U.S. wind concerns ease as Trump cabinet calls on Denmark to help boost offshore output

Source: By Stine Jacobsen, Reuters • Posted: Friday, October 27, 2017

COPENHAGEN (Reuters) – The United States signed a deal with Denmark on Thursday to expand cooperation on offshore wind power, giving a boost Europe’s biggest green energy players.

Danish companies DONG Energy and Vestas had feared the nascent U.S. offshore wind sector would be stymied after President Trump vowed to revive the coal industry, challenged climate-change science and blasted renewable energy as expensive and dependent on government subsidies.

But both companies now say the Trump administration is increasingly looking at Europe’s experience as it seeks to kick-start the sector.

“We see some positive initiatives coming out of the administration in Washington,” the head of DONG’s U.S. business, Thomas Brostroem, told Reuters. He pointed to measures being taken on a federal level to streamline and speed up the process to obtain permits to build offshore wind farms.

“They’ve been really receptive to talk to European countries and developers to get know-how from the past decades,” he said.

The U.S. offshore wind sector, which has lagged behind Europe, is at a critical juncture, with the first large-scale offshore wind auction in Massachusetts coming up in December.

But to gain traction, industry executives and experts say the United States will need to replicate the dramatic cost cuts which Europe has implemented.


“Something that is important for the new administration is jobs, jobs, jobs and that is something that will come from the supply chain around the turbines,” Adam Thomsen, head of U.S. growth implementation at MHI Vestas, told Reuters, but declined to quantify any numbers.

MHI Vestas is a joint venture between Vestas and Mitsubishi Heavy Industries, which makes offshore wind turbines and whose rivals include Siemens Gamesa and General Electrics.

Vestas already produces onshore turbines at four factories in the United States, but large offshore turbine parts like the nacelles, towers and rotors would be made at existing facilities in Europe, said Thomsen.

“We need a much more stable market development before we can talk factories.”

Record low subsidy prices in Europe, home to more than 12 gigawatts (GW) of offshore wind, has increased confidence in the sector but also prompted European developers to search for new revenue streams in the United States and China.

“It is a huge scoop that we now get a formal cooperation with the Trump administration on offshore wind,” Danish climate and energy minister Lars Chr Lilleholt told Reuters.

Thomsen said that around 2 GW of installed capacity would be realistic by 2020 compared to the 30 megawatts (MW) currently installed, and that by 2030, the annual capacity expansion could be between 500 MW and 1 GW.

“There’s no doubt that this is a sleeping giant,” he added.

Reporting by Stine Jacobsen; editing by Jacob Gronholt-Pedersen and David Evans