On Monday in New Orleans at the AWEA WINDPOWER 2016 conference, experts from the offshore oil and gas and offshore wind industry gathered to learn how the two sectors can work together to help the burgeoning offshore wind industry in the U.S.
Stephanie McClellan, Special Initiative on Offshore Wind opened the session. “If we act on this, if we get it right, if we can convert know-how and experience, we are going to ramp up offshore wind in the US. We’re visibly making the case for the viability of offshore wind,” she said.
Chris Van Beek is President of Deepwater Wind, the company developing the first offshore wind farm in the U.S., the 30-MW project off the coast of Rhode Island. Van Beek explained Deepwater Wind’s process for construction of the offshore wind farm, one that involves many different contracts with many different engineering companies. Broadly the company looked for four different project managers: a foundation manager, a transmission manager, a turbine manager and a logistics manager. Overall the 30-MW project will create about 1000 jobs during the two years it will take to build it.
Annegrethe Jeppesen, lead contract manager for DONG Energy, the largest developer of offshore wind farms in Europe, said that by 2020, DONG will have built more than 6 GW of offshore wind capacity in Europe.
“We would like to copy that story in the U.S.,” she said.
Jeppesen said there is a huge potential for the offshore oil and gas industry in the U.S. based on how DONG works with offshore oil and gas in the EU.
For offshore wind, cost reduction is key, and both Van Beek and Jeppesen said that the need to standardize manufacturing, contracts, planning, etc., is very important. According to Jeppesen serial manufacturing is more than 40 percent ahead on price than companies doing on-offs.
Jeppesen said that early on the company stated publicly that it wanted to bring the installed cost of offshore wind capacity to 100 [US $111] per MW. DONG then worked with its entire supply chain to figure out how to reduce costs. “And we are nearly there,” she said. Her advice to potential partners in the U.S. was very straightforward: “You need to be there for the long term. Collaborate with us, show us transparency in your costs so we can help you improve,” she said.
Solving the logistics and transport problem is another huge challenge said presenters. This is a particularly big issue in the U.S. because manufacturers of equipment are not located close to ports and some of the vessels needed to support wind projects do not exist in the U.S.
All presenters pointed to the Jones Act as something that companies need to abide by. The Act mandates that all goods transported by water between U.S. ports be carried on U.S.-flagged ships, constructed in the U.S., owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents. These requirements were an issue when constructing the Block Island Wind Farm because no vessel existed in the U.S. that could support a crane large enough to install the turbines. For that reason, Deepwater contracted UK-based Fred Olsen to do the installation.
According to Bruce Hamilton, Director, Energy Practice at Navigant, there are currently 21 offshore wind projects in about 12 states that are in various stages of planning or development. Together, the projects represent more than 15 GW of capacity.
At this time, however, the only project that is currently under construction is the Block Island Wind Farm, and all of the other projects face giant hurdles that include legal battles, legislative problems and financing issues among other delays.
The offshore wind industry is young and learning, and as it was with early entrants into large-scale solar and wind, companies shy away from being the “first” project out there. “We don’t want to experiment with real-life projects,” said one presenter during the Q&A.
Lots of hope is hanging on the Block Island Wind Farm, which should be online by the end of 2016 if all goes according to plan. The overall message to the oil and gas industry is that there is a pipeline of projects — lots of great work out there — but the offshore wind industry needs more ports, manufacturing partners, logistics providers and legislative help to bring that pipeline to fruition.
“We will continue to build; all we need is the supply chain,” said DONG’s Jeppesen.
Lead image credit: Andreas Klinke Johannsen | Flickr