The Global Community for Sustainable Energy Professionals
Because there are no wind turbines installed in US waters, there is a shortage of critical data on the environmental and siting effects of turbines and on the installation, operations and maintenance of turbines. This lack of data drives the costs of financing US offshore wind projects to the point where financing charges account for roughly half of the cost of offshore wind energy, according to the US Federal Government’s Department of Energy.
Reducing perceived risks to investors in wind energy projects would bring the discount factor down from a current estimate of 20% to a target level of 8%, according to the DoE.
The US offshore wind industry is well behind Europe. Cape Wind, the United States’ first offshore wind farm, received its final permit from the Obama Administration in April, and construction should start later this year. But it has been far from easy. It has taken ten years for the project to reach this point and – while Atlantic coast state governments are talking positively about developing wind energy industries - Cape Wind is well ahead of any other offshore wind farms proposed in the US.
Two of the key Federal players scrambling to develop the infrastructure for an offshore wind energy industry are the Department of the Environment and the Department of the Interior. DoI has considerable responsibilities for siting and permitting issues in US waters.
Together, the Departments published a “National Offshore Wind” strategy in February. It identifies two critical objectives: to reduce the cost of offshore wind energy and to reduce the timeline for deployment. The strategy aims to achieve that through support for technology development, market barrier removal and advanced technology demonstration.
The Offshore Wind Strategy sets out a pathway for reducing the cost of US offshore wind energy from $0.27 per kWh in 2010 to $0.07 per kWh in 2030. The current baseline of installed capital costs for offshore wind in US waters is $4,250 per kW, according to the US National Renewable Energy Laboratory. The pathway plans for an increase in the average turbine rating from 3.6MW to 10MW, an average turbine capacity factor improvement from 39% to 45%, while innovative components with integrated design could bring capital costs down towards the strategy goal of $2,600 per kW.
To cut costs by reducing risks to investors, the DoE will support development of validated turbine performance models that accurately predict project outputs. They will also participate in the development of design codes and standards to ensure better turbine reliability. By partnering in demonstrations of advanced offshore wind technologies, the DoE will tackle perceptions of technology risk.
R&D programs with DoE support will be implemented in cooperation with the European offshore wind industry and the US offshore oil and gas industry.
The Department of the Interior had earlier published its “Smart from the Start” initiative to streamline the approval process for wind farm projects on the outer continental shelf off the East coast of the United States.’Smart from the Start’ is promoting an interagency process to identify sites with optimal environmental, geophysical and wind resource attributes. And a parallel track to process applications to build offshore transmission lines has also been established.
Interesting wind energy infrastructure projects are gaining private sector support. Google is one of the major investors in a planned 560 km-long $5 billion power ‘backbone’ that would stretch from Virginia to New Jersey, creating a network for 6.6 GW of wind capacity. Design and permitting should be completed by 2013, with the first section, between New Jersey and Delaware built by 2016.
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