Wind Power

Offshore wind cancellations put goal of 30 GW by 2030 out of reach

Offshore wind cancellations put goal of 30 GW by 2030 out of reach
(A GE Haliade-X Turbine Stands in the Vineyard Wind 1 Project Area South of Martha’s Vineyard. Photo Credit: Worldview Films)

A new report released today by the American Clean Power Association (ACP) projects about 14 GW of wind capacity offshore U.S. coastlines by 2030, significantly shy of the goal of 30 GW set by the Biden administration in 2021.

The 2024 Offshore Wind Market Report projects $65 billion will be invested in offshore wind projects by 2030. There are currently 12 GW of projects with active offtake agreements, including 4 GW under active construction at Vineyard Wind, Revolution Wind, and Coastal Virginia Offshore Wind. China is the global leader in offshore wind capacity, with nearly 38 GW. There is merely 174 MW of offshore wind capacity currently installed in the United States as of June 30.

Courtesy: American Clean Power

According to the report, there is 56 GW under development across 37 leases in the United States. Market analysts forecast 30 GW deployed by 2033 and 40 GW online by 2035, quickly making up ground behind the assumedly missed 2030 goal. These outlooks build on the 7.6 GW of offshore wind projects seeking to be operational by the end of 2027, per ACP.

“After the successful start-up of the 132 MW South Fork wind farm earlier this year, and with 136 MW operational at Vineyard Wind, offshore wind is gaining momentum with three projects under construction and thirty-seven more in development,” said ACP Chief Policy Officer Frank Macchiarola. “Harnessing America’s offshore wind resources will boost economic activity, create jobs, reduce pollution providing environmental and public health benefits, and strengthen America’s energy security by enhancing grid reliability and energy independence.”

The Offshore Wind Market Report underscores the role that states are playing in driving U.S. offshore wind development. State solicitations could award procurement contracts for an additional 8,800 – 12,200 MW of offshore wind projects in the second half of 2024, all located off the Northeast coast. States with ongoing or upcoming solicitations include New Jersey, New York, Massachusetts, Rhode Island, and Connecticut. New Jersey has 5,252 MW of projects under contract, the most of any state. Virginia has the most offshore wind capacity under construction, with 2,587 MW.

Increasing material costs, high interest rates, and supply chain snags have led multiple offshore wind companies in the last year to cancel or renegotiate power contracts for planned offshore wind farms. The U.S. Energy Information Administration is tracking offshore capacity, noting totals are in flux after Orsted canceled Ocean Wind 1 and 2 in New Jersey late last year.

South Fork Wind (130 MW) and Vineyard Wind 1 (800 MW) are expected to begin operation this year; the former is awaiting commercial operation, while the latter is still under construction but has sent first power. Two projects have started building foundations to support offshore wind turbines: Revolution Wind (704 MW) and Coastal Virginia Offshore Wind (1,265 MW). Revolution Wind is expected to come online by the fall of 2025, while Dominion Energy plans to start CVOW in early 2027, per EIA.

The new ACP report notes that while contract cancellations and rebidding impacted offshore wind development in 2023, states have been quick to open new solicitations and streamline processes. The Bureau of Ocean Energy Management (BOEM) is planning to hold four lease sales in the second half of 2024 in the Central Atlantic, Oregon, the Gulf of Maine, and a second Gulf of Mexico lease sale. These sales will open nearly 1.9 million acres of federal waters to offshore wind development, potentially paving the way to more than 20 GW of future clean power generation capacity.

BOEM has issued a Record of Decision (ROD) for nine lease areas, involving 12 projects, as of July 5, 2024, up from two at mid-year 2023, allowing these projects to move forward with construction. Seven other projects have submitted Construction and Operations Plans (COPs), including five projects that have received a draft Environmental Impact Statement (EIS), allowing them to move further along with the rigorous permitting process.

The full 2024 Offshore Wind Market Report is accessible here.

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