The US offshore wind energy project development and operational pipeline grew in 2018 to an estimated potential generating capacity of 25,824MW, according to a report issued by the US Department of Energy (DOE).
The overall size of the US offshore wind pipeline grew by 1.4% in 2018, from 25,464MW to 25,824MW.
The growth was driven by falling offshore wind turbine prices in the US, accelerated federal offshore wind lease auctions, and state procurement mechanisms, according to the 2018 Offshore Wind Technologies Market Report.
According to the US Under Secretary of Energy Mark W. Menezes, with a development pipeline topping 25GW, “U.S. offshore wind is poised to be a significant part of our comprehensive energy portfolio in the coming years.”
The US offshore wind project development and operating pipeline comprises one operating project, the Block Island Wind Farm, eight projects that have reached the permitting phase with either a construction and operations plan or a viable offtake mechanism for sale of electricity, 15 commercial lease areas in federal waters with exclusive site control, two unleased wind energy areas, and five projects (all Pacific-based) that have submitted unsolicited applications to the Bureau of Ocean Energy Management (BOEM).
At the end of 2017, US offshore state wind procurement policies totaled over 5,300MW targeted for deployment by 2030. By early 2019, the sum of official state offshore wind capacity commitments increased to 19,968MW by 2035. In 2018, new commitments were added in Massachusetts (additional 1,600MW authorized by 2035), New York (6,600MW added by 2035), and New Jersey (2,400MW added by 2030), while Connecticut and Rhode Island both agreed to purchase power from Ørsted’s 600MW Revolution Wind project.
In 2019, new policy commitments were enacted in Connecticut (2,000MW), and Maryland (1,200MW). In some states without offshore-wind-specific targets, like California and Hawaii, 100% renewables portfolio standards and carbon reduction policies are driving these markets, which are progressing toward the creation of new offshore wind lease areas, the report said.
BOEM auctioned a total of 1,573km2 in three adjacent offshore wind lease areas off Massachusetts in December 2018. Each winner, Equinor, Mayflower Wind, and Vineyard Wind submitted a bid of USD 135 million, more than tripling the previous lease area sale price record for a single lease area of USD 42 million in 2016 for the New York lease area submitted by Equinor.
According to the report, higher offshore wind lease sale prices indicate increased confidence in future market growth driven by state policies; confidence in the regulatory and financial institutions to support offshore wind project development in the nascent US market; continued cost reductions and; heightened demand for offshore wind in the northeastern United States.