Report Lays Out $68-Billion Opportunity for U.S. Offshore Wind Suppliers
A flurry of state-level commitments to offshore wind in the United States adds up to US$68.2-billion in contracts to build 18.6 gigawatts of new capacity through 2030—but only if investors can see the opportunities shaping up, according to a University of Delaware report last month that aimed to provide a “first-of-its-kind singularity” into the supply chains that will drive the industry.
The university’s Special Initiative on Offshore Wind (SIOW) compiled the report because potential investors needed “a much greater level of clarity and transparency on the U.S. market and how it is likely to unfold, especially in the near term,” project director and lead author Stephanie McClellan told Greentech Media.
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Otherwise, she warned, “we are likely to have very limited competition, not only among developers but in the supply chain for folks like turbine manufacturers and other [original equipment manufacturers] who might say, ‘If we don’t know that there’s a market there, why should we spend our time there when we could spend our time in Europe?’”
The big dollar figure in the report includes 1,700 offshore wind turbines and towers worth $29.6 billion, 1,750 offshore turbine and substation foundations at $16.2 billion, 5,000 miles of cabling at $10.3 billion, 60 onshore and offshore substations at $6.8 billion, and another $5.3 billion for marine support, insurance, and project management. The report projects business volumes by state and by year, with Connecticut and New York each expected to schedule hundreds of megawatts of new capacity every two years through 2030.
McClellan said that level of detail was needed to give suppliers a chance to assess the opportunity.
“We know the lease areas. We know how much acreage has been leased. We know the project developers who have leases. We have seen timelines of proposed projects and their estimated time for operating and being in the water. And we know the large [state-level] goals,” she said, paraphrasing what she heard from the industry.
But “none of that means anything to us in trying to understand what it means in terms of a business opportunity.” They’re concerned about the timing of projects, and whether an initial flurry of activity might be followed by a lull.
Liz Burdock, CEO and president of the non-profit Business Network for Offshore Wind, said the industry “has been a black box for many U.S. companies” until now. But “European suppliers are already hitting capacity constraints, which is accelerating the search for U.S.-based solutions and provides an opportunity for American companies to enter the market.”
So “visibility and a better understanding of the timing and pace of projects allows companies to seriously consider diversifying into the industry, and to make human capital and equipment investments required to establish a U.S.-based offshore wind supply chain,” she told Greentech