Last week, nearly 1,000 industry leaders, government officials, and other stakeholders in offshore wind from around the world convened at the Park Plaza Hotel in Boston for the 3rd Annual U.S. Offshore Wind Conference. Kicking off the first full day of the event, Massachusetts Clean Energy Center (MassCEC) CEO Steve Pike highlighted the optimism and sense of opportunity surrounding offshore wind, bolstered by rapid development of the industry over the past two to three years. Pike, along with many of the speakers who followed him, claimed the U.S. offshore wind industry is at an inflection point, poised to become a major piece of electricity markets here in the northeast.

Pike’s enthusiasm was validated further by the announcement this past Wednesday of a 200 MW procurement of offshore wind from NECEC Member Deepwater Wind by Connecticut’s Department of Energy and Environmental Protection (DEEP), continuing the streak of recent offshore wind procurements in New England. (Notably, Connecticut simultaneously announced fuel cell procurements from NECEC Members Bloom Energy and Doosan Fuel Cell, demonstrating a commitment to a diverse clean energy portfolio.) With this latest wind procurement, Massachusetts, Rhode Island, and Connecticut will together deploy more than 1,400 MW of offshore wind in the near future.

For those who missed the conference, here are NECEC’s top takeaways:

1. The industry will only grow from here. Tom Harres of Bloomberg New Energy Finance (BNEF) noted that BNEF forecasts a cumulative market capacity of 6.2 GW by 2030, though the physical characteristics of current lease areas could sustain as much as 20 GW by that date.
2. Costs will come down, but they are already competitive in some situations. Based on market modeling, Harris predicted a transition into rapidly declining costs after 3-4 GW of capacity are installed nationwide. Yet even today, remarked Deepwater Wind's Bryan Martin, “[y]ou could not build a thermal gas plant in New England for the price of the wind bids in Massachusetts and Rhode Island.”
3. No matter where costs stand, there are other benefits to consider. Until U.S. offshore wind is profitable without subsidies, Harres urges wind advocates to highlight other value adds such as proximity to load center, high winter production (usually the peak for energy prices and emissions), and thousands of industry jobs.
4. Success in Europe is encouraging for U.S. market development. Pat Milligan from German bank Helaba emphasized how rapid improvement in offshore wind in Europe might be emulated in the States. Milligan spoke about the technical advancements in turbines, but also the improvements in the financial structure backing offshore wind with increasing trust in the technology. She also suggested offshore wind in Europe will reach price parity with more conventional energy sources in five to ten years. Such claims concur with Tom Harres’ analysis that the U.S. offshore wind market will capitalize on technological and installation innovations in Europe to rapidly reach subsidy-free offshore wind in the late 2020s. Analysts are expected to get their next major input into future U.S. price projections this fall when the contracts for the Vineyard Wind 83C procurement are evaluated and approved by the Massachusetts Department of Public Utilities (DPU). The Commonwealth’s Section 83C statute, as a reminder, requires that all subsequent bids selected be lower-cost than the prior executed contracts.
5. The U.S. market has unique advantages but must deal with growing pains. According to Tom Harres, larger lease areas as compared to Europe allow for second projects within the same lease, which could benefit from reduced operations and maintenance costs (typically more than a quarter of the lifetime costs). Also, since the developer could more accurately predict the yield for these second-round projects, financers could more confidently invest in them. Still, the U.S. market faces significant immediate challenges, most notably the creation of a supply chain, development of an experienced installation workforce, and the limitations imposed by the Jones Act.
6. Offshore wind continues to appeal in Massachusetts, the nation’s leader. Secretary of the MA Executive Office of Energy and Environmental Affairs (EEA) Matthew Beaton outlined three main reasons for the state’s recent 800 MW procurement: high costs of energy, the Global Warming Solutions Act (GWSA), and concerns about reliability in the regional grid (ISO-NE). Offshore wind helps address all three, and also effectively produces in the energy-intensive New England winter.
7. New York plans to catch up. New York is now in the “execution phase” of offshore wind procurement, promised Doreen Harris, Director for Large Scale Renewables at NYSERDA. The Empire State plans to move quickly in order to take advantage of the federal tax credits (the first solicitation is expected in the coming months).
8. Vineyard Wind is the talk of the town. Several speakers spoke specifically about the 800 MW procurement in Massachusetts, the largest in the U.S. to date. Secretary Beaton noted that Vineyard Wind best fit EEA’s criteria of low cost (weighted ~75 percent) and qualitative factors (weighted ~25 percent), though he emphasized how professional and competitive each of the bids from Vineyard, Deepwater Wind, and Orsted were. Walter Cruikshank, acting director of the Bureau of Ocean Energy Management (BOEM), affirmed that BOEM is reviewing the construction and operation plan and will have a draft Environmental Impact Statement to share this fall.
9. Developers want more procurements, and sooner is better. Francis Slingsby, Head of Strategic Partnerships at Orsted, and Lars Thaaning Pedersen, CEO of Vineyard Wind, emphasized the urgency of creating new procurements in Massachusetts and other states before the federal tax credit deadline in December of 2019. Subsequent procurement efforts will get underway soon in Massachusetts for the remaining 800 MW of authorization under 83C, as required by law.
10. Companies are committed to growing the U.S. market. John Lavelle, CEO of Offshore Wind at GE, declared the company is going to compete in the U.S. with their new 12 MW turbine, planned for serial production in 2021/2022. These turbines will have double the capacity of those installed at the country’s only existing offshore wind farm off Block Island, RI.
11. The federal government, a crucial participant, is supportive. Walter Cruikshank, acting director of the Bureau of Ocean Energy Management (BOEM), recognized how offshore wind promotes the agency’s goals for the U.S. energy system, particularly security, affordable and competitive production, and support for jobs. BOEM has granted 11 active commercial leases and plans to offer two more lease blocks off Massachusetts later this year. Further, the Royalty Policy Commission of the Department of the Interior recommended in a recent report that BOEM grant 20 GW of leases over ten years, starting in 2024.