In an opinion piece featured in NJ Spotlight News, United's President and CEO Heather O'Neill writes about the storm of challenges the offshore wind industry faced in the last few post-pandemic year and highlights four key steps to getting the industry back to full power.
After a turbulent 2023, the new year brought some welcome news for the offshore wind industry. Power started to flow from New York’s South Fork Wind and Massachusetts’ Vineyard Wind soon followed suit, meaning that America’s first large-scale projects are now sending clean electricity to its shores for the first time. Meanwhile in New Jersey, the state granted two offshore wind solicitation awards in January, totaling 3,742 megawatts of capacity, enough to power 1.8 million homes when fully operational.
Plans to build these two pioneering projects in New York and Massachusetts were made years before the pandemic brought choppy economic seas for all of us. But for the projects that were expected to follow, including in New Jersey, last year also brought a metaphorical storm to the industry: permitting delays, supply chain challenges, installation vessel holdups and ballooning interest rates that suddenly made it more costly to build. Some developers terminated their contracts and the states that granted them found themselves having to play catch-up.
Make no mistake, the problems faced by these projects aren’t offshore wind problems, they’re construction industry problems. One of the biggest factors in all of this was inflation, which doesn’t just make the cost of our groceries go up, it makes it more expensive to build new infrastructure. It simply costs more to build everything from houses, to bridges, to office buildings.
So, where do we go from here? The clear — and perhaps only — choice is to keep moving forward even as we learn from the experiences of 2023. Offshore wind holds too much potential to grow jobs and our regional economy, is too essential a tool for hitting our clean-energy goals, and too critical a power generation source for our growing electricity needs to simply let this opportunity languish instead of forging ahead with a better plan.
There are four key steps we need to take to get offshore wind back on track.
First, we need our governors and our president to maintain their commitments to offshore wind to meet state and national climate goals. President Joe Biden’s target of 30 gigawatts of offshore wind by 2030 created a national vision. And even in the face of economic turbulence, and despite attempts from the fossil fuel industry to mislead the public, governors from Massachusetts to Maryland — including Gov. Phil Murphy — have been steadfast in promoting this resource and growing this new industry. Vocal, unwavering support from public leaders sets the tone.
Second, states should work together to coordinate development offers in pursuit of shared goals. The southern New England states have coordinated in their current round of offshore wind bid requests and 10 East Coast states have formed a collaborative effort to make sure the regional grid can accommodate new wind power. These are good steps, but states need to go further by creating joint procurements with coordinated schedules that reflect long-term commitments. Regional procurements will give nascent supply chains the ability to grow and allow developers to manage the use of key infrastructure like ports, shipping vessels and equipment suppliers.
Third, states’ strategies for buying offshore wind energy must continue to evolve. Historically, states have put out individual requests for proposals, then selected among submitted bids before finally signing contracts with a winning developer. The resulting contracts lacked the flexibility to evolve with changing economic conditions and did not always contemplate what other states were doing to procure offshore wind. With the experience of 2023, states are already starting to build more flexibility and dynamism into their bid requirements, allowing for modest price adjustments, up or down, based on external economic factors beyond the control of developers.
Fourth, we need to ready the power grid for more offshore wind power. Across our nation, the system of transmission lines and grid stations is showing its age and the limits of decades of underinvestment. Offshore wind, like other new resources, will require significant investments in the grid to make sure the electricity produced at sea gets to the homes and businesses that need it on land. This, again, is an opportunity for states and regions to work together to plan and build smartly — to deliver a wide variety of benefits that will keep the lights on, enhance our grid and keep costs down. To achieve this, states, regional grid operators and the federal government must design new ways to pay for transmission, accelerate glacially slow development timelines and embrace technological advances to make the system as efficient as possible to move clean energy where it’s needed.
At Advanced Energy United, we’re working with offshore wind and transmission developers and all the kinds of companies we need to create a 100% clean-energy future to find policy solutions that work for both communities and industries. I know if we remain resolute, creative and persistent, 2024 will be the year the offshore wind industry solidifies its place as a cornerstone of the clean-energy revolution in New Jersey and across the Northeast.
Read the full article here.