IHS Markit expects $100 billion to be invested in the offshore wind industry over the next nine years, resulting in the U.S. market share of global capacity increasing from (nearly) 0% to 9%.
“Complex and lengthy permitting processes combined with a lack of manufacturing facilities, specialized U.S.-flagged installation and service vessels, dedicated ports plus poor power transmission infrastructure continue to be the key bottlenecks hampering more rapid growth of the U.S. offshore wind capacity,” IHS Markit analysts wrote.
Analysts noted additional challenges caused by the COVID-19 pandemic and high costs for offshore wind projects compared to other carbon-free generation sources.
“Current unsubsidized costs for bottom-fixed and floating offshore wind projects are estimated at $125 per MWh and $225 per MWh respectively, well above wholesale electricity prices and costs for both onshore wind and solar PV.”
The report does, however, signal that permitting speeds and project costs will improve in the coming years. The Dept. of Energy’s planned $3 billion in public financing for offshore projects and an extension to the 30% investment tax credit should also encourage growth for the industry.