NEXT, THE DIFFERENCES
From market size and maturation to design and contracting approaches, comparing the U.S. and European offshore wind markets is like comparing apples to oranges.
Market development — The first commercial offshore wind project in the U.S. — a five-turbine, 30-megawatt (MW) wind farm in the ocean waters off Rhode Island — began operating in late 2016. Europe, by comparison, had 105 offshore wind farms across 11 countries at the end of 2018. Together, the continent has 18.5 gigawatts (GW) of offshore wind capacity, as reported by Wind Europe. That is roughly 10 percent of Europe’s total installed wind energy capacity.
European nations built their network of wind farms one by one, beginning with small 5-, 10- and 50-MW projects in the early rounds and building up to larger scale projects as developers mastered the learning curve. In the U.S., there is an appetite among developers to leverage the technological gains made in Europe and elsewhere and leapfrog directly to mega-size developments. This steep development trajectory could create challenges for supply chain and labor resources.
Project drivers — In Europe, offshore wind projects are driven primarily by the desire for cheap, renewable energy, with economic development a secondary, but increasingly important, consideration.
Both factors are also the driving force behind the U.S. offshore wind market — although their relative importance is flipped. States entering the offshore wind market typically lead with the market’s significant economic impact, as measured by the potential for tens of thousands of new jobs and billions of dollars in investment.
Given the state goals announced by New Jersey, New York and Massachusetts, the regional market is expected to reach at least 15,000 MW by 2030, resulting in the creation of more than 36,000 full-time jobs and hundreds of millions of dollars in economic impact. That includes, for example, the jobs at wind turbine assembly facilities and in offshore wind farm construction.
The addition of economic development to the equation means several things to U.S. developers, ranging from the prospect of financial incentives to policy ramifications, as well as new rules by which projects are evaluated and awarded.
Design considerations — U.S. developers anticipate leveraging much of the turbine technology, equipment, cabling and substation technology developed for European applications. But they must also do their design homework.
Conditions off the U.S. Eastern Seaboard are different from those in the primary areas for European offshore wind development, which can impact everything from foundation design to equipment installation. For example, wind conditions on the Eastern Seaboard are more consistent than in the North Sea, where a giant wind farm is now being planned to power all of northern Europe. There, competing winds from the Arctic, Atlantic and Sahara are complicating designers’ efforts to accommodate changes in wind direction.
In the U.S., wind farms are likely to be located close to shore — usually within 50 miles. In Europe, early projects were constructed within 50 miles of coastal lands, but new projects now under consideration will likely be located hundreds of miles from the coast. Most European wind farms use either monopile foundations — large-diameter steel pipes that are driven into their seabeds’ sand, silt and clay soils — or jacket-type foundations (similar to small oil and gas platforms), depending on water depth. New technology is also now being used in Europe, including gravity-based foundations and suction bucket foundations. The soils in European and U.S. seabeds are also different, and the use of the cheaper monopile foundation design — the most common in Europe — may not be possible in the northeastern U.S., where gravel and boulders are commonly found below the seabed. The presence of the endangered North Atlantic right whale and other sea mammals also precludes the use of monopiles in the U.S. due to the excessive noise created during their installation. Instead, American developers are more likely to gravitate toward other foundation solutions, including gravity-based structures that don’t require piles or special installation vessels.
Contracting methods — In Europe, offshore wind developers have a number of different contracting methods to choose from. Given that the risks in the European wind market are now generally known and understood, risk concerns are no longer a major stumbling block when considering new contracting methods.
Because the U.S. offshore wind market is still in its early stages, risk is much more difficult to predict and control. Each state has its own regulatory requirements, and the transmission system is largely unplanned. The scope of undefined variables means that developers have — for now — not yet settled on a particular contracting methodology.
Rather, owners of and investors in the first U.S. offshore wind projects will carry the bulk of the risk. But they recognize they cannot do it alone. Current onshore wind developers and others seeking to enter the market are forming partnerships with European offshore wind developers and U.S. power design and construction firms that can help them navigate the complex — and often yet unwritten — rules and regulations that will eventually govern offshore generation and transmission, and then bring these projects to completion.
Shipping — Among the biggest differences between the U.S. and European markets are issues related to shipping and the Jones Act, a federal law that prevents foreign-owned ships from carrying cargo between U.S. ports. In Europe, vessels can move from country to country and work freely in each. The Jones Act potentially forces developers to use U.S.-built, -owned and -crewed vessels at a time when the number of U.S. offshore wind vessels is limited, creating a potential roadblock in market development.