Challenges and Uncertainties Surrounding Offshore Wind

Spilman Thomas & Battle, PLLC

Spilman Thomas & Battle, PLLC

Renewable energy has become a major topic for governments and private companies alike. As the world attempts to pivot towards renewable energy, offshore wind has developed as a potential part of the solution but comes with significant challenges. 

The linked articles discuss the various hurdles and potential solutions to incorporating offshore wind energy as a viable component of a renewable energy future. “The US has big plans for wind energy—but an obscure 1920s law is getting in the way” addresses the Biden administration's goal to deploy offshore wind turbines capable of generating 30 gigawatts of power by 2030 (more than 2,000 turbines) and the obstacles to reaching that goal. With such an ambitious goal, the U.S. would need to install turbines cost-effectively and efficiently, which requires the use of wind turbine installation vessels (WTIV) that are specifically designed to support the installation of offshore wind turbines. 

Due to a century-old law known as the Jones Act, however, efficient installation of turbines using WTIVs has proven impossible. The Jones Act requires anyone transporting goods from one point in the U.S. to another to use an American ship. Offshore wind turbines fall within this requirement. 

Because there are no American WTIVs, current offshore wind projects are being installed using expensive, inefficient barges to transport the turbines. The only Jones Act-compliant WTIV currently under construction has already had its completion date set back from 2023 to 2025. Due to the lack of WTIVs and the resulting increased costs, at least two offshore wind projects have already been canceled in the U.S.        

With U.S. offshore wind production stalled, “Google ramps up green power supply with offshore wind PPA” details how Google recently signed its largest ever offshore wind project power agreement with a developer in the Netherlands as it works toward its renewable energy targets. Despite matching its energy use with 100 percent renewable energy in 2017, Google now plans to "operate on carbon-free energy around the clock by 2030." While the article does not address whether Google tried to access offshore wind power in the U.S., the current struggles facing American offshore wind development may have been a contributing factor to Google looking to the Netherlands for such power.   

While the U.S. is facing a country-specific limitation to offshore wind development, “Seabed could become huge green energy store to help fund offshore wind boom” addresses a potential solution for yet another challenge presented by wind energy – its intermittent nature makes it unreliable as a base supply of power. To address this challenge, scientists from Norway proposed the use of subsea pumped hydro storage to transform parts of the ocean floor into large-scale utility energy storage that would ideally be co-located with deep-water offshore wind farms. 

When energy from wind farms is in excess of demand, that power could be used to pump water out of the hydro storage system. When energy from wind is below demand, water will rush into those systems and pass through turbines to generate electricity thereby helping to alleviate the intermittent nature of wind power. Recognizing the recent cancellations of offshore wind projects, the researchers noted that this solution could improve revenue streams for operators and thus promote offshore wind development.                

The three articles demonstrate a desire for offshore wind to be a part of renewable energy efforts that is being hindered by added costs and inefficiencies. As demonstrated by Google, the demand for renewable energy is likely to continue growing in the coming years. While the U.S. is facing a unique obstacle to developing offshore wind due to the Jones Act, reliability concerns with wind power in general still need to be addressed on a larger scale. 

The need to develop solutions to these problems likely will result in significant near-term costs. While some of those costs may be borne by governments and shareholders of various private companies, many of those costs likely will be borne by customers as well. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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