New Hampshire, USA -- A conference this week in Boston packed some deep discussions about the U.S. offshore wind industry's progress, and opportunities and challenges ahead, from coordinating state and federal efforts to pursuing technology development, to simply getting the first steel into the water to show it can be done. 

Facing the Problems, Elevate the Conversation

The question isn't whether offshore wind projects can be built, it's about establishing early momentum and shifting the emphasis from one-off projects to driving a sustainable industry, noted opening speaker Jim Lanard, founder and former president of the Offshore Wind Development Coalition. First thing first: get the first project in the water, something that later panelists agreed on. Second is establishing regulatory certainty at the state level: "we can't have states changing the rules of the game halfway through." The sector also has to do a better job about the economics of what's happening, from internalizing costs to structuring them financially -- but also changing the conversation from being so much about how much things cost, to the benefits offshore wind provides. "People hear about costs, the price of energy," he summarized, and the conversation drifts into "Yes, but... we need to get rid of that 'but' and get them to just say yes."
And that's perhaps the offshore wind industry's biggest problem: delivering its message. In northern New England the conversation about future energy supplies has been dominated by the prospect of importing hydro from government-controlled utilities in Canada, piped down by new (and controversial) transmission lines. "We're losing the argument why local renewables are a better option," he said, even in this region where few other renewable energy options (onshore wind, solar) are really viable at utility-scale. Deepwater and offshore wind development in general, must be opportunistic in selling power, he suggested, pointing to the Long Island Power Authority's current RFP due in March.
That conversation has to be raised up to a national level -- and making it a fair conversation. Peter Mandelstam, president of Arcadia Offshore (and longtime AWEA board member), suggested the offshore wind industry should take a page from how the "marriage equality" movement has evolved, changing the conversation and making it a national and widely nonpartisan movement. "We need to rededicate ourselves and have a national conversation about this transformative technology," he said. Part of shifting the marriage equality debate was in marginalizing and silencing fringe voices -- and that's what the offshore sector also needs to do, he said. "Illegitimate voices [namely, climate change deniers] have an audience in the marketplace of ideas which they don't deserve to have."

Coordinating State and Federal Policies, And a Cape Wind Update

Jim Gordon of Cape Wind laid out the case for offshore wind in New England: the current price of natural gas here is three times that of Europe (roughly $30/mmbtu vs. $10), electricity prices have soared to $237/MWh compared with Cape Wind's in-hand price of $190/MWh if it were running today, and New England's power pool capacity auction prices have spiked in the past few weeks fro around $2 per kilowatt-month to $15/kWm. (Deepwater Wind CEO Jeff Grybowski later offered a real-time update to Gordon's electricity pricing number which had crept up to $263/MWh, a simultaneous endorsement of ISO New England's mobile app.) The East Coast and New England in particular "is facing some very important energy decisions," Gordon noted. Prime among them: whether to commit to an energy destiny tied to huge investments in pipelines and Canadian shales or dedicate to domestic renewable energy, in particular offshore wind.
Speaking of delivering messages, Gordon revealed breaking news about Cape Wind: Danish credit export agency EKF has approved a $600 million commitment, on top of PensionDanmark's initial $200 million pledge, a commitment reiterated just weeks ago. EKF's investment reportedly is earmarked mainly for turbine purchases. Gordon expressed confidence that the project's financing will be completed by the third quarter of this year.
Gordon also delivered one of the event's best lines, admitting that the long saga surrounding his project has made him feel like he's a real-life star of Breaking Bad: the mild-mannered energy developer who evolves (devolves?) to accept and deal with the ruthless and cunning cartels surrounding him.
Deepwater's Grybowski urged harmony between state and federal polices, with deference to letting the state take the lead. Despite the Department of Interior's "admirable" interest in leasing offshore wind energy areas, he expressed a "firm level of frustration" with the lack of priority given to developers that actually want to build projects, and have revenue contracts in hand. "We question whether state and federal governments are working together as much as possible," he said. "I don't see the coordination. That's a huge problem for the next level of projects." Mandelstam, who at the center of the nation's first winning offshore wind contract in Delaware, agreed that states' initiatives must go first in a coordinated effort.
Chris Wissemann, CEO of Fishermen's Energy, walked through his project's up-and-down efforts to gain approval by the state of New Jersey's Board of Public Utilities. The project remains in BPU limbo, but he's optimistic that a final push to the finish line will happen with new BPU leadership -- a change due in part to backlash following the Christie administration's BridgeGate scandal and subsequent concerns raised about independent agencies' self-authority. Asked about the DoE offshore pilot project grant process, Fishermen's Weissmann suggested one of the eventually winners probably will be one of the floating-foundation projects (Principle Power in Oregon or the Aqua Ventus project in Maine). That means four other pilots will be fighting for the two remaining DOE downselect spots, but he feels Fishermen's has the best headstart and momentum. And most of them, he noted, will be relying on that DOE funding to move onward -- including Fishermen's.

The flip side of building out the U.S. offshore wind sector is incentivizing the supply chain, and that means building a pipeline of projects to spur private-sector investments, urged Fara Courtney, founder and CEO of the U.S. Offshore Wind Collaborative. "As soon as we get something in the water, we need to look at the big picture and be efficient about it." Doing so also lessens the economic burden on the first projects in the water, which "can drive things forward, but be careful about managing expectations" about just how much they can accomplish, she said.
Bill White, director of offshore wind sector development for the Massachusetts Clean Energy Center, and Matthew Morrissey, managing director for the New Bedford Wind Energy Center, both showcased accomplishment and goals for the state's leadership in offshore wind energy. In the days of whaling New Bedford was the nation's richest city per capita and continues to be the nation's top grossing fishing port, Morrissey noted, and the city believes adapting some of that infrastructure to accommodate offshore wind will continue that tradition. "We are not interested in losing our working waterfront," he said. At the same time, acknowledging a multi-year lag in between offshore wind projects, particularly once Cape Wind and Deepwater come online, New Bedford is making sure its port is designed as a multipurpose facility, ideally with eventual ownership from a terminal operator.

Emphasizing the Technology: It's All About Foundations

Offshore wind technology is improving in all areas, from cost of construction to more efficient turbines and even O&M, but ultimately these merely are "chipping away at costs," said Copeland. The real big leap in innovation, he suggested, will be in foundations and installations. "The real breakthrough is being done in the water," Weissman agreed. The proverbial Holy Grail for this industry would be to put forth a project where most or all of the construction and assembly is done dockside and the only vessels required are tugboats. Yet the irony is not lost, he said, that the same wind regimes that make offshore locations viable also can disrupt installation schedules and hike up costs.
"The turbines are incredibly important... but there's been so much development we don't have to emphasize that so much anymore," agreed Johan Sandberg, service line leader for offshore renewable energy at DNV GL. Foundations, however, are "very interesting -- a lot can be done," especially around automating their manufacturing in areas such as welding and bending plates, and having shipyards to do the work in a competitive environment: "modularization is very important," he said.
Karl Klos-Hein, managing director, EEW SPC, suggested that jacket and floating foundations would see more interest through the next several years, while monopiles (especially XL version) will gain ground, but he sees declining prospects for gravity-based foundations (too complex and major environmental impacts) and tripod/tripiles (too heavy, expensive fabrication and logistics). A handful of offshore projects being installed over the next several years are being switched from jacket foundations to XL monopiles, he said; the larger of them well in excess of 100 turbines each, including Dong Energy's Walney Extension, Van Oord's Gemini, E.On's Rampion, and WPD/DEA's Kriegers Flak. XL monopiles are likely to come in at almost a third the cost of jackets for use with Siemens 3.6MW and 6 MW turbines respectively, he showed.
Morten Mork, division manager for wind and renewables at Bladt Industries, also noted the emergence of XL monopiles vs. jacket designs, while showing several examples of the latter being constructed out of Denmark's Lindø shipyard.

An Offshore Wind Vision: Japan's "Niigashima" in 2050

DNV's Sandberg presented his company's vision for offshore wind in 2050. The International Energy Agency's (IEA) revised forecasts call for roughly 18 percent wind power by 2050, and a quarter of that coming from offshore, significantly more than just a couple of years ago. A projected 14 percent drop in onshore wind LCOE for every doubling of installed capacity could be duplicated in offshore as well, he noted. Laying out the pathway to 2050 comes in three stages, he offered: First (2013-2020) are using existing technologies in innovative ways, such as offshore wind-powered water injection systems at oil/gas reservoirs to increase their capacity -- in fact this very application has been online in Scotland for several years. A second phase he described (2020-2030) would focus on integration with society (e.g. fishing, agriculture, shipyards), powering islands and archipelagos, and introducing offshore energy storage options, new turbine and blade materials, and ultradeep moorings.
For the final step in the 2050 vision Sandberg introduced a video-animated fly-by of a gigantic offshore wind farm off Japan's Niigata coastline, inspired by petroleum resources and efforts on the Norwegian Continental Shelf and its fundamental influence on Norway's economy. Japan is the perfect location for a mega-offshore wind farm, he said: there's a tremendous gap in power generation lost in nuclear plant closures; Japan continues to heavily import liquid natural gas, paying a record $69 billion in 2013; and the 2011 Tohoku quake/tsunami Japan decimated the fishing industry, resulting in a whole coastline of unemployed workers.
Sandberg quoted a keystone theme from last year's critically acclaimed Japanese movie "The Wind Rises": "Inspiration unlocks the future, technology will catch up."

Tax Extension Or No?

No wind energy conference is complete without discussion about tax credits, and in this venue there were somewhat opposing views. Mandelstam initially declared there will be "no legislative vehicle in 2014" because of persistent "total gridlock" in both houses in this election year, asserting that "the existing conversation is moribund." Upon an audience suggestion that the industry should be expressing more positivity about such an important issue, he agreed that this is the industry's #1 priority (Grybowski echoed this as well), but Mandelstam reiterated that the industry also needs to be candid: after getting the tax extenders through during nearly the past two decades including Republican-dominated governments, "we've now gone backwards" in the current climate of dysfunction in Washington, and "even our champions are saying it's an enormously difficult lift." In response, though, Cape Wind's Jim Gordon replied he's confident the tax extenders will happen in 2014.
Nevertheless, Mandelstam acknowledged that there's light at the end of the tunnel for permitting and politics. "Congress may be crazy but they're not foolish," he said, noting that they won't kill what could be a major national industry, one which has strong support from elected officials on the coasts who believe it's an enormous job creator. "I'm ultimately optimistic that members of Congress will do the rational thing."

http://www.renewableenergyworld.com/rea/news/article/2014/02/charting-offshore-winds-next-course?page=2