Offshore Wind Expansion

Offshore Wind Gears Up For Expansion

Written by Green Chip Stocks
Posted October 20, 2010 at 3:43PM

A new offshore wind study was just recently released by the National Renewable Energy Laboratory (NREL). Here are some of its findings. . .

Although the United States is a leader in land-based wind energy generation, it has zero offshore wind energy generators. The United States has effectively ceded the offshore wind market to Europe, with over 830 turbines, or 2,300 megawatts, in nine European countries. However, with over 50,000 additional megawatts now under development for 2011, offshore wind energy is finally starting to gain some traction in the United States, as well as in China and Canada, too.

With roughly 20 projects in the planning and permitting process, the U.S. will have 2,000 megawatts of offshore wind energy capacity in just a few years.

One of the biggest impediments to current wind energy development is the challenge of intermittency. However, offshore wind energy remedies this shortcoming because of the strength and consistency of coastal winds. Harder winds can enhance energy efficiency, dramatically increasing wind energy’s cost-competitiveness with other forms of power generation.

These gains in efficiency and widespread implementation of offshore wind energy would significantly assist the United States . . .

  • Achieve 20% of domestic electricity from wind by 2030: NREL’s least cost optimization model found that 54 GW could be added by offshore wind.

  • Catalyze the manufacturing sector: building 54 GW of offshore wind energy would result in an estimated $200 billion in new economic activity and create more than 43,000 permanent, high in human capital technical jobs in manufacturing, construction, engineering, operations and maintenance.

Of course, these opportunities do not come without significant challenges. Technology-wise, new construction mechanisms will eventually need to be developed to cost-effectively produce turbine blades greater than 70-meters in length. These blades must also be constructed to rotate faster than land-base wind turbines. In addition to technology, developing a foundational infrastructure that is capable of producing wind turbines at low-cost is essential. Because capital costs are twice as high as land-based wind turbines, there is an urgency to develop cost-reduction measures.

But despite these challenges, offshore wind can still be expected to offer up a significant portion of U.S. market share in the energy sector, without the introduction of new technology. Because ultimately, the gains of offshore wind energy do outweigh the early costs. If we take a simple lesson in economics, the goal is to profit maximize – not cost minimize. If the latter was the case, we would never pursue innovation measures. The reality is that every technology has costs, but the question is do the benefits outweigh those initial costs. This seminal offshore wind energy study by NREL adds to the existing literature that wind energy does have the potential to capture a giant share of the market and remain profitable.

To view the entire 240 page report, click here.