Offshore wind backers send message to Biden

Source: By Peter Behr, E&E News reporter • Posted: Monday, January 25, 2021

Developers of U.S. offshore wind farms off the Atlantic coast are welcoming the arrival of the Biden administration, hoping to see quick approvals for leases and regulatory changes aimed at speeding up investment.

“It’s very exciting to have the Biden administration coming in,” said Charlie Papavizas, who heads the maritime practice at the Winston & Strawn LLP law firm.

Wind power advocates are looking for faster action by the Interior Department’s Bureau of Ocean Energy Management, which has opened federal offshore sites for leasing but delayed the environmental review of the largest of the current projects, the Vineyard Wind development off the coast of Martha’s Vineyard.

The Biden administration should also clear up some tax and legal issues that have slowed project development, Papavizas said.

Papavizas noted he has clients who have been waiting years for answers from the Trump administration on whether offshore wind projects must comply with the Jones Act, which requires U.S.-built vessels to deliver turbines and other components.

“That logjam is now gone,” Papavizas said, speaking at a conference of the Business Network for Offshore Wind.

The 2021 National Defense Authorization Act, which passed over President Trump’s veto, states the act does cover offshore projects.

There are no U.S. vessels capable of installing the jumbo-size wind turbines ordered for the Atlantic projects, said Matthew Rosenberg, senior analyst with the Government Accountability Office, reporting on a GAO study last month on offshore wind development.

Future ‘co-opetition’

If the Trump administration blew hot and cold on offshore wind projects, competition continues to heat up among the Atlantic seaboard states to host manufacturing, assembly and installation services.

The footrace was in plain view during Tuesday’s webinar as representatives of four states plugged the port facilities they are building.

Max Taffet, vice president of New York City’s Economic Development Corp., boasted of the new projects announced last week by New York Gov. Andrew Cuomo (D) that would add 2,500 megawatts of offshore wind generation for the state (Energywire, Jan. 14).

Atop New York’s list of potential staging area sites is the 73-acre South Brooklyn Marine Terminal, which the city has been restoring with a $115 million commitment. “It needs a little bit of love,” Taffet said, adding, “we are looking to put many tens of millions of dollars more into the site to make it a real world-class, ready-to-go facility for offshore wind staging and assembly.”

Chris Gullickson, economic development director for the Port of Virginia, bragged about Dominion Energy Inc.’s construction of what will be the first Jones Act-compliant offshore wind turbine installation vessel, now underway in Brownsville, Texas (Energywire, Dec. 17, 2020).

Another speaker, Karl Humberson, Dominion’s director of project construction for the vessel, said its future base in Virginia’s Hampton Roads, on a deep-water channel to the Atlantic, will enable it to put up turbines “all along the East Coast” in neighboring state’s projects.

State-by-state competition is expected from governors seeking support for offshore projects with promises of new employment and tax revenues. But that approach is likely to sacrifice economic benefits that states could gain by collaborating on regional strategies that help build a bigger overall offshore wind industry, said Bo Mørup, chief commercial officer at Bladt Industries AS, in an interview with E&E News. The Denmark-based construction firm has been part of building more than 2,200 offshore wind turbine foundations in Europe.

Bladt has partnered with Burns & McDonnell, a Kansas City, Mo., engineering services and construction firm, seeking to build a supply chain of steel fabrication and assembly operations for offshore projects on the Eastern Seaboard.

Regional approaches

As offshore wind farm development accelerated in Europe, countries commonly sought domestic economic advantages, Mørup said. That has led to some offshore wind regions being overbuilt, saturating power delivery. “It’s always a balance. When you do that, you might sacrifice overall profitability. We’re always a little behind where he hoped we would be on optimization” of wind energy production and distribution, he said.

“I agree a regional approach would bring more benefit to individual states,” said Jason Cabral, Burns & McDonnell vice president for transportation and distribution services.

“Each of these states want the turbine manufacturing in their state. How do you have 1 gigawatt of production in each state” and maximize the investments, Cabral asked.

Competition is the default response among states, said Lasse Petterson, CEO of Great Lakes Dredge & Dock Corp., speaking at Tuesday’s conference. But coalitions can be built. “We’re seen discussions of joint ventures among some states,” he said.

“In the mid-Atlantic, we compete very, very hard for business,” said Richard Powers, director of marketing for the Maryland Port Administration. “We compete like crazy,” he added, putting in a plug for the giant former Sparrows Point steel plant in Baltimore as a staging site for offshore wind.

But he praised a memorandum of understanding signed by governors of Maryland, Virginia and North Carolina in October to promote their region as a hub for offshore wind farm development, supply chain investment and job creation.

“This is new to me,” he said, “this ‘co-opetition.’ But I think it’s brilliant.” Without it, “You could end up with all three states duplicating the same thing.”