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Reuters: US Efforts To Restore Offshore Wind Pipeline Spur Factory Investments

Posted by Eduardo Garcia on Feb 15, 2024
Reuters reports on new investments in offshore wind manufacturing from company US Forged Rings, quoting United's Jeremy McDiarmid on the budding U.S. offshore wind supply chain.
US Forged Rings, a new company created by piping group Canadoil, announced plans last week to invest $700 million in a tower fabrication facility and a steel forging plant on the East Coast to supply components to the offshore wind industry.
The factories could produce up to 100 towers per year – enough for two large wind farms – and start operations in the first quarter of 2026. The announcement will be a welcome signal for developers seeking to wean projects off imports from Europe in the next wave of development. The U.S. supply chain outlook remains patchy as many suppliers are waiting for multiple orders and a clearer growth outlook before they commit to building local factories.
Forged Rings has yet to identify the exact location for the facilities.
“This substantial investment serving U.S. offshore wind was spurred by our confidence in the medium and long-term prospects of the U.S. market,” the company said in a statement.
East Coast states have accelerated offshore wind auction, this year to re-establish investor confidence in offshore wind and provide a much-needed pipeline of projects. A number of projects were delayed or cancelled in 2023 due to rising costs and supply chain delays.
Inflation has trended downwards since its peak in 2022 and expectations of interest rate cuts this year should help to attract more investments in the supply chain.
Jeremy McDiarmid, Managing Director and General Counsel at clean energy trade group Advanced Energy United, is “cautiously optimistic” that more manufacturing plants will be announced this year.
But he warned developers will need to source materials from a "blend” of domestic and foreign suppliers for some time.
The use of foreign components and installation vessel exposes projects to global supply markets and the risk of higher prices. Demand for offshore wind components in Europe is set to soar and U.S. offshore wind projects could miss out on a 10% tax credit bonus if they miss a domestic content threshold.
The buildup of a U.S. supply chain is "going to be a slow transition that could be sped up by more coordination between states and consistent, long-term signals that demand for offshore will continue in the future,” McDiarmid said.

Read the full article here.

Topics: United In The News, Offshore Wind, Jeremy McDiarmid