Five Takeaways from the EBC Sixth Annual Offshore Wind Conference

The Environmental Business Council of New England’s Sixth Annual Offshore Wind Conference was held on January 23^rd. Here are my top five highlights from the conference.

1. The recent shutdown of the federal government had far-reaching effects for businesses.

Program Manager, Jim Bennett, of the Renewable Energy Program of the Bureau of Ocean Energy Management (BOEM), was scheduled to speak but could not attend due to the shutdown. Mr. Bennett is a key player in the development of the U.S. offshore wind industry, overseeing, among other things, lease auctions for wind development on the outer continental shelf, which recently netted over $405 million for new leases off the coast of Martha’s Vineyard. The winning bidders were unable to execute the leases while the BOEM was shuttered.

2. Many policies help to drive offshore development, some more visible than others.

Secretary Matthew Beaton of the Massachusetts Executive Office of Energy and Environmental Affairs addressed the conference with optimism about the declining cost of offshore wind, touting the legislatively mandated procurement of offshore wind as responsible for driving competition and resulting cost reduction. Matt Morrissey, Head of New England Markets for Ørsted US Offshore Wind, presented a broader view that a cycle of competition drives down cost, which hastens policy adoption, which in turn increases competition. They’re both correct, but there are other significant factors which lower the cost of offshore wind, such as turbine size and technology improvements throughout the supply chain. The offshore wind industry thriving in Europe is a case in point, with over 18 GW of installed capacity at 2018 year end.  Massachusetts did not invent offshore wind, but is leading the pack in the U.S. on a number of policy fronts. Competition is necessary, but developers aren’t in the business of losing money; they are bidding based on actual cost projections. Outside of the State House, work done by the Mass Clean Energy Center has been crucial to creating the infrastructure and business climate to bring offshore wind developers and manufacturers to the Bay State.

3. Responsible development practices have mitigated conflicts and provided additional benefits.

The industry has taken great pains to do the right thing in protecting threatened species and environmental conditions. Wind developers have poured money into studying the environmental effects of wind development which has led to a greater understanding of the threats facing affected species, whose peril exists regardless of wind turbines. From California condors to sage grouse to Indiana bats, wind developers have greatly contributed to understanding the threats to these species, and to mitigating future impacts. Add to that list the North Atlantic right whale, which is the subject of a conservation agreement between developer Vineyard Wind and several environmental groups, to protect endangered whales while still developing offshore wind resources. Another endangered species, Massachusetts fishermen, have been key stakeholders in seeking to responsibly develop wind resources without interfering with an important and historically significant industry for New England. These partnerships help to ensure that a thriving offshore wind industry does not come at the expense of workers or environment.

4. Increased turbine sizes and other technological changes are the primary drivers of cost reduction.

When the Block Island Windfarm project from Deepwater Wind was constructed in 2016, it was the first offshore windfarm in the U.S. It uses GE 5-megawatt turbines. The (likely) second wind farm in the U.S., Vineyard Wind, will use MHI Vestas 9.5-megawatt turbines. Rachel Pachter, Vice President of Permitting for Vineyard Wind, comically noted that they were “the largest commercially available turbine… up until a week ago.” Increases in generating capacity of wind turbines has been rapid and has been a definitive driver of reduction in the levelized cost of energy for wind. We are now passing the 10-megawatt mark and pushing toward 12-megawatt turbines for offshore. This is all part of a cycle, as Matt Morrissey pointed out. Turbine manufacturers are pouring money into research and development in order to stay ahead of the competition, and with proper policy supports competition will remain strong.

5. Even big turbines need a robust supply chain and skilled workforce.

It takes more than large turbines to launch an industry. Again, the Mass Clean Energy Center has pushed the industry forward by building out the New Bedford Marine Commerce Terminal, commissioning the Ports and Infrastructure Assessment, and issuing the 2018 Offshore Wind Workforce Assessment. Tufts University recently announced the creation of a new master’s degree program in Offshore Wind Energy Engineering, which will increase the talent pipeline locally. These efforts have laid the foundation for offshore wind developers, manufacturers, and other service providers to locate in Massachusetts.

The Massachusetts policies implemented have brought us to this exciting time in offshore wind. It is critical to keep the momentum going and remember what happened to the hare when he became complacent with a big lead in the race. New York recently announced plans to add 9 GW of offshore wind capacity by 2035, so it certainly isn’t acting like the turtle.