U.S. offshore wind generation goals have a supply chain problem
The growth of offshore wind generation in the U.S. faces challenges caused by an immature supply chain and insufficient resources, according to an industry report.
The report – sent by renewable energy research firm Lium to its clients – said the Biden administration’s goal of 30 gigawatts of offshore wind production by 2030 is possible, despite the obstacles facing the industry.
“Most of the research to date on U.S. offshore wind power addresses governmental action and the status of widely publicized East Coast wind farm projects,” the authors wrote. “In this report, we tackle the missing link that doesn’t exist yet and thus doesn’t get the airtime it deserves – domestic supply chain.”
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Biggest takeaways from the report:
• Because it doesn’t exist yet, the many facets of the US OW supply chain are not yet well understood or reported
• Immature supply chain poses the biggest risk to US OW generation goals; however our models show enough progress to remain confident in Biden’s 30GW by 2030 target
• US OW supply chain capex could total $200bn+ through 2035, higher than the $100-$150bn that most participants anticipate
• Lium’s US OW boat database shows urgent vessel construction needs with only 1 of the 23 global WTIVs we track located in the US today (need as many as 8 through 2035)
• Public turbine providers (GE, SGRE, VWS) are the most obvious beneficiaries (30% of wind farm spend)…
•…But hundreds of companies public ( ie NETI, NOV, GFI, HLX) and private are developing business in emerging US
Analysts described the U.S. offshore wind domestic supply chain as nonexistent and “a hole in the US (offshore wind) roadmap. Less than 10 turbines are currently installed in U.S. waters
But with record funding available for renewable and clean energy projects, there’s plenty of opportunities to solve the problem. Lium analysts expect the U.S. offshore wind supply chain to build out much like the European market did, utilizing sustainable funds and direct government appropriations.
The Dept. of Energy already launched a $3 billion offshore wind loan program and the Biden administration’s $1.2 trillion infrastructure bill includes grid upgrades that will benefit offshore wind generation.
Additionally, the report notes, a large fleet of marine vessels must be built – or retrofitted – to install and service offshore wind projects.
“We estimate 5-10 WTIVs will be needed (build cost of $500mm per vessel with a lead time of 24-36 mos). The first U.S.-flagged WTIV is under construction for 2023 delivery, and a handful of foreign-flagged WTIVs may enter US waters as well. The industry will also need 10-12 SOVs initially at $100mm build cost per unit (the SOV fleet will scale up with turbines in water). The first U.S. SOV is under construction now. Dozens of CTVs are also needed.”
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Read the full report here: