving economies of scale needed to lower costs.

Governmental information

Related government papers

Federal legislation impacting offshore wind development includes the Energy Policy Act of 2005, which establishes the federal framework for leasing and permitting offshore wind projects, and the National Environmental Policy Act, which establishes requirements for environmental analyses and mandates that federal agencies disclose environmental impacts of their activities. Undergoing the NEPA process is time- and energy-intensive, with the average NEPA process taking three years (across all energy types) and an average Environmental Impact Statement length of 1,214 pages. In 2021, a circuit court in Washington, DC decided that the Bureau of Ocean Energy Management (BOEM) may proceed with leasing without an extensive NEPA review, though environmental impact assessments are required by lessees before Construction and Operations plans are approved.

Several states along the Atlantic Coast have passed legislation to establish offshore wind generation targets, namely Massachusetts, New York, New Jersey, Maryland, Virginia, and North Carolina.

Incentives
Recent federal legislation will support offshore wind development in the next decade. Passed in August 2022, the Inflation Reduction Act (IRA) encourages use of domestic content and local labor and allocates $100 million in funding for assessing regional transmission needs. The IRA also includes federal tax provisions, namely a 6% investment tax credit that can increase to 30% by meeting prevailing wage and apprenticeship requirements, as well as a 10% production tax credit.

Studies and Reports
Largely funded by the U.S. Department of Energy, the National Renewable Energy Laboratory (NREL) has published the following reports:

• The Demand for a Domestic Offshore Wind Energy Supply Chain
• Supply Chain Road Map for Offshore Wind Energy in the United States
• U.S. Offshore Wind Workforce Assessment
• Offshore Wind Resource Assessment
• Offshore Wind Energy Market Assessment

Additionally, NREL is undergoing studies focused on Atlantic offshore wind transmission needs and floating turbine technology. Beyond these studies, the Department of Energy has also established the Floating Offshore Wind Shot, an initiative which aims to reduce the cost of floating offshore wind by 70% and establish American leadership in technological innovation.

Relevant political coalitions

In June 2022, President Joe Biden launched the Federal-State Offshore Wind Implementation Partnership which brings together 11 states along the Atlantic Coast to advance offshore wind. This partnership intends to expand supply chain and workforce development efforts through targeted collaboration.

Encouraged by federal announcements, governors from Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Virginia jointly submitted a letter to the Biden Administration in support of continued offshore wind planning.

In October 2020, the governors of Maryland, Virginia, and North Carolina signed a memorandum of understanding (MOU) establishing the Southeast and Mid-Atlantic Regional Transformative Partnership for Offshore Wind Energy Resources (SMART-POWER). Through this partnership, all three states aim to reduce regulatory uncertainty, share best practices, evaluate assets, and collaborate on workforce development and supply chain efforts.

Additionally, the Bureau of Ocean Energy Management (BOEM) hosts Intergovernmental Renewable Energy Task Forces ahead of and during proposed projects, which bring together representatives from the federally recognized tribes, fishing communities, and industry, as well as representatives from federal, state, and local governments. These groups are intended to coordinate, exchange knowledge, address concerns, and educate stakeholders on BOEM's process.

Permitting

Securing permits is one of the largest obstacles to widespread deployment of offshore wind in the United States. This is largely due to bottlenecks from understaffed agencies and a lack of coordination across relevant federal bodies. Additionally, transmission infrastructure is subject to its own regulatory process, and the associated environmental impacts of expansion are not fully known. One-stop-shop sites and fixed timelines may help improve regulatory clarity. In 2023, the Bureau of Ocean Energy Management proposed a Notice of Intent checklist for Environmental Impact Statements, which aims to streamline NEPA reviews (outlined below).

Permitting Overview

Project developers must seek consultation or approval from, at least, the Bureau of Ocean Energy Management (BOEM), the National Oceanic and Atmospheric Administration (NOAA), the U.S. Fish and Wildlife Service (USFWS), the U.S. Army Corps of Engineers (USACE), the U.S. Coast Guard (USCG), the Department of Defense (DOD), the Federal Aviation Administration (FAA), and the Environmental Protection Agency (EPA). Most of these approvals pass through BOEM, which requires developers submit site assessment plans, construction and operations plan, and other deliverables describing the process by which the project will be designed, installed, and decommissioned. Projects in state waters, like the Block Island Wind Farm, still require some, but not all, of the same federal approvals.

State permits are required when federal permits do not address areas of state-specific concern. For example, Connecticut requires that project developers submit permits specifying known state-listed protected species, potential changes in stormwater discharge, siting around or near brownfields, any coastal structures that might be erected, flood management, and other considerations, not including any city-specific permits that might be required for bringing transmission infrastructure ashore. State permits may also be required for projects to connect to the grid and lay cables in state waters and along existing rights-of-way.

City zoning and local ordinances may require that projects gain approval from local decision-makers, especially if the project poses visual or noise risk to residents. Additionally, developers may need permits from the city where transmission cables are making landfall and interconnecting to existing grid infrastructure, as is the case for the Kitty Hawk North project.

Timeline for the average offshore wind project, as presented by the Bureau of Ocean Energy Management. The entire process, from identifying wind energy areas through installation, can take up to a decade to complete.

BOEM Regulatory Process

Initial stakeholder engagement: BOEM initiates identifying potential wind energy areas by conducting stakeholder engagement with federally recognized tribes, other federal agencies like the Department of Defense and National Oceanic and Atmospheric Administration, and state and local governments. These engagement efforts largely take the form of Intergovernmental Task Forces, wherein BOEM brings together representatives from the aforementioned stakeholder groups, as well as others affected by the proposed action, to help inform site selection, provide an overview of the regulatory process, and exchange knowledge.

Request for Information (RFI): To initiate the leasing process, BOEM first releases an RFI to identify which areas might be most attractive and suitable for development. The publication of the RFI is followed by a 45-day public comment period.

Call for Information and Nominations (COI): After determining which areas might be most suitable for development, BOEM releases a COI to determine competitive interest and glean information on other ocean uses, potential concerns or overlap, and mitigation methods. After COI publication, 45-day public comment period. Final wind energy areas identified through public comment and stakeholder engagement efforts led by BOEM.

Environmental Assessment (EA): Called for by the National Environmental Policy Act of 1970. Environmental Assessment (EA) as called for by NEPA determines whether or not federal action, such as leasing in the outer continental shelf, will cause significant environmental impacts. If environmental impacts are expected to be significant, the agency will call for an Environmental Impact Statement (EIS), which typically takes place later in the leasing and development process.

Proposed Sale Notice (PSN): The PSN outlines the leasing areas that are available for leasing, lease provisions that BOEM might require of auction winners (like bidding credits), auction details, the criteria by which BOEM will evaluate bids, and procedures for awarding and executing the lease. The proposed sale notice initiates a 60-day public comment period.

Final Sale Notice (FSN): Accounting for feedback collected during the PSN’s public comment period, the FSN outlines concrete provisions on the leasing, auction, and bid evaluation criteria ahead of the wind energy area’s leasing.

Lease Auction: Only qualified bidders are able to bid in lease auctions.

Site Assessment Plan (SAP): The SAP details the process and activities by which the developer will install and manage technology for assessing resources near and in the project area, like meteorological equipment.

Environmental Impact Statement (EIS): More detailed than an Environmental Assessment, must include information on the action’s purpose, alternatives that might be able to achieve the same or similar outcomes, and environmental impacts in significant detail, among other things. Draft is published, followed by a 45-day public comment period. Final is published, followed by a 30-day “wait period” before final federal decision-making takes place. Finally, the Record of Decision is released which explains the agency’s final decision, any alternatives considered, and plans for mitigation and monitoring throughout the project’s duration. The draft EIS initiates a 45-day public comment period.

Construction and Operations Plan (COP): The COP details how the lessee plans to construct and operate their project. The COP is one of the largest and most comprehensive documents that project developers need to submit to BOEM. By leveraging a Project Design Envelope (PDE), a lessee can describe the “maximum buildout” of a project in their COP, which can provide flexibility on future component decision-making and streamline upcoming technical and environmental reviews.

Relevant Legislation

The National Environmental Policy Act (NEPA) of 1970 establishes requirements for environmental analyses and mandates that federal agencies disclose environmental impacts from their activities. The Energy Policy Act of 2005 establishes the federal framework for leasing and permitting offshore wind projects, which is now led by the Bureau of Ocean Energy Management (BOEM), which is situated within the U.S. Department of Interior. Given the extensive procedural reviews required under NEPA, the law faces scrutiny for its role in extending the approval timeline.

The entire permitting and approval process can take up to a decade to complete, and this timeline can challenge reaching renewable energy goals. In light of this, the federal government is exploring methods to streamline the permitting process. For example, Senator Joe Manchin (Democrat, West Virginia) introduced the Building American Energy Security Act of 2023 to accelerate permitting by creating maximum timelines for federal approval, addressing excessive litigative challenges, prioritizing projects, and clarifying and enhancing jurisdiction between federal agencies, among other provisions. The proposed legislation has received bipartisan support.

Transmission

Current transmission resources

Map of nine regional transmission organizations (RTOs) and independent service operators (ISOs), as published by the ISO/RTO Council

Several regional transmission organizations (RTOs) and independent operating systems (ISOs) exist along the Atlantic Coast and will support new offshore wind projects. PJM operates approximately 88,000 miles of transmission lines carrying more than 183,000 MW of electricity to 65 million customers. New York ISO, while relatively limited in service area, maintains more than 43,000 MW in electrical supply for New York's electrical customers. ISO New England operates 9,000 miles of lines and has plans for five upgrades capable of bringing 10,000 MW to customers.

Florida, Georgia, South Carolina, and most of North Carolina do not operate within an RTO. However, in 2020, the South Carolina General Assembly passed a bill calling for a study detailing methods and benefits of increased energy competition, which might include joining an RTO. The study, while still not publicly available, indicates that South Carolina ratepayers could save more than $350 million by joining an RTO, a figure that has encouraged lawmakers in North Carolina to put forward a bill calling for a similar study.

The region also has more than 40,000 MW and 4,000 MW in retired coal natural gas plant infrastructure, respectively, which may be upgraded to support increased offshore wind deployment.

New transmission needed for renewables

Transmission presents one of the largest challenges to rapid offshore wind deployment along the East Coast, so several entities are studying infrastructural needs and timelines for better informed decision-making. The National Renewable Energy Laboratory is currently conducting a study to understand transmission needs, challenges, and solutions for increased offshore wind development along the Atlantic Coast. Similarly, The New York State Energy Research and Development Authority (NYSERDA) commissioned the New York Power Grid Study to identify transmission and distribution needs for the State. This study includes an appendix on specific offshore wind transmission needs and identifies that networked connection concepts, like Mesh layouts, as well as reuse of existing substations can help reduce uncertainty and meet New York's renewable energy goals. PJM has also estimated that between $600 million and $3 billion worth of upgrades would be required, depending on the timeline and supportive behaviors and policies, like energy efficient planning.

Additionally, seven developers (DP Energy, TotalEnergies, Northland Power, Hexicon, Atlantic Canada Offshore Developments, Bear Head Energy, and Grid United) have formed a coalition to study the feasibility of coordinated transmission corridors, which would allow multiple offshore wind and green hydrogen projects to come onshore at a single interconnection point, thus streamlining transmission planning.

Social and environmental impacts of new transmission

Most offshore wind transmission require approval from federal, state, and local decision-makers. When brought ashore, transmission lines may need to pass through private property or environmentally or socially significant land, which may encounter challenges from citizens. Examples include:

• The Kitty Hawk North Wind Project expects to bring cables onshore in the Sandbridge neighborhood of Virginia Beach, VA, but has received pushback from locals, namely due to concerns around impacts on dune restoration projects and health effects from exposure to electromagnetic fields.
• Residents of Cape Cod have attended public hearings and highlighted concerns about Avangrid bringing high voltage cables onshore at Dowses Beach, Craigville Beach, and Covell's Beach in 2023.
• Protestors in Bethany Beach, DE, staged counter-demonstrations outside Town Hall against US Wind, with particular concerns raised about onshoring of submarine cables.
• In May 2024, protestors in Atlantic City, NJ, rallied against the proposed onshore transmission cable route which would run beneath the city.

In some locations, like New Jersey, the state government may seek to pass legislation overriding city-level decisions in the interest of the public good.

When brought to shore, offshore wind projects often leverage horizontal directional drilling (HDD), a process that avoids surface disruption by drilling a conduit for cable to be pulled through. By avoiding trenches, HDD can reduce disruption to flora, fauna, and human structures on the surface, though the process has the potential to contaminate groundwater resources if not planned carefully.

Ownership

Major owners of current fossil capacity

While many coal plants along the East Coast are now retired or in the process of retirement, only a few companies own large portions of existing coal infrastructure. These companies include AES, Dominion Energy, Duke Energy, NRG, and Southern Company, all of which collectively own more than 13% of the total coal infrastructure along the Atlantic Coast.

Major owners of natural gas generation resources on the Atlantic Coast include Arclight Energy Partners, Calpine Corporation, Carlyle Group, Dominion Energy, Duke Energy, GenOn Holdings, LS Power, NextEra Energy, Oglethorpe Power Corporation, Southern Company, and Vistra Corporation. Collectively, these companies own nearly 15% of natural gas infrastructure in the region.

Additionally, several cities such as Lakeland, FL; Tallahassee, FL; Gainesville, FL; Orlando, FL; Tampa, FL; Taunton, MA; Dover, DE; and Vineland, NJ own natural gas and/or coal generation resources.

Major owners of current offshore wind projects

The majority of existing and upcoming offshore wind projects in the United States are owned by Shell Group, Equinor, Orsted, and Avangrid Renewables, as well as utilities such as Dominion Energy and Duke Energy. International renewable development companies like TotalEnergies are also beginning to enter into the U.S. offshore wind market.

Prospective owner of future projects

With many call areas in the pipeline, several developers have expressed interest in future lease sales across the country. In the Gulf of Mexico, Avangrid Renewables, Hexicon USA, Pine Tree Offshore Wind, TotalEnergies, and Mainstream Renewable Power have submitted formal letters of interest. In the Central Atlantic, Avangrid Renewables, Mainstream Renewable Power, and OW North America Ventures have all expressed interest in future project development.

Finance

U.S. investment in clean energy is estimated to reach USD$300 billion in 2024, which will exceed financing for fossil fuels in the same year despite the United States leading in LNG project approvals (about two-thirds of new LNG capacity announcements made in early 2022 were located in the United States, which fall outside the Biden Administration’s 2024 decision to pause new LNG projects).

While financing is abundant in the United States, offshore wind projects must address five primary challenges to deploy it effectively:

1. Timing mismatch, high costs, and jurisdictional differences (siting, permitting, etc.) that project developers must navigate.
2. Uncertainty related to tax credits.
3. A lack of skilled workers trained in offshore wind installations, operations, maintenance, and decommissioning.
4. Lack of transmission.
5. Financing and scaling up floating wind technology.

For American offshore wind, debt share has ranged 50%-80% and equity share 20%-50% from 2018-2022. In general, this is a lower debt share and higher equity share than Europe, both historically and contemporaneously.

In addition, high inflation has caused several problems for existing, in-development offshore wind projects. In Massachusetts, Commonwealth Wind and South Coast Wind both requested to renegotiate existing power purchase agreements in light of inflation rates, though both were denied. New York project developers have files petitions to increase their rate recovery from consumers by approximately 50%.

Providers of Offshore Wind Financing

Given the relative nascence of offshore wind in the United States, few projects have reached the stage of development where financing is secured.

Public Finance

The U.S. Department of Energy Loan Programs Office provides Direct Loans, as well as whole and partial loan guarantees, in support of energy (both fossil and non-fossil) projects. Grants and cooperative agreements can be provided by the DOE's Wind Energy Technologies Office, Office of Energy Efficiency and Renewable Energy, Office of Clean Energy Demonstrations, Advanced Research Projects Agency-Energy (ARPA-E), and Small Business Innovation Research Program. Technology deployment grants are provided by DOE's Office of Indian Energy, Office of Technology Transitions, Rural Energy for America Program, Small Business Technology Transfer Program, and the State Energy Competitive Financial Assistance Program.

The Block Island Wind Farm received a $290 million financing package from Société Générale, a French financial institution, and KeyBank National Association, which is based in Cleveland, Ohio. The package consists of a $268 million construction/term loan, as well as $30 million for letters of credit.

Private Finance

Vineyard Wind received a $2.3 billion commercial loan financed by nine banks: Bank of America, J.P. Morgan, BBVA, NatWest, Credit Agricole, Natixis, BNP Paribas, MUFG Bank, Santander. $2.3 billion includes both a construction loan, as well as a mini-perm term loan.

Dominion Energy's Commercial Virginia Offshore Wind project has taken a different approach to securing investment. In early 2024, Dominion sold a non-controlling 50% of the project to Stonepeak, an investment firm with a portfolio totaling more than $61 billion. This partnership is intended to shield the project from unforeseen project costs, create a cost-sharing mechanism, and reduce risk. Dominion is expected to earn approximately $3 billion from this sale.

Similarly, Global Infrastructure Management LLC acquired 50% of Eversource Energy's interest in both South Fork Wind and Revolution Wind. Orsted, which was developing Sunrise Wind with Eversource, is now the sole owner.

With no direct stake in current offshore wind projects, private equity firms have begun investing in related products and services and are thus investing in the industry. Morgan Stanely Infrastructure Partners is providing investments into repurposing existing ports for offshore wind manufacture and staging, and Crowley Maritime owns Jones Act-compliant vessels that will be necessary for offshore construction. Apollo Global Management pledged an investment of $265 million in convertible debt and equity in support of US Wind's projects in Maryland.

Other

The Inflation Reduction Act (IRA) created tax incentives to support renewables development. Existing production tax credits (PTC) for wind energy development will continue for projects that begin construction before 2025, though a new 10% emissions-based, technology-neutral credits will begin thereafter and continue through 2032 or until a 75% decrease in power sector emissions is reached (whichever occurs last). Additional credits are available for projects that meet domestic content requirements, are located in fossil fuel communities or on brownfields, or have capacities less than 5 MW and are located in low-income communities or on tribal lands.

Additionally, the IRA established a one-time investment tax credit (ITC) based on total investment at time that equipment enters into operation. The ITC sits at 6% but can increase to 30% by meeting prevailing wage and apprenticeship requirements. Advanced manufacturing production tax credits, advanced manufacturing investment tax credits, and new markets tax credits are also available for offshore wind development.

The IRA also allocated $100 million in funding for assessing regional transmission needs.

In addition to the funding allocated for clean energy development in the Inflation Reduction Act, the Bipartisan Infrastructure Investment and Jobs Act (2021) includes USD$550 billion for clean energy and related infrastructure.

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