In line with the Biden-Harris administration’s “whole-of-government” approach to climate change announced in its Executive Orders on Days 1 and 7, on March 29, the administration announced a variety of concrete initiatives that executive agencies will take to accelerate the development, licensing and construction of offshore wind projects in the United States and boost the already growing industry as a whole. In addition to highlighting the importance of offshore wind in reducing carbon emissions and combating climate change, the announcement highlighted the substantial collateral benefits the administration expects from the growth of offshore wind, including jobs, investments and related infrastructure improvements.
The most significant element of the administration’s announcement is a new goal shared by the U.S. Departments of Interior, Commerce and Energy to deploy 30 gigawatts of offshore wind power generation capacity to ‘by 2030, far exceeding the administration’s previous goal of’ doubling ‘wind power production at sea. by 2030. The administration stressed that this goal is a stepping stone to its broader goals of net electricity generation in the United States by 2035 and net carbon emissions in the United States by 2050, as previously announced.
The Biden-Harris administration summarized the initiatives, described in more detail below, as falling into three categories: (1) advancing wind energy projects to create jobs, (2) investing in U.S. infrastructure to strengthen the national supply chain and deploy offshore wind energy, and (3) support critical research and development and data sharing.
The announcement cited many benefits that the administration says will come from an offshore wind boom:[ing] new supply chains stretching to the heart of America, “triggering” more than $ 12 billion a year in capital investment in projects on both coasts of the United States, creating[ing] tens of thousands of well-paying union jobs, with more than 44,000 workers employed in offshore wind by 2030 and nearly 33,000 additional jobs in communities supported by offshore wind activity, ”the growth of the supply chain such as increased demand for steel “equivalent to 4 years of production of a typical US steel mill”, and port upgrades and construction of transport vessels and installation of specialized equipment potentially representing more than a billion dollars of investment.
The announcement also included the following initiatives designed to meet the “30 for 30” target for offshore wind deployment.
New rental area
The Bureau of Ocean Energy Management (BOEM) will make available a new area in “New York Bight” – the area between the coasts of Long Island and New Jersey – for a rental auction scheduled to take place in late 2021 or early 2022.
Accelerate existing projects in development
In line with BOEM’s February announcement to speed up the licensing process for Vineyard Wind, which is slated to become the first commercial-scale offshore wind project in the United States, BOEM also announced a notice of intent to Prepare the Environmental Impact Statement (EIS) for Ocean Wind, a proposed 1,100 MW project off the coast of New Jersey. The EIA is the critical element and the longest lead time in the full permit approval process that a project must pass before it can be built. Once built, Ocean Wind is expected to be the third commercial-scale offshore wind project in the country (with the South Fork Wind project off the coast of Rhode Island considered the second), and it could power approximately 500,000 homes in New Jersey.
Invest in port infrastructure
The construction and ongoing maintenance of offshore wind projects requires specialized vessels, the transport of massive equipment and components, the storage of such equipment and, therefore, ports within a useful distance from projects with specialized configurations and capabilities. . Two separate new sources of funding will now be available for the development and construction of such ports or the modernization of existing ports to have such capacities.
First, following the appropriation by Congress in 2020 of $ 230 million for “port and intermodal infrastructure projects,” the US Department of Transportation issued a funding opportunity notice to officially launch the process. request for states and municipalities to apply for such funds through the Port Infrastructure Development Program. A separate press release from the Department of Transportation noted that not only would the department consider how the proposed projects contribute to economic vitality, but also “how the proposed projects address the impacts of climate change and environmental justice and advance racial equity, reduce barriers to opportunity and address challenges facing rural areas.
Second, the Department of Energy’s Loan Programs Office (LPO) released a fact sheet regarding up to $ 3 billion in loan guarantees through the Innovative Energy Loan Guarantee Program. of title XVII of the LPO. The White House announcement described the release of the LPO’s fact sheet as signaling that the LPO “is open for business and ready to partner with developers, vendors and other transmission finance partners. offshore and offshore wind turbine to evolve the US offshore industry and support work. “The conditions of eligibility for the program include the requirements that the applicable project (1) must consist of innovative technology, (2) provide greenhouse gas benefits, (3) be located in the United States, and (4) have a reasonable prospect of reimbursement. The LPO fact sheet highlights projects such as manufacturing facilities for foundations, placement and docking yards, blade manufacturing facilities and shipbuilding as the types of infrastructure needed to boost the wind industry off shore, noting that such projects would likely meet the “innovative technology” requirement and be good candidates for LPO guarantees.
Support research and development
The announcement included three new initiatives targeting support for research and development and data sharing.
First, the National Offshore Wind Research and Development Consortium (a partnership between the Department of Energy and the New York State Energy Research and Development Authority) awarded $ 8 million to 15 different offshore wind research and development projects, which will each focus on “supporting structure innovation, supply chain development, power system innovation and mitigation of user conflicts” to “help reduce barriers and costs for the deployment of offshore wind power “.
Second, the Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA) will sign a memorandum of understanding with Ørsted to share data relating to the waters leased by the Danish developer (Ørsted is currently party to five leases with the US government for the phase development of offshore projects in federal waters, and is the owner and operator of the only two existing US offshore wind projects, the Small-Scale / Test Block Island Wind (which it owns) and the Coastal Virginial Offshore Wind Project (which ‘it operates)). The announcement describes the deal as “the first of its kind between an offshore wind developer and NOAA [that] sets the stage for future data-sharing deals that NOAA expects to make with other developers. “
Third, NOAA, in partnership with the Departments of Energy and Trade, will issue a request for research proposals and provide at least $ 1 million in grants to research the benefits that offshore wind will provide to stakeholders such as fishing and coastal communities and “opportunities to optimize ocean co-use.
The announcement came just two days before the administration released the U.S. Jobs Plan outlining what it plans to include in an upcoming infrastructure bill. While the US Jobs Plan does not include any new proposals specific to offshore wind, it does include support for industry cornerstones such as transportation, offtake and port infrastructure. For example, it calls for investments in the electricity grid and the creation of a grid deployment authority under the Ministry of Energy to stimulate, improve and modernize the transmission system (necessary to efficiently deliver electricity from offshore projects on land / where demand is); a proposed investment tax credit and production tax credit for energy production and storage (thereby increasing the demand and utility of variable sources of generation such as wind); and investments to improve US ports and waterways (necessary to efficiently transport and store turbine components and build and maintain offshore projects).
While the fate of the infrastructure bill and the inclusion of possible additional provisions to benefit offshore wind remain unknown at this time, the announcement provides a prime example of what the Biden-Harris administration is considering. in its “whole-of-government” approach to climate initiatives.