Saved by the Supply Chain: How Offshore Wind Stakeholders Hope to Survive and Thrive

Election Day 2024 sparked many conversations about the future pace of the energy transition in the United States. The offshore wind industry appears to be especially vulnerable to a change in federal energy policy, having been a frequent target of criticism by President-elect Donald Trump over the years. Nevertheless, offshore wind stakeholders are in a much better position to engage bipartisan support than just a few years ago.

The supply chain is deeper than ever before

The main difference between then and now is the supply chain. Offshore wind is a new industry in the U.S. When developers first began proposing offshore wind farms in the early 2000s, the domestic supply chain was still in a skeletal state. They relied on components and supplies from overseas, where the industry was maturing more rapidly.

In Europe, for example, offshore demonstration projects began appearing in the 1990s. The European supply chain was ready for commercial scale up by 2000 when the United Kingdom’s Crown Estate began leasing offshore areas for development.

In contrast, the U.S. did not get its first commercial offshore wind farm until 2016, when a 30-megawatt array of five turbines went into operation off the coast of Rhode Island. In the following years, activity practically ground to a halt, except for two additional turbines. Totaling 12 megawatts, they began operating off the coast of Virginia in 2020.

That was the extent of offshore activity in the U.S. until the Biden-Harris administration took office in 2021 and established a goal of reaching 30 gigawatts by 2030. So far, 10 commercial-scale projects are completed or in the pipeline. The massive, 2.4-gigawatt SouthCoast Wind project in Massachusetts reached an important environmental review milestone recently, bringing the total to 11. And federal offshore lease activity, which was formerly limited to the mid- and north-Atlantic coasts, spread to the Gulf of Mexico and the Pacific coast. Together, all of this activity spurs demand for domestic components.

The trade organization Oceantic Network counts 39 states hosting supply chain activities for the domestic offshore wind industry. That is important because it expands the field of offshore wind stakeholders far beyond coastal states.

The supply chain reaches across partisan boundaries, too. The Republican-led state of Texas, for example, is home to the leading firm Kiewit Offshore Services, which built the first-ever offshore wind substation in the U.S. Kiewit completed the substation last year at its facility in Texas. It was then transported to New York, where the developers Ørsted and Eversource are working on a 132-megawatt wind farm to serve Long Island.

Room for growth in the offshore wind supply chain

Despite the increase in activity, offshore industry analysts say the domestic supply chain is still not strong enough to support the 30-gigawatt goal by 2030. They also note that overseas suppliers cannot fill the gap in time. Still, offshore wind capacity in the U.S. can continue to grow if the domestic supply chain continues to grow with it.

The National Renewable Energy Laboratory analyzed the state of the U.S. supply chain in 2022 and made the case for stepping up supply chain investments. It concluded that coastal and non-coastal states will realize workforce and economic benefits from investments that leverage existing manufacturing resources. That includes ship-building facilities for the specialized vessels equipped to install offshore wind turbines.

“A domestic supply chain could create 10,000 full-time-equivalent jobs in major-component manufacturing facilities by 2030, with up to five times as many opportunities for supplier jobs, all of which would span the country,” according to the lab.

In a follow-up report last year, the lab indicated that the domestic supply chain will continue to grow long after the 30-gigawatt goal is met. One major contributing factor is new floating wind turbine technology, which allows wind farms to be located in water too deep for the conventional construction methods that dominate the wind industry today.

“A massive 2.8 terawatts of U.S. offshore wind energy potential — enough to power 350 million homes — blows over ocean waters too deep for wind turbines to be fixed to the sea floor with foundations,” according to the lab. One terawatt is equivalent to 1,000 gigawatts. 

Bipartisan support for offshore wind

In a public statement celebrating the SouthCoast Wind milestone, Oceantic Network CEO Liz Burdock took note of another circumstance supporting a healthy future for the U.S. wind industry. 

“This massive project, first leased during the first Trump administration, will create thousands of jobs and drive hundreds of millions into the national economy through investments in manufacturing and New England port facilities,” Burdock said, drawing attention to support for the offshore wind industry during Trump’s term as President from 2017 to 2021.

The timing of the SouthCoast lease is significant because the U.S. had no dedicated offshore lease process in the early 2000s. The ill-fated Cape Wind project, for example, was initially approved by the U.S. Army Corps of Engineers in 2004.

During the Obama administration, responsibility for leasing offshore areas in federal waters was transferred to the Department of the Interior, where the Bureau of Ocean Energy Management (BOEM) worked on refining the lease process. Though not entirely immune to lawsuits, the new process is a de-risking tool that provides developers with a predictable regulatory environment. As Burdock pointed out, the bureau continued to issue leases under the Trump administration.

“We applaud BOEM’s consistent and thorough regulatory process, which is attracting new investments in our 39-state supply chain and is enabling significant economic progress across our nation,” Burdock said. 

It remains to be seen whether the bureau will be allowed to continue along its consistent and thorough track. But last spring U.S. Secretary of the Interior Deb Haaland outlined a five-year schedule for up to 12 new lease sales through 2028. If the plan fails to materialize, offshore stakeholders in coastal states won’t be the only ones to suffer the disappointment of lost opportunity.