Windy Waters: Unlocking the Potential of U.S. Offshore Wind

The overwhelming consensus of the international scientific community is that rapid progress toward decarbonizing the global economy is needed over the next several decades to avoid the worst consequences of global warming. In line with this consensus, the Biden administration has embraced ambitious climate goals: net-zero U.S. greenhouse gas emissions by 2050 and a more than 50% reduction in emissions over the next decade, by 2030. For these economy-wide goals to be attainable, the electric power sector will have to lead the way by transitioning rapidly to zero-carbon generation resources. Adding to the challenge, this transition will need to occur even as trends toward electrification in other sectors— notably transportation—increase overall demand for electricity.

Modeling analyses come to different conclusions about the likely contribution of different zero-carbon technologies in getting to net-zero but there is little question that the most plausible pathways entail a very substantial further expansion of renewable electricity generation, primarily wind and solar. Offshore wind is widely expected to play a role, in addition to land-based wind, as part of that expansion—for several reasons. First, the size of the overall resource base is substantial: The National Renewable Energy Laboratory (NREL) estimates the total technical potential of offshore wind resources over U.S. waters at roughly 2,000 gigawatts (GW).¹ Importantly, much of this resource base is located in relatively close proximity to large population centers along the coasts (by contrast, some of the nation’s best land-based wind resources are concentrated in regions that are less densely populated and more distant from major demand hubs) (Figure 1).

The specific characteristics of offshore wind also offer valuable advantages as a complement to land-based wind and other renewable generation options. On average, wind speeds over the ocean are higher and steadier than wind speeds over land, allowing for greater power output and more consistent capacity utilization. In addition, the daily and seasonal characteristics of offshore wind complement those of land-based wind: offshore winds tend to be stronger during the day when electricity demand is highest (by contrast, onshore winds tend to be stronger at night) and offshore winds around the United States² are also stronger during the winter months compared to the summer (again, in contrast to onshore wind).

Balanced against these advantages, however, are multiple specific barriers and challenges. It is more difficult and more expensive to build and operate turbines offshore than it is on land, especially in deep water.³ Turbines not only have to be built to withstand the rigors of the marine environment, including the corrosive effects of salt water and exposure to extreme wind and wave action, they are also more difficult to install and access for maintenance than they would be on land. (Wind farms located in the Great Lakes would have to be designed to withstand the movement of wind-driven surface ice during the winter months.) In addition, the undersea cables required to transmit power to shore are costly. Finally, public acceptance and complex, often lengthy, siting and permitting processes pose further challenges. Typically, these processes involve multiple federal agencies and must address concerns from a wide range of stakeholders, including concerns about potential impacts on marine birds and animals, interference with other marine activities or uses (such as shipping or fishing), and adverse effects on viewsheds and coastal property values in cases where the turbines are close enough to shore that they can be seen from land.

For these reasons, several early proposals for offshore wind farms in the United States have encountered long delays and, in the case of some high-profile projects, have been abandoned. The nation’s current installed offshore wind capacity is just 42 megawatts (MW), a small fraction (well under 1%) of current installed land-based wind capacity.⁴ The Biden administration recently gave final approval to a 62-turbine wind farm off the coast of Massachusetts and has committed to approving 15 additional projects by 2035 that are currently in some phase of the planning and permitting process (table 2). But most offshore wind development to date has been concentrated in northern Europe, with recent activity also picking up in Southeast Asia (figure 2). Absent a coordinated push to overcome current barriers and aggressively develop offshore wind, the United States risks ceding global leadership in this key technology. The next section discusses the potential benefits of such a push and reviews related developments in this area, including the Biden administration’s significant new federal efforts in this area.

Given the advantages and disadvantages discussed in the previous section, analyses of likely pathways to decarbonization tend to find that land-based wind will continue to dominate in the United States, but that offshore wind also has a significant role to play. For example, a 2015 “Wind Vision” report by the U.S. Department of Energy (DOE) concluded that the United States could have 86 GW of offshore wind capacity by 2050 on both coasts, the Gulf, and Great Lakes, under a scenario where overall wind energy production expands as a share of total U.S. electricity supply to 10% by 2020, 20% by 2030, and 35% by 2050 (by contrast, land-based wind capacity grows to 318 GW over the same timeframe in DOE’s “vision” scenario, for a total wind buildout, on- and offshore, of 404 GW by mid-century).⁵

The Biden administration aims to accelerate offshore wind deployment to achieve a target of 30 GW by 2030 and create “a pathway to” 110 GW by 2059. This goal, announced on March 29, 2021, substantially boosts the ambition of an earlier Biden executive order that sought to double offshore wind capacity over the next decade through a series of executive actions, including reviewing offshore siting and permitting processes and addressing infrastructure barriers.

Specific commitments included in the March 29 announcement are summarized in the text box. In addition, actions by Congress over the last year point to bipartisan support for offshore wind development. Energy legislation adopted in 2020 included a new 30% investment tax credit for offshore wind projects that start construction before 2026⁶ and appropriations for DOE for FY 2021 included a substantial increase in RD&D funding for offshore wind.

Other analyses likewise point to a substantial role for offshore wind in achieving domestic climate goals. For example, a recent study by BPC, Third Way, and the Clean Air Task Force models potential pathways for achieving net-zero economywide carbon emissions by 2050. In its reference scenario, a major buildout of U.S. offshore wind capacity over the next decade—to 18 GW by 2030—is followed by a further, more-than-three-fold expansion, to 65 GW, by 2050. Other modeling scenarios in the BPC/Third Way/Clean Air Task Force analysis are substantially more ambitious, positing installed offshore wind capacity in the hundreds of gigawatts by mid-century.⁷

Besides contributing to decarbonization goals, the aggressive buildout of offshore wind and associated infrastructure in the United States, together with the development of a robust domestic offshore wind industry, could have significant short- and long-term economic benefits for the country, not only in coastal areas but in many states that have manufacturing hubs that would be well-placed to engage the offshore wind supply chain. The International Energy Agency has estimated that offshore wind could become a $1 trillion global business over the next two decades alone. The American Wind Energy Association estimates that 9–14 GW of offshore wind capacity could come on line by 2025, and that this would translate to about 19,000–45,000 jobs and $5.5–$14.2 billion in annual economic output. The same study finds that a further expansion of offshore wind capacity, to 20–30 GW by 2030, would generate 45,000–83,000 jobs and $12.5–$25.4 billion in annual economic output.⁸ Other sources are even more bullish on the potential economic benefits of offshore wind. A Wood Mackenzie report published in August 2020 finds that total investment in the U.S. offshore wind industry could reach $108 billion by 2030 and $166 billion by 2035.⁹

Building and connecting tens to hundreds of gigawatts of offshore wind generating capacity in a timeframe of just a few decades will not be easy. In addition to technology and financing challenges, siting and permitting hurdles, supply chain issues, and stakeholder concerns will have to be addressed. Table 1 summarizes the steps involved in constructing an offshore wind project. As is clear from even this simplified framework, the project pipeline for offshore wind projects has many components and involves multiple agencies and actors.¹⁰

For offshore wind, as for other types of major energy infrastructure, the coordination challenges are further complicated by America’s federalist system, in which states and the federal government have distinct authorities and responsibilities. Utility companies are regulated at the state level whereas bulk power markets and the transmission system are primarily managed at the regional level and regulated at the federal level. The federal government, meanwhile, has primary jurisdiction over coastal waters, while ports generally fall under state authority. All these “pieces of the puzzle” must be in place to make offshore wind farms commercially viable and, of course, both state and federal authorities must be responsive to the wide range of concerns that will be raised in connection with any large-scale offshore development. Thus, effective collaboration and cooperation are essential, not only between federal and state entities, but also across the federal government because of the myriad federal agencies involved.

The remainder of this section describes the key federal players and summarizes steps in the development of offshore wind projects.

The Bureau of Ocean Energy Management (BOEM), which is housed in the U.S. Department of the Interior, is responsible for issuing leases for projects on the Outer Continental Shelf (OCS) and permitting energy infrastructure in Federal waters. A commercial lease provides a lessee the exclusive right to request BOEM approval for the development of a leasehold, meaning that a lessee can conduct survey activities for site characterization. Further steps are required before a lessee can proceed to construct a facility. Table 2 lists the 15 lessees that are currently in the “site assessment planning” or “construction and operations planning” stages of offshore wind project development.

More recently (on May 25, 2021), the Biden administration announced a new agreement between the Navy and Interior to make two areas off the coast of California available for offshore wind development. The administration also published a preliminary sale notice to advance a WEA in the New York Bight (June 11, 2021).

All the leases shown in table 2 are on the East Coast. This is partly due to unique challenges along the West Coast, and partly due to the robust objectives for offshore wind development adopted by state governments along the eastern seaboard. However, BOEM is in the planning stages for additional lease areas off the coast of New York and New Jersey (i.e. the so-called New York Bight)¹¹, South Carolina, California, and Hawaii.¹² More recently (on May 25, 2021), the Biden administration announced a new agreement between the Navy and Interior to make two areas off the coast of California available for offshore wind development.

BOEM’s important role in offshore wind development is well illustrated by the Bureau’s review of a proposal by Vineyard Wind to build an 800-MW wind farm off the coast of Massachusetts. In 2019 as this proposal was advancing through the permitting process, BOEM decided to conduct a cumulative impact analysis of the potential offshore wind market along the entire East Coast before giving the project the go-ahead. In March 2021, BOEM approved Vineyard Wind’s final environmental impact statement and issued a record of decision (in May 2021) to allow the project to move forward.

While BOEM is responsible for offshore energy exploration and development, the National Oceanic and Atmospheric Administration (NOAA) is responsible for analyzing the impacts of energy projects on marine life, including fisheries,protected animals, seabirds, and marine habitats. NOAA’s authorities are derived from the Endangered Species Act, Marine Mammal Protection Act, and the Magnuson-Stevens Fisheries Conservation and Management Act. NOAA works closely with BOEM and offshore wind project developers to assess the potential effects of offshore wind projects on marine ecosystems and related industries.

DOE provides critical research, development, and demonstration support for offshore wind technologies. A key DOE program is the Wind Energy Technologies Office (WETO) within the Office of Energy Efficiency and Renewable Energy. WETO funds research to help reduce barriers to offshore wind development. Much of this funding to date has gone to entities along the East Coast. More recently, however, research grants have been awarded to organizations around the Great Lakes, on the West Coast, across the Southeast, as well as in the Gulf of Mexico and Florida, underscoring the potential nationwide benefits of a robust U.S. offshore wind industry. WETO, along with several key states, also co-funds the National Offshore Wind Research and Development Consortium, which provides grants to research and development projects undertaken by research universities, industry and national labs to address technological challenges and accelerate innovation in offshore wind generation and transmission.

For nearly a decade, DOE’s National Renewable Energy Laboratory (NREL), has been instrumental in supporting R&D on offshore wind. NREL has sponsored work on energy and economic analyses; resource characterization; grid integration; supply chain, technology, and workforce development; and modeling and simulations, among many other focus areas. The “Wind Vision” report noted previously was the result of a collaboration among several DOE program offices, external stakeholders, academia, and NREL, among others.

As the federal agency that regulates interstate transmission, the Federal Energy Regulatory Commission (FERC) has a critical role to play in ensuring that offshore wind projects are able to connect to the onshore transmission grid and readily sell into bulk power markets. In October 2020, FERC held a technical conference on the integration of offshore wind in regional transmission systems and identified key challenges in this area.¹³ FERC has also emphasized the critical need for the country to have the onshore grid upgrades necessary to support offshore wind development and is assessing current transmission planning – acknowledging the urgency of modifying a project-by-project approach that is inefficient and expensive.

The Department of Defense has numerous bases and activities that rely on access to coastal waters — and, more specifically, on the use of use airspace over the ocean. Along the East Coast, for instance the Navy conducts training on more than 112,000 miles of offshore air, surface, and sub-surface operating areas in the Atlantic. At the same time, the Navy, Air Force, Marine Corps, and, to a lesser extent, the Army, are particularly active in the coastal waters of California (map).

In early 2020, the Navy agreed to allow the state of California and wind project developers to pursue floating offshore projects in a section of coastal waters. While the military does not have siting authorities, the need to reconcile national security goals and renewable energy goals makes DOD a key agency in offshore wind development.¹⁴

A key agency within the Department of Defense that has a principal role in permitting offshore wind projects is the Army Corps of Engineers. Prior to the Energy Policy Act of 2005 (EPAct 2005), the Corps had the lead role in the federal offshore wind permitting process. EPAct 2005 shifted primary permitting authority to BOEM. However, offshore project developers are still required to obtain a permit from the Army Corps of Engineers, pursuant to the Rivers and Harbors Act, as amended by the Outer Continental Shelf Lands Act. That is, the Rivers and Harbors Act delegates to the Army Corps of Engineers the authority to review and regulate certain structures and activities that are in, or that affect, navigable waters, including the Outer Continental Shelf.

While there are a host of critical deployment hurdles for offshore wind, our recommendations focus on two areas: (1) the need for improved coordination and collaboration—across federal agencies and between federal, regional, state, and local entities—to enable a “whole of government” approach to offshore wind development and (2) the need for additional support, in the form of program appropriations and tax incentives, to advance an ambitious offshore wind agenda at the federal level. This section also summarizes recommendations from BPC’s Smarter, Cleaner, Faster Infrastructure Task Force, which has been exploring ways to accelerate the permitting process for all types of clean domestic infrastructure including renewable energy projects and transmission infrastructure (Box 1). If these recommendations were implemented, they would dramatically improve and accelerate permitting for offshore wind farms without harming environmental protections.

Kevin Knobloch provided substantial contributions and assistance throughout this report development process. This report also builds off earlier recommendations from BPC’s Offshore Wind Advisory Group, and we thank those members for helping us evaluate the policy needs for offshore wind to continue making progress in the United States.

^{1 To put this figure in perspective, current installed land-based wind capacity in the United States totals 118 GW (https://www.eia.gov/todayinenergy/detail.php?id=46976). Installed capacity for all utility-scale generation sources in the country totaled more than 1,117 GW at the end of 2020 (https://www.eia.gov/todayinenergy/detail.php?id=46976)
2 International Energy Agency. Offshore Wind Outlook 2019. Available at: www.iea.org
3 Coastal waters off the eastern shores of the United States are relatively shallow, but the waters off the West Coast are considerably deeper. Advances in floating turbine designs can help to address some of the challenges that come with offshore wind development at depths in excess of 60 meters (200 feet).
4 As noted in footnote 1, the nation’s current land-based wind capacity reached 118 GW in 2020 (1 GW = 1,000 MW).
5 U.S. Department of Energy, Executive Summary of Wind Vision: A New Era for Wind Power in the United States, March 2015. Available at: https://www.energy.gov/eere/wind/maps/wind-vision
6 WPED Staff, “PTC extended by one year, new offshore wind tax credit inserted in Congress bill,” Windpower Engineering & Development, Dec. 22, 2020. Available at: https://www.windpowerengineering.com/ptc-extended-by-one-year-new-offshore-wind-taxcredit-inserted-in-congress-bill/
7 More information about the modeling analysis and about the differences between scenarios may be accessed at the Decarb America website, which also offers interactive maps of the offshore wind resource in different parts of the United States.
8 Please note these figures were produced pre-COVID-19. American Wind Energy Association. U.S. Offshore Wind Power Economic Impact Assessment. March 2020. Available at: https://www.eenews.net/assets/2020/03/11/document_gw_01.pdf. For comparison, the European offshore wind industry has created 40,000 jobs in Europe, which, as the AWEA data suggests, could be matched or exceeded in the U.S. John Fialka, “U.S. has 7 ocean turbines. Companies see hundreds soon,” E&E News, July 30, 2020. Available at: https://www.eenews.net/stories/1063653141
9 Beyond 2035, the total level of investment in the U.S. offshore wind industry is expected to settle at $60 billion. For more information, please see Feng Zhang, et al., “Economic Impact Study of New Offshore Wind Lease Auctions by BOEM,” Wood Mackenzie, August 2020. Available at: https://www.noia.org/wp-content/uploads/2020/08/Offshore-wind-economic-impact-analysis-white-paper-final-1.pdf
10 For other analysis of the approval required, please see https://cleanpower.org/wp-content/uploads/2021/02/Final_ACP-Engagement-Process-1.pdf; https://files.klgates.com/files/uploads/documents/2019_offshore_wind_handbook.pdf
11 BOEM announced a proposed sale for the New York Bight area on June 11, 2021. More information can be found here https://www.boem.gov/renewable-energy/state-activities/new-york-bight
12 For a summary of state activities on offshore wind, please see https://www.boem.gov/renewable-energy/state-activities
13 FERC has solicited post-conference comments. https://www.federalregister.gov/documents/2021/03/17/2021-05495/offshore-wind-integration-in-rtosisos-notice-inviting-post-technical-conference-comments
14 As noted above, the Department of Defense reached an agreement with the Department of Interior and the state of California to advance offshore wind energy areas. https://www.doi.gov/pressreleases/biden-harris-administration-advances-offshore-wind-pacific
15 Nine east coast Governors recently wrote to President Biden seeking federal collaboration and leadership to achieve their offshore wind goals. https://www.governor.ny.gov/sites/default/files/2021-06/Joint_Governors_Letter_to_Biden_Admin_OSW_priorities_FINAL.pdf
16 Two recent studies by the Brattle Group, commissioned by Anbaric Development Partners, showcase the importance of planning offshore wind transmission. They can be found at these links: http://ny.anbaric.com/wp-content/uploads/2020/08/2020-08-05-New-York-OffshoreTransmission-Final-2.pdf; https://ma.anbaric.com/wp-content/uploads/2020/07/Brattle_Group_Offshore_Tranmission_in_New-England_5.13.20-FULL-REPORT.pdf
17 https://www.energy.gov/eere/wind/downloads/national-offshore-wind-strategy-facilitating-development-offshore-wind-industry
18 House Select Committee on the Climate Crisis’s “Congressional Action Plan for a Clean Energy Economy and a Healthy, Resilient and Just America” issued on June 30, 2020 recommended that “Congress should provide funding for DOE to analyze the existing onshore and offshore transmission system to identify what the requirements would be to connect 50 GW of offshore wind. DOE should identify the environmental and economic benefits of developing offshore transmission.” https://climatecrisis.house.gov/report
19 https://bipartisanpolicy.org/download/?file=/wp-content/uploads/2021/05/BPC_SmarterCleanerFasterRecPage.pdf
20 https://www.boem.gov/sites/default/files/environmental-stewardship/Environ-mental-Studies/Pacific-Region/Studies/BOEM-2016-011.pdf
21 The American Jobs Plan (i.e. infrastructure investment package) announced by President Biden on March 31 included a proposal for Congress to create a targeted investment tax credit that “incentivizes the buildout of at least 20 GW of high-voltage capacity power lines and mobilizes tens of billions in private capital off the sidelines”, as well as for a ten-year extension and phase down of an expanded direct-pay investment tax credit and production tax credit for clean energy generation and storage to be paired with “strong labor standards to ensure the jobs created are good-quality jobs with a free and fair choice to join a union and bargain collectively.”
22 The Energy Act of 2020 authorized $32 million per year through FY25 for the Loan Program. The American Jobs Plan also included the availability of $3 billion in debt capital by the DOE Loan Program Office to help finance offshore wind projects.
23 https://www.energy.gov/articles/energy-secretary-granholm-announces-ambitious-new-30gw-offshore-wind-deployment-target}