This was going to be the year that offshore wind energy made a giant leap in the United States. Then the coronavirus arrived.
An offshore wind trade group said its main concern is the health of its workers, but the group also worries that the virus will slow or stop work throughout the chain of suppliers and other service providers.
This could be said for just about any industry, but offshore wind is different in that it is in a formative stage, with almost no projects up and running, and more than a dozen in various phases of development along the East Coast. As a result, the industry faces challenges much greater than simply pausing work in an established supply chain.
“We see the virus situation slowing everything down, economywide, and our effort is to try to move these projects ahead as fast as possible to save the jobs, to keep the people in the supply chain working,” said Jaime Steve, senior vice president for policy and programs at the Business Network for Offshore Wind, a trade group.
He told me the stakes are high because offshore wind farms are an essential part of how several East Coast states plan to meet ambitious energy and emissions standards. Prolonged delays would affect the timetables for making much needed progress in the transition to clean energy.
The country’s only operating offshore wind project is the 30-megawatt Block Island Wind Farm off of Rhode Island, which went online in 2016.
Other projects, adding up to about 9,100 megawatts, are in various stages of development off the coasts of Virginia, Massachusetts and other states, with at least one set to begin construction this year and several others that could be close behind.
At the same time, states have set goals that add up to more than 25,000 megawatts of offshore wind, a number that has been ever-growing, with Virginia’s governor likely to sign a measure that sets a target of 5,200 megawatts by 2034, more than double the previous level of 2,500 megawatts. New York has the largest target, with 9,000 megawatts by 2035.
So that’s the big picture. Here are some specifics.
The next project to begin construction is a small one, the 12-megawatt Coastal Virginia Offshore Wind project, which was recently on track to have “iron in the water” as soon as May, Steve said. It is not clear whether virus-related slowdowns have affected this timetable.
The Virginia project, with two turbines, is a dry run of sorts for testing how larger projects will be built and getting a clearer idea of how wind turbines perform in a variety of weather conditions in the region.
This data will be important for a much larger project planned for the same area, the 2,640-megawatt Dominion Energy wind farm, which would go online starting in 2024 and be the largest offshore wind farm in the country.
In Massachusetts, developers of the 800-megawatt Vineyard Wind 1 project had hoped to begin construction last year, but are waiting because federal regulators have said they need more time to assess environmental impacts before issuing a permit. As ICN’s Phil McKenna and I wrote last summer, some environmental advocates see a double standard, with the Trump administration pushing to ease permitting rules for fossil fuels while taking a long and thorough look for offshore wind.
The Department of Interior’s Bureau of Ocean Management said last month that it would issue its findings on Vineyard Wind 1 no later than December 2020, which is much later than developers had expected. This delay means the project will not hit its goal of being operational by 2022, the developers said.
Vineyard Wind 1 is important for the offshore wind industry because it’s the first project of its size to be built in North America, following a time when development has been mostly limited to Western Europe and China.
While there is little the industry can do to control how long the virus-related disruption lasts, industry leaders say there are some actions the government can take to help accelerate projects. One is for Congress to increase funding for the Department of Interior office that reviews permits for offshore wind projects, allowing for the hiring of more people and a faster review process.
The Business Network for Offshore Wind and the American Wind Energy Association are asking Congress to budget $32.5 million to pay for offshore wind work at Interior, which is more than the $26.5 million the Trump administration has requested. The difference—$6 million—seems like peanuts in a week when we’re talking about a $2 trillion stimulus bill.
The wind groups also would like some big-ticket items, such as extensions of tax credits, none of which made it into the stimulus bill.
The larger point is that these early steps in offshore wind development need to happen so companies can find ways to improve their processes, and then ramp up the scale.
So far, this feels like a race where everyone’s hanging around the starting line, and the disruption caused by coronavirus only makes this worse.
Global Wind Energy Was Poised for a Record Year. How’s That Changed with Coronavirus?
Forecasters continue to try to get a handle on how much coronavirus will hurt global renewable energy development. This week, we have a new report that cuts 2020 estimates for global wind capacity by 6.5 percent.
Wood Mackenzie says it expects 73 gigawatts of new wind projects to be built this year, down from 77 gigawatts in its previous 2020 forecast, issued three months ago. The change is almost completely due to coronavirus and its effects on workers and the economy, said Dan Shreve, Wood Mackenzie’s head of global wind energy research.
“There are new developments every single day and sometimes hour by hour,” he said.
An example: India, one of the half-dozen largest wind energy markets in the world, announced a nationwide lockdown this week, which will almost certainly affect projects there, but it happened so recently that it’s not reflected in the forecast.
Last week, I wrote about how a new solar power forecast from BloombergNEF showed the potential for the first down year for global solar since at least the 1980s. A down year is much more common in the wind industry, which has a history of ups and downs based largely on national policies that lead to a rush to start projects before incentives expire.
Even with the reduced forecast for wind power, 2020 will probably still be a record-setting year for the world, far ahead of the previous high of 63 gigawatts in 2015.
The U.S. also is probably heading for a record year, with 14.7 gigawatts in the new 2020 forecast, down from 15.2 gigawatts in the previous forecast.
But all those numbers could vary substantially depending on how long and how extensive virus-related interruptions turn out to be. In the U.S. this gets even more complicated because different states have different levels of restrictions.
“The key piece of this is understanding worker mobility as it applies to these different degrees of lockdowns,” Shreve said.
And that’s changing almost daily.
As Coal Industry Seeks Federal Aid, How Does Its Jobs Footprint Compare to Renewable Industries?
The coal industry’s leading trade group is seeking a government rescue from the economic damage of coronavirus.
Reuters was the first to report last week that the National Mining Association has asked the administration to take executive action to suspend or reduce royalties and reduce the industry’s obligations to pay for mine cleanup and health assistance to victims of black lung disease.
“The coal industry is absolutely critical to securing a domestic, secure supply of affordable energy,” said Rich Nolan, the group’s president and CEO, in a letter to Trump and congressional leaders.
The request is predicated on the idea that the coal industry is vitally important for electricity generation and employment. But coal is fading on both these fronts, which is reducing the tremendous harm to the climate caused by burning the fuel.
The industry employed 50,600 people as of February, down 35 percent from a decade ago, according to the Bureau of Labor Statistics. Coal-fired power plants generated 23.5 percent of the country’s electricity last year, down from 44.4 percent in 2009, according to the Energy Information Administration.
At the same time, renewable energy is rapidly growing, producing 17.5 percent of the country’s electricity last year and on track to surpass coal in the next few years. The solar industry—just one of several clean energy industries—employed 249,983 people last year, according to the Solar Foundation. (The Bureau of Labor Statistics doesn’t yet have a reliable way of tracking overall solar employment, so I’m using the Solar Foundation figure.)
Renewable energy industry groups are calling for their own aid packages from the government, including extension of tax credits and changes that would allow earlier access to the credits.
The Solar Energy Industries Association said this week that its industry could lose up to half of its workforce because of the virus. This is not much of a stretch, considering that a large share of jobs is dependent on large projects being built, and many large projects could be on hold.
“These are well-paying jobs that put food on the table and keep the lights on,” said Abigail Ross Hopper, president and CEO of the association in a letter to Congress.
The underlying reality is that many industries are in freefall as the economy around them deteriorates and the government will need to decide who to help and to what extent.
None of these groups, in renewable energy or in fossil fuels, got help from the $2 trillion stimulus this week, but there will be plenty of other opportunities for Congress and the administration to take action.
I’ll be watching to see how this unfolds, knowing that the Trump administration has been a supporter of the coal industry, and also that renewable energy industries are far better positioned to contribute to growth in jobs and investment.
Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to email@example.com.