Opportunities for European firms with expertise in offshore wind could be dealt a blow if a new bill becomes law in the US.
The Coast Guard Authorization Act of 2023 would be in addition to the Jones Act, which already restricts non-US crews and vessels from transporting cargo between US ports.
The bill includes provisions on the crewing of vessels for energy projects, which would result in vessel owners having two options, says Philip Lewis, director Research at Intelatus Global Partners, a business intelligence firm: matching crew nationality to flag of vessel; or manning the vessel with American mariners only.
The US House Transportation and Infrastructure Committee, he says, has recently reported favourably on the bill, which indicates it has a chance of being implemented.
Another bill that could have an impact on federal projects at state level is one proposed by senators Tim Moffitt and Bobby Hanig, in North Carolina.
The North Carolina Senate Bill 687 proposes a 10-year moratorium on wind farms in state waters - and while this does not cover the outer continental shelf, it would forbid transmission infrastructure to pass through state waters, thus making it impossible to build wind farms further out.
Neither bill has a certain timeline for implementation.
“The Department of Defense has raised objections to four of the six proposed Central Atlantic Wind Energy Areas, slowing down the leasing timetable,” says Lewis. “We note the reintroduction of provisions in a Senate Bill that may restrict foreign mariners from working on US wind projects and new provisions restricting anchor handling operations to Jones Act vessels.
“We believe that these provisions, if they become law, will have unintended cost and schedule consequences on the manning of construction vessels for both bottom-fixed and floating wind projects. This comes at a time where developers are already signalling concerns on escalating project costs.
“As an indicator of cost differences between US and European offshore wind projects, we note the current loan review under MARAD Title XI for three service operation vessels being built for US offshore wind projects: the capital cost of the vessels built in the US ranges from $97 million to $168 million. Vessels with similar specifications due for delivery to European operators in the same timeframe range from $62 million to $69 million, which represents a US premium of around 56% to 142%.”
Signs of hope
However, it’s not all bad news for the sector.
Philip Lewis says that federal permits are going ahead as planned, with other states laying out plans to accommodate ever larger offshore wind into their onshore grids - at a price.
“Our forecast accounts for more than 70 projects that will install over 77GW of capacity in this and the next decade, and a total 110GW by 2050,” he says. “The 77GW forecast capacity will require capital expenditure amounting to over $240 billion to bring onstream, a recurring annual operations and maintenance spend of around $11 billion once delivered, and close to $35 billion of decommissioning expenditure at the end of commercial operations.”
Intelatus forecasts that 14 projects will get final investment decisions over the next 18 months.
