An Offshore Wind Boom is Knocking at Our Door

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Clean Energy Weekly

Posted June 11, 2019

Offshore wind power in the U.S. is about to go into a dizzying growth mode. Here’s some of what has happened in the last week that is raising our already sky-high expectations of what may be coming.

Get ready for some big announcements of U.S. offshore wind projects, along with plans from wind energy developers on how they will get the parts and services to build them.

Massachusetts officials said last week that they will move forward with a plan to contract for 1,600 megawatts of offshore wind, doubling the amount already in progress.

The state’s Department of Energy Resources said its decision was based on a report showing that doubling the state’s offshore wind program would save consumers between $670 million and $1.27 billion over 20 years compared to purchasing the same amount of land-based renewable energy on the market.

Connecticut’s legislature passed a measure this week that requires 2,000 megawatts of offshore wind. The bill, which awaits the governor’s signature, builds on existing plans to receive power from several offshore wind projects already in development.

Also, New York State is close to announcing specifics of how it will follow through on its plan to develop 9,000 megawatts of offshore wind power.

Keep in mind that right now there is only one operational offshore wind project in the country, and it is just 30 megawatts. We are about to see an industry spring up almost out of nowhere.

What is the broader significance of the recent actions in Massachusetts and Connecticut?

I asked David Littell, the Maine-based senior advisor for the Regulatory Assistance Project, to walk me through what’s happening.

“What you’re seeing is a reaction, political and administrative, to the costs and benefits of wind offshore, and [officials are] saying, ‘Hey, the costs and the benefits are really advantageous so we should consider doing this and doing it quickly,’” he said.

Many states want to be hubs for the businesses that will provide manufacturing, logistics and other support to the offshore wind industry, he said. Since most of the early development is in the Northeast, led by the 800-megawatt Vineyard Wind project off Massachusetts, several states there are vying for a share of the economic benefits.

“The early mover states want the jobs and economic benefits of having the skilled labor, the commercial expertise, the businesses locating, and the intellectual capital, in their states or nearby,” he said.

One of the big questions is which parts will be imported and which will be built in the United States, an issue explored in this Greentech Media story. There is an existing supply chain in Europe for offshore wind turbine blades and towers, and some of those parts may be shipped across the Atlantic.

By the end of the year, we will have at least the beginnings of answers to questions of who the winners are in the race to attract those jobs, and I’m eager to see how it unfolds.

Energy Storage Nearing ‘Prime Time’ Status

Early last year, the Federal Energy Regulatory Commission issued an order saying regional grid operators need to set up ways for energy storage to be part of the country’s wholesale electricity markets.

What regulators were really saying: Storage is an electricity resource in its own right, and markets need to adapt to treat it that way.

Energy storage is any resource that can hold energy for use at a later time. Pumped hydroelectric storage is one of the most common types; these systems store water and release it when needed, sending it through turbines to make electricity. Various battery technologies are another.

Storage is an essential part of a cleaner electricity system because it can fill in the gaps when renewables such as wind and solar can’t provide enough power to meet the need.

While there’s still a long way to go, the effects of the FERC order are starting to show up. For example, the grid operator for New England has changed its rules so electricity from storage systems can be sold on the wholesale market.

The changes in New England are a big deal. They make it easier for owners of utility-scale battery systems to sell their stored electricity to the market, as opposed to needing to sell it to a specific customer. As system owners have more ways to make money, it will be easier for them to get financing for projects, and growth will accelerate.

Other grid regions are in various stages of taking similar actions.

To better understand what’s happening, I spoke with Rao Konidena, who runs an energy market consultancy in Minnesota and wrote about the FERC order last month in the journal MRS Energy & Sustainability.

"Everyone knows storage is a player in the mix, but storage is not, quote-unquote, prime time,” he told me. “By FERC insisting that storage be in the wholesale market in this electric resource category at 100 kilowatts and above, electric storage is finally getting its shot at solving a specific need today that has previously been solved by traditional resources.”

This is happening at a time when forecasts show storage is on a pace for torrid growth. BloombergNEF projected in January that the U.S. will have 111,084 megawatts of energy storage by 2040, up from 1,061 megawatts in 2017.

To underscore this rapid pace of growth, Wood Mackenzie Power & Renewables reported this week that the U.S. added 148.8 megawatts of storage in the first quarter, which was a record high, up more than 200 percent from the same quarter a year ago.

(I should note that megawatts do not show the full picture of the growth of energy storage. The systems also are measured in megawatt-hours, which tells us how long the systems can run at full capacity before recharging. This number is also rapidly growing.)

As the run times get longer, this provides more flexibility for grid operators as they adjust to using more wind and solar and less fossil fuel energy.

And, to build as much storage as is needed, there needs to be a strong business case for investing in it. The FERC order is a key part of this case, Konidena said.

“You see economies of scale kicking in with big players with a lot of big finances behind them,” he said.

Source: coastalnewstoday.com