US investment in offshore wind power is predicted to rise from nothing 10 years ago to a level that nearly matches spending on offshore oil drilling, as an energy source established in Europe grows in popularity across the Atlantic.
Offshore wind projects are on course for about $78bn in capital spending this decade, compared with the $82bn planned for US offshore oil and gas development, according to energy consultancy Wood Mackenzie.
In the decade that began with the 2010 Deepwater Horizon drilling disaster, US offshore oil development received $154bn of investment. The figure for commercial-scale offshore wind was zero.
Offshore wind has benefited from targets set by east-coast states for clean electricity. About 22,000 megawatts of generating capacity is “reasonably foreseeable” in federal waters of the Atlantic, the Bureau of Ocean Energy Management (Boem) said — enough to supply more than 10m homes.
“It’s huge. The last three, four years have obviously been a very positive development,” said Thomas Brostrom, chief executive of North America offshore at Orsted, the Danish wind group.
The outlook for US offshore oil is stagnant even as the Trump administration attempts to open new areas for drilling. With good inland oil supplies, high exploration costs and worries about the environmental impact, offshore production is likely to rise by only 200,000 barrels a day in this decade, the Energy Information Administration forecasts.
Boem is accepting public comments on Vineyard Wind, which would install as many as 100 turbines up to 837 feet tall in waters south of Martha’s Vineyard island in Massachusetts. Developed by Copenhagen Infrastructure Partners and Avangrid, a subsidiary of Spain’s Iberdrola, the 800MW project would be the first large-scale offshore wind farm in the US.
Last week, Dominion Energy finished installing a two-turbine pilot 27 miles off Virginia, a prelude to a 2,600MW full-scale project scheduled to start construction in 2024.
Virginia’s governor in April signed the “Clean Economy Act”, which requires at least 5,200MW of offshore wind by 2034. All three states are led by Democrats — the party has made climate policy central to its agenda.
“By and large, this is a northeastern phenomenon, driven by northeastern states seeing cost declines in Europe and being very interested in bringing offshore wind to their shores,” said Max Cohen, a Wood Mackenzie analyst. “And these projects will be close to demand centres like Boston, New York and all these coastal cities.”
Offshore wind projects require high upfront spending: a 250MW project costs about $1bn, according to the International Energy Agency. However, the cost is likely to fall more than 40 per cent over the coming decade, the agency said.
A few years ago, the lifetime electricity prices of the first offshore wind contracts were in the…