US seen to reach 21 GW of offshore wind by 2030, short of target

The US is likely to fail in achieving President Joe Biden’s offshore wind target of 30 GW by 2030 as it is expected to install 21 GW of offshore wind turbines by the end of the decade, according to IHS Markit (NYSE:INFO).

The Clean Energy Technology service at IHS Markit expects the US offshore wind industry to see more than USD 100 billion (EUR 85bn) of investment over the next nine years and grow rapidly from just 42 MW now, expanding its share of the global installed offshore wind capacity from close to 0% to about 9% in 2030.

Offshore wind growth in the US will be fuelled by an increase in state-level policy commitments, federal lease sales, offtake agreements and supply chain activities, the analyst firm says.

Yet, the 2030 target will remain out of reach due to a number of bottlenecks such as complex and long permitting processes, a lack of manufacturing facilities, US−flagged installation and service vessels, dedicated ports, and poor power transmission infrastructure.

IHS Markit also noted that offshore wind costs remain high but the technology offers benefits compared to cheaper onshore wind and solar like higher capacity factors and proximity to load centres. Unsubsidised costs are currently estimated at USD 125 (EUR 106) per MWh for bottom-fixed and USD 225 per MWh for floating offshore wind projects. Costs are projected to fall steeply in the coming decades, but offshore wind will stay relatively expensive, says IHS Markit.

According to the firm, the sectors will offer enormous investment opportunities once the initial challenges are resolved.

“Over time and with scale, as more and more offshore wind farms in the United States are consented, equipment manufacturers will be more willing to invest and build local supply chains and new installation vessels,” said Andrei Utkin, principal analyst, clean energy technology at IHS Markit. “But it will be a gradual process as the industry needs to see a rich pipeline of consented projects and a clear regulatory framework before committing to invest billions of dollars in local factories,” Utkin added.

(USD 1 = EUR 0.847)

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