Demand for offshore wind in the US is booming which is a great opportunity for European offshore manufacturers to offer up their expertise in the sector.
The Business Network for Offshore Wind’s annual US Offshore Wind Market Report reveals that demand for offshore wind in the United States nearly doubled in 2022 and investments in the market tripled, marking an inflection point when the industry began its transition to commercial-scale operations.
“From surging investments to cutting-edge floating turbine technology on the West Coast, passage of the landmark Inflation Reduction Act and federal regulatory efforts that bring more certainty to permitting, 2022 kicked the American offshore wind industry into full throttle,” said Liz Burdock, president and CEO of Business Network for Offshore Wind.
“A visible pipeline of projects has emerged with half a dozen projects finalizing environmental review and another 11.4 GW of new areas leased for future development.”
One key finding of the report is that offshore wind-related contracts grew by 36% in 2022 and over the year, 664 new organisations registered with the Network’s Supply Chain Connect registry, representing a 27% increase.
Long-term state offshore wind targets increased an astounding 79% last year, as California laid down a powerful industry marker by calling for 25GW of offshore wind generation and Louisiana, New Jersey and Rhode Island also announcing new state goals.
The US offshore wind market saw US$9.8 billion in new investments in 2022, more than triple the year prior. While this growth was primarily driven by lease auction fees, over US$4.4 billion was directed to port infrastructure, supply chain development and transmission. The Network has identified US$17 billion in new investments driven by offshore wind activity in the United States since 2014.
The report also includes a forecast of what the offshore wind industry can expect in 2023.
In 2023, the American market will transition from demonstration to commercialisation with the first two commercial-scale projects, Vineyard Wind and South Fork Wind, set to begin foundation and turbine installation and producing electricity.
Meanwhile, the Inflation Reduction Act will drive alternative uses of offshore wind power and new market opportunities are emerging globally that harness offshore wind’s power output for alternative uses, including green hydrogen production, green ammonia production and carbon sequestration activities. The first major US announcement pairing green hydrogen and offshore wind occurred last year in Louisiana.
There will also be new construction on wind turbine installation vessels. With a glaring market need, federal funding available, increased confidence in the US permitting system and multiple designs with financial backing on paper, one or two more US-market wind turbine installation vessels (WTIV) concepts could begin construction this year.
Some European manufacturers are already taking advantage of this booming market in a sector in which they’re already well experienced.