Calif. unveils largest U.S. offshore wind target

Source: By David Iaconangelo, E&E News • Posted: Tuesday, May 10, 2022

WindFloat Atlantic is a wind energy project located off the coast of Viana do Castelo in northern Portugal.

WindFloat Atlantic is a wind energy project located off the coast of Viana do Castelo in northern Portugal. Hugo Amaral / SOPA Images/Sipa USA (Sipa via AP Images)

California energy officials have released a draft of the West Coast’s first road map for offshore wind, calling for more gigawatts of electricity from the resource than any other U.S. state to date.

In a report made public Friday, the California Energy Commission staff recommended building 3 GW of offshore wind by 2030, followed by a larger wave of development in subsequent years. By 2045, staff found, the state should produce anywhere from 10 GW to 15 GW from turbines located off its coast, enough to power roughly 10 million to 15 million homes.

That amount exceeds New York’s 9 GW target for 2035, currently the country’s largest long-term goal. The California plan was celebrated by offshore wind advocates, who have spent years pushing state officials to set the targets.

Adam Stern, the executive director of Offshore Wind California, which represents large prospective developers, called it “very encouraging news and an important milestone” for the state’s industry.

The goals “show that California is serious about ‘going big’” on offshore wind, Stern said in a statement.

Johanna Neumann, a senior campaign director at Environment America’s Research and Policy Center, said the plan showed California was serious about hitting its goal of a 100 percent carbon-free grid. Environment America was one of eight environmentalist, organized labor and clean energy groups that wrote last week to Calif. Gov. Gavin Newsom (D) in support of targets similar to those in the plan.

A finalized version of the road map could come as soon as next month. Its recommendations stem from a law passed last year, A.B. 525, which tasked the California Energy Commission with drawing up a statewide offshore wind target. Three other planning documents are due next year, ranging from a strategic plan and a permitting road map to an assessment of economic benefits and workforce demands. All of the documents will inform the state’s resource procurement process, in which regulators and utilities plan how the state will source its electricity. By 2045, California must receive 100 percent of its power from carbon-free resources.

The state’s progress on offshore wind could ultimately hinge on factors like California’s future political leadership. But wheels are already turning on the first several gigawatts, as federal officials in the Interior Department have been assessing reviews of potential wind areas off the central and northern coast of the state in preparation for a future lease auction (Energywire, April 8). As much as 4.6 GW could be built in those areas.

Some energy analysts said California’s move could prompt new offshore wind policies in other states.

“The final report would not represent binding state law, and targets with 20+ year deadlines may not seem like a meaningful policy development today,” wrote analysts at ClearView Energy Partners LLC in a note yesterday. “However, we think the report’s eventual finalization — as well as other analyses currently under development by the CEC — may motivate new offshore wind policies — including targets and incentives — during the 2023 and/or 2024 state legislative sessions.”

California’s goals would also imply billion-dollar upgrades to the grid. For the Northern California area eyed by Interior for wind development, known as the Humboldt Wind Energy Area, transmission upgrades will cost anywhere from $2.1 billion to $4 billion, according to estimates from grid operators at the California Independent System Operator (CAISO).

Unlike on the East Coast, all of California’s offshore power would need to come from floating turbines, a more expensive variant of the technology. Floating turbines mostly exist at a pilot scale globally and have never been erected in the United States.

Implementing the state goals also would mean tangling with other ocean users ranging from fishermen and shipping interests to the Department of Defense and marine conservation authorities, acknowledged CEC staff in the report.

The Responsible Offshore Development Alliance (RODA), which represents fishermen, recently sued Interior for approving what would be the first utility-scale offshore wind in the country, off the coast of Massachusetts.

One RODA affiliate in California, the Pacific Coast Federation of Fishermen’s Associations (PCFFA), said yesterday that the national process for siting offshore projects has been “a failure” and does not bode well for fair treatment of the fishing industry.

Mike Conroy, executive director of the PCFFA, said in an email that he believed California’s explicit goals for offshore wind production, if finalized, “essentially forces Agencies to approve a certain number of projects regardless of their impacts on fisheries, marine ecosystems, the environment, coastal communities, disadvantaged communities, and ratepayers.”

“As a result, there is a huge importance, from a process standpoint, of setting these goals since they dictate the downstream review process,” Conroy wrote.

Conroy added for the goals to be achievable, they need to be implemented in ways that are “equitable, achievable, and responsible.” “Our experiences with the [Bureau of Ocean Energy Management] process, as it relates to [offshore wind] off the California coast, is that none of those have been considered,” Conroy said.   

Interior’s BOEM has long defended its process as giving meaningful consideration to fishing industry input. In the past, fishing groups have won alterations to turbine layouts on some projects, and BOEM recently helped draw up “mitigation” strategies for fishing impacts that could include financial compensation from offshore wind developers.

Will other states follow?

Still, the CEC’s draft goals hint at a broader future of state support for floating turbines in the U.S. — a technology that could be decisive for the Biden administration’s offshore wind goals, which include 30 GW by 2030 and 110 GW by 2050.

Floating systems are a must for the West Coast, where the Pacific’s waters are too deep to accommodate the fixed-bottom turbines planned for the East Coast. In Oregon, state officials are due to issue their own road map by September for building up to 3 GW of floating turbines. And in Washington state, a developer handed Interior officials an unsolicited plan to build a 2 GW floating project last month (Energywire, April 12).

Yet New York’s energy officials have recently said they are beginning to plan for floating wind, too. Doreen Harris, CEO of the New York State Energy Research and Development Authority, told the audience of an industry conference last month that the state could “easily double” its current 9 GW goal if it helps build floating turbines, according to Recharge.

The cost of energy from California’s floating turbines — another open question for the technology — may depend largely on whether the technology gets built and proven off the coasts of other countries, where commercial-scale projects are already planned.

One 2020 report from the National Renewable Energy Laboratory (NREL), which was cited in the California blueprint, put the levelized cost of floating wind in California at anywhere between $83 to $180 per megawatt-hour.

Most of that range is higher than the cost of the first U.S. offshore wind projects. Vineyard Wind, the first of the utility-scale bunch, is scheduled to generate power for $96 per MWh, while New York’s Mayflower Wind will do it for $71, according to an Energy Department market report last year.

The NREL report predicted that if a modest number of floating projects are deployed globally, however, costs in the U.S. could plunge to the $53-$64 MWh range by 2032, thanks to economies of scale, bigger turbines and technological innovations.

One other source of uncertainty for California’s offshore wind future is the availability of federal tax credits, the California road map said. Offshore wind projects that start construction before 2025 can capture at least some fraction of the current 30 percent investment tax credit, but after 2025, the credit would need to be extended by Congress.

In modeling for California, the tax credit could bring the cost of the first floating projects from the $60-$70 MWh range down to $40-$50 per MWh, California officials said.