Posted on December 4, 2023
Giant offshore windfarms are a cornerstone of President Joe Biden’s clean energy platform.
He pledged that 10 million homes would be powered by offshore wind by the end of this decade.
But progress has been slow. What’s causing the setbacks?
Today, On Point: Considering whether offshore wind can help power the U.S. economy.
Guests
Kris Ohleth, director of the Special Initiative on Offshore Wind, an independent think tank advising corporate and government stakeholders.
Miriam Wasser, senior reporter with WBUR’s climate and environment team.
Ali Zaidi, White House national climate advisor.
Also Featured
Amanda Lefton, vice president of development, U.S. East for RWE Offshore.
Transcript
Part I
MEGHNA CHAKRABARTI: On March 29th, 2021, the Biden administration looked toward the horizon of America’s clean energy future, shaded its eyes from the light of brilliant possibility, and saw, glittering on the ocean, the towering potential of offshore wind.
JEN PSAKI: Today, the White House convened leaders from across the administration and is taking coordinated steps to announce a set of bold actions that will catalyze offshore wind energy and create good paying union jobs.
The president recognizes that a thriving offshore wind industry will drive new jobs and economic opportunity up and down the Atlantic coast, in the Gulf of Mexico, and in Pacific waters.
CHAKRABARTI: Then White House Press Secretary Jen Psaki pointing to the White House fact sheet that said the Biden plan aimed for a target that would trigger more than $12 billion in capital investment and create 44,000 jobs by 2030.
The president himself pledged that by 2030, a significant portion of the power flowing into U. S. energy grids would be coming from offshore wind.
PRES. JOE BIDEN: 30 gigawatts is enough to power 10 million homes. It’ll help put us on a path to 100% clean energy.
CHAKRABARTI: But here we are, more than two and a half years later.
And if you look to the imagined offshore wind horizon now, there’s virtually no glitter and hum of towering turbines. In fact, there’s a whole lot of nothing. As one of our guests today notes, there are nearly 11,000 fully commissioned offshore wind turbines around the world, and here in the United States, there are a whopping 7.
This is On Point. I’m Meghna Chakrabarti. Alas, not that long ago, the future for offshore wind and its advocates seemed so bright.
NEWS BRIEF: A big step forward for the New Jersey wind port in Salem County. Governor Murphy is hosting a groundbreaking for the port. The wind port has the potential to bring up to 1,500 jobs and $500 million every year in economic activity to South Jersey.
GOV. PHIL MURPHY: The ocean wind team is set to begin operations at the wind port in early 2024.
CHAKRABARTI: That was New Jersey Governor Phil Murphy last year announcing what would be a critical first step in building some of the country’s largest offshore wind farms. The project known as Ocean Winds was set to be developed by the Danish firm Orsted and Governor Murphy had high hopes.
MURPHY: We’ll be creating over 200 preassembly, loadout, and stevedoring jobs, along with hundreds more indirect jobs. And overwhelmingly, we’re a quintessential and proud union state. Overwhelmingly, all these jobs I’m talking about are organized labor jobs. Yeah.
CHAKRABARTI: Or maybe not.
NEWS BRIEF: For months they’ve been both a source of controversy and anticipation at the Jersey Shore.
But now plans for two major offshore wind farms have suddenly been scrapped. Leaving people on both sides of that issue with lots of questions about what if anything happens now.
CHAKRABARTI: Just last month, Orsted announced it’s cancelling the projects entirely. Governor Murphy told the Philadelphia Inquirer that Orsted’s decision was, quote, “Outrageous and calls into question the company’s credibility and competence,” end quote.
While Orsted wasn’t the only developer to scrap a multi-billion dollar offshore wind project, in the last year, two developers in Massachusetts have done the same. And these decisions come as, once again, the international COP climate conference gets underway. It’s COP28 in Dubai this time. And the U.S. is still struggling with offshore wind. Though seen by policymakers as a critical part of America’s clean energy future, opposition to offshore wind continues unabated, as do structural and legal challenges that make building maritime wind turbines harder here. Can offshore wind ever satisfy all stakeholders and contribute meaningfully to how this nation produces its power?
Joining us today is Kris Ohleth. She’s executive director of the Special Initiative on Offshore Wind. It’s an independent think tank advising corporate and government stakeholders. Kris, welcome to On Point.
KRIS OHLETH: Thank you so much for having me, Meghna.
CHAKRABARTI: Okay, first of all, give us your impression about these fairly recent cancellations of what were supposed to be big offshore wind projects in the United States.
OHLETH: Indeed, they do represent a significant bump in the road for the offshore wind vision and goals for the United States. Since the onset of COVID, we’ve really seen some significant challenges, primarily around increasing interest rates, challenges with inflation, a war in Ukraine that has misdirected supply chain resources back to Europe, away from the United States and significant challenges in the government permitting processes.
So I think there’s really a combination of forces that have been making offshore wind particularly challenging in the U.S., but really challenges that we’re seeing globally for this technology.
CHAKRABARTI: Okay, so can we just dig in a little bit more to each one of those?
Because I don’t know, I always walked around with the presumption that major capital projects should have been, the finances would have been more clearly thought out well before, I don’t know, changes in global finance or inflation problems in the United States. Is that not the case?
OHLETH: It’s really a unique case with respect to offshore wind due to the long lead times between the time that an offshore wind developer commits to the price that they will build the project for, versus when the financing actually closes for the project. In fact, several years will eclipse between those two milestones.
And so the way I like to think about it is if you said to a construction, a builder, “I would love for you to build me a home.” And this was in 2019. And they gave you an estimate to build that home for you of 500,000, let’s say. But then three years later, you came back and said, “Okay, great, I’m ready for you to build that home for me.”
There’s absolutely no way that builder could be honoring, essentially, those prices, particularly based on this environment. So offshore wind is unique and has this very long lead time and that gets to some of the permitting and stakeholder challenges that exacerbate those two points in time.
And in those two points of time, particularly at this time, we’ve seen the challenge with interest rates and inflation that developers never really could have anticipated.
CHAKRABARTI: Yeah. Okay. So that makes a lot of sense then. What about, you said the war in Ukraine, what does that have to do, connect that with the cancellation of these wind projects?
OHLETH: Yeah. I’m so glad that you’re interested in digging into this, because I think it’s something that we don’t talk enough about in the sector, but there’s a really complicated and international supply chain that is required to build offshore wind in the United States right now. And that is because it’s a nascent industry, it’s literally the first time we’re doing something.
It’s a once in a generation opportunity to create a brand-new industry in our nation. And so since the supply chain, which has been building offshore wind in Europe for 35 years, since the early 1990s, is now, well had been essentially migrating over to the United States, once the pressure to increase the amount of renewable energy in Europe came online, it was really important that the supplier start focusing their energy on Europe again.
Because all these European nations are trying to get off of Russian oil. And in order to do that, they need to increase the amount of renewable energy capacity that they’re delivering. And so there’s a much more sense of urgency in Europe, while at the same time we’re seeing the challenges in the U.S.
It’s logical that the supply chain and offshore wind developers would start directing more attention back to their European projects, and that’s part of the challenge we’re seeing here.
CHAKRABARTI: That is utterly fascinating, that Vladimir Putin decides to invade Ukraine, and there’s this domino effect that leads to the derailing of some, or contributes to the derailing of offshore wind projects here in the United States.
Wow. But let me ask you then, most of the successful offshore wind projects that I know of over the past couple of decades are either in Europe or Asia. Why wasn’t there already the continuation of a effective supply chain, or funding or whatever have you in Europe to weather the blow of a Russian invasion and a need to grow the number of turbines again?
OHLETH: It’s interesting, in your early remarks on the show, you were referencing the Biden commitment in 2021 to the 30 gigawatts of offshore wind in the United States. However, the story starts two decades ago, really in the U.S. with the Cape Wind Project and the early projects right around the year 2000. Those projects were working in an equally challenging, if not even more challenging environment with literally no supply chain in the United States.
Literally no sense of what the regulation should be. There wasn’t even a permitting authority at that time.
CHAKRABARTI: I covered Cape Wind extensively. I know.
OHLETH: Oh, excellent.
CHAKRABARTI: I am very familiar with the bizarro land aspects of that project. But go ahead, Kris.
OHLETH: Yes. These projects have been, I think our goals are getting bigger.
The challenges are also getting bigger in the United States as we move through these challenges, and some of the challenges were starting to be addressed through bringing the supply chain away from Europe and just pulling it over so that they could grow the supply chain.
Some manufacturing, for example, has been transitioned over to the United States at this point. But it really, as the targets in Europe grow and the targets in the U.S. grow, there’s just not enough supply chain to go around right now, not to mention Asia, which is also a huge focus for offshore wind at this time.
Part II
CHAKRABARTI: I just want to quickly give voice to Amanda Lefton. She’s head of the East Coast for RWE Offshore. It’s a wind energy developer. She was previously director of the Bureau of Ocean Energy Management for the Biden administration. And she doesn’t see doom and gloom on the horizon. She says the current economic challenges are simply part of the growing pains of a new industry.
AMANDA LEFTON: This is not a unique problem for offshore wind. This is actually a challenge that really any large infrastructure project is facing right now, because of high inflation, because of these high interest rates. I think the difference for offshore wind is because we’re just getting this industry off the ground floor.
So we are really needing to build all of the supply chain and really the necessary infrastructure to support these projects. So as we do that, and we face these challenges, it is compounding.
CHAKRABARTI: That was Amanda Lefton, former director of the Bureau of Ocean Energy Management for the Biden administration.
Joining us now is Miriam Wasser. She’s senior reporter with our home station, WBUR’s climate and environment team. And she’s reported extensively on offshore wind projects in Massachusetts. Hello there, Miriam.
MIRIAM WASSER: Hey, Meghna. Thanks for having me.
CHAKRABARTI: So I want to actually focus for a couple of minutes on, as I said earlier, successful projects that have actually gotten off the ground here, and you’ve reported on one quite a bit.
Remind us what it’s called and how big and extensive is the vision for it?
WASSER: Sure. So Vineyard Wind is what you’re talking about. So Vineyard Wind will be the first commercial scale offshore wind project in the U.S., right? So you said earlier, we have seven turbines capable of generating 42 megawatts of power.
Vineyard Wind is 62 turbines, capable of generating 800 megawatts of power. So we’re talking like massive scale compared to what exists now. And this is the first commercial project. It was, got final approval in 2021 and has been under construction since. They have about five turbines installed in the ocean right now.
They’re actively building more, and we are expecting to get the first electrons from those projects, from those turbines, by the end of the year.
CHAKRABARTI: By the end of this year. Okay, now you were able to go out and see some of the early building there, right? Or the installation. I can’t remember how, were you actually able to go out offshore?
WASSER: No, I did not get on a boat to go, but I went to New Bedford, which is in Southeast Massachusetts, which is the big, specialized port area where they have done all the staging for this. So they imported all these turbine parts, started doing a little bit of preassembly on shore, and then they load them up on boats and send them out to the project site.
CHAKRABARTI: So tell us a little bit more about those staging sites, though, because I think even understanding how large those are gives us a sense as to really how big the projects are once they’re fully constructed offshore.
WASSER: Yeah. So this was a site that the state of Massachusetts developed a couple years ago, when they really decided to go all in on offshore wind.
It is specially designed for offshore wind and these parts are huge. And they’re super-duper heavy. And so you need like special concrete foundations, and you can’t just stage an offshore wind project anywhere. You have to build a specialized thing. And so you go out there, I went out there a couple years ago and it just looks like this big empty parking lot.
Right now, it is filled with these massive turbine parts. So tower components that are over 100 feet high. There are these stacks of blades that are literally the length of a football field. There are the nacelles, which is like a generator, the like brain component. They’re hundreds of feet high.
They weigh thousands and tons of this stuff is huge. And so you just go out there and, I don’t know, for me personally, I’ve been reporting on this for years and people have been telling me for years how big this stuff was. But just seeing it like in real life, it blows your mind. Like these things are going to be ginormous.
CHAKRABARTI: Just hearing you say, I want to repeat it, because it’s such a gripping description, that each blade of one of these offshore wind turbines is as long as a football field.
WASSER: Yes. 352 feet, each one.
CHAKRABARTI: Wow. Okay. So that means that the towers themselves are multiple times that high.
WASSER: Yeah, they rise hundreds of feet into the air.
CHAKRABARTI: Okay. So what’s really interesting about this is, as we heard earlier, the Biden administration and New Jersey Governor Phil Murphy, both really put the jobs as central to why they want to develop offshore wind, let alone the possibility of cleaner energy.
And we’ve got a clip here from some of your reporting of one of the workers on the Vineyard Wind project.
BILLY VIETZE: I’ve had a certain amount of pride with every project that I’ve ever worked on, whether it’s a school or a hospital, but this is something different. And to be part of the first commercial wind farm in the country it’s exciting.
And I’m looking forward to it.
CHAKRABARTI: So tell us who that is, Miriam, and also how many jobs are expected to be created, what it means to the communities on coastal Massachusetts.
WASSER: Yep. So that voice we just heard from, that is a guy named Billy Vietze, who lives in Roxbury, and he’s an iron worker. So I met him a couple of years ago at a training class that I went to at the Massachusetts Maritime Academy, where they were training all different union workers to work at heights.
So they spent a day practicing with harnesses and going up and down ladders and safety features. And the idea is you’re going to, all these people who have on land skills are suddenly going to have to do all this stuff offshore. So they’ve been practicing that.
And Billy was really interesting because he was really excited. Good to have a job, right? But excited about clean energy that was coming, too. He’s particularly worried about climate change. And in the past, he told me he’s worked on fossil fuel projects. He’s worked on a lot of natural gas projects. They didn’t feel great about it. So this was like something new.
And yes, you mentioned jobs. Jobs is a huge thing here in Massachusetts, as is the redevelopment of port cities, so places like New Bedford, Salem. These are these former big industrial fishing hubs that have been downtrodden in the last few years and there’s all this opportunity to revitalize them for offshore wind.
CHAKRABARTI: As you heard earlier, and Kris, I’ll come back to you in a second here, but I was half joking with Kris about having covered the failed project that was Cape Wind. And in that case, there were so many factors that went into undermining Cape Wind from being built. We obviously had stakeholders, some of whom were very powerful, who opposed it.
There was the finances, the virtually non-existent permitting process, et cetera, were similar challenges evident with the Wind project you are talking about, and how were they overcome?
WASSER: So Vineyard Wind did face a number of challenges, particularly under the Trump administration.
There were a number of delays. I think also just being the first project to wind its way through this massive permitting process, right? There are learning curves, since then, five other projects have been approved and things are moving faster. I think the federal government is figuring out how to do all of this in real time.
But yes, Vineyard Wind faced some issues, but it did not face a lot of the issues that Cape Wind faced.
CHAKRABARTI: Okay, so the industry and policy, had moved forward a little bit since, I don’t know, the decade-plus, more than a decade, since Cape Wind. Is that what you’re saying?
WASSER: Yes. It also is farther offshore.
So you’re not going to see it the same way that people were going to see Cape Wind. And I think that feels like a silly point, but it’s actually a pretty important factor to mention.
CHAKRABARTI: People will famously remember Senator Ted Kennedy being viciously opposed to Cape Wind in part because he could see it from his coastal Massachusetts house.
Well, Kris Ohleth, thanks for listening along with me, because we like to focus on successes, along with trying to understand what the challenges are. What lessons do you hear from what Miriam is saying about how the Vineyard Wind Project has gotten at least this far in the United States?
OHLETH: Yes, so many lessons learned. And I think really, we are experiencing the birth of an industry, which is, something that, at least for me, I’ve never done before. And I think, so these are some of the growing pains that are to be expected. And they do take some time to work out. I just also wanted to mention another great success story, which at a slightly smaller scale is the South Fork Offshore Wind Project, which is being built by Orsted.
And that’s happening out of the port of New London, Connecticut. And so if you’re on Route 95 or you’re on the Amtrak, you will have the opportunity to also see these wonderful, huge components. Stretching up into the sky and I do highly recommend to your listeners to go check it out, either at New Bedford or New London. Because it’s something like you’ve never seen and super exciting.
But in terms of, for example, some of the things the states are learning, how can they work together to help with some of these supply chain challenges, we see leadership in the state of Massachusetts, along with the states of Rhode Island and Connecticut in a really solutions oriented approach to developing a shared procurement mechanism.
So the way it works is that the states are buying the power from these offshore wind developers. I’m oversimplifying. But in each case, the developers enter into a contract with each state to buy the power. And so we see one example of a really solutions oriented approach from this multi-state MOU where Rhode Island and Massachusetts are going to be issuing a joint procurement, and what this does, I think, is provides a regional approach to supply chain development and management.
Because what we’ve seen is each state really wanting their piece of the offshore wind supply chain pie, and all of the supply chain manufacturers and others will tell you that there needs to be a more regional and organic approach to developing a supply chain.
If each state needs to have a turbine manufacturing plant, and each state needs to have its own large port, that’s typically not how a supply chain organically develops, and it’s increasing the cost for the industry. So we see the states really being creative with this multi-state approach.
CHAKRABARTI: Miriam, go ahead.
WASSER: Yeah, I just wanted to add, too, that I think one thing states have learned along the way is that we need to build more flexibility into these contracts that we’re signing. There are these 20 year set price contracts for electricity. And as we saw inflation rise, things got wonky.
And so in this next iteration of contracts that are request for proposals that are going out, solicitations, we’ve actually seen a number of states change how they’re doing their contracts, and they’re allowing project developers to index things to inflation. Oh, so basically like you won’t run into this problem the same way. And it could end up making projects more expensive if inflation gets worse.
But the other way around, if things get a lot better, it can make the projects cheaper for consumers, too.
CHAKRABARTI: You know what? This is really fascinating. And as I said, I like to learn from successes as much as we like to learn from mistakes. But I do want to press a giant old pause button right now, because look, there are very specific reasons, even though we’re talking about what policymakers have learned, why it’s so hard to build offshore wind in this country.
And a major one is that there is resistance from really important groups of Americans. You’ve reported on this extensively, Miriam, fishing industry has deep concerns about where and how the turbines are put up, and the fishing industry is equally important in the states that we’ve been talking about.
Environmental groups, some of them really severely oppose offshore wind. We were, I was looking at some reports about how there was concern about what building offshore wind would do for a very endangered species of whales. And there’s a concern about birds and marine noise, etc.
These groups are, they have significant concerns that they have been bringing to the table, putting into court, Kris, etc. I don’t see how those stakeholders and their concerns, have there been any adequate moves by offshore wind developers to take into consideration those concerns?
OHLETH: I think absolutely. The developers and along with the state and federal permitting agencies work very closely with those stakeholders. And it really starts with the siting process. And that’s responsible at the federal level through the Bureau of Ocean Energy Management. So at the first take, when these offshore areas are designated for offshore wind development, the Bureau is looking at what they’re calling the least conflicted or most de-risked areas.
So they’re already citing based on where there’s the least amount of fishing conflict, where you see the least amount of whale migration and all those things. So at the first pass, we are already looking to de-conflict these offshore wind areas. And then as you work through the process, there’s very robust permitting required by various federal agencies and state agencies that are going to require that all the environmental thresholds are met through the permitting process.
And so when you see a project like Vineyard Wind moving into construction, it’s been through a very robust permitting cycle. There, of course, have been lawsuits and challenges, but each time so far, they’ve been defeated. Because I think the federal regulators are doing a great job and they’re doing their homework and the developers are doing the right thing in making sure they’re building projects that are consistent with those environmental standards.
CHAKRABARTI: Let me ask you, Miriam, you spoke with members of the fishing industry, right? Here in Massachusetts. Can you just articulate what their concerns were or are, and if they were satisfied with the kinds of moves that regulators were making to take those concerns into account.
WASSER: And I just want to add, too, I think it’s really important to differentiate between the concerns about whales and the concerns about the fishing industry, because I think that there’s science that will tell us different things about each of those. But when it comes to fishing, fishermen are concerned about a number of things.
They’re concerned about turbines being in areas where they fish, and affecting the ecosystem there. They’re concerned about navigational issues. And Kris mentioned things that developers are doing. One thing that Vineyard did, and I think most other developers will do in the future, too, is they said, “All right, we’re going to put our project on a mile-by-mile grid, which will give you enough space to go in between the turbines.”
I think that satisfied some fishermen, not others. I did a big story about fishing and offshore wind a couple of years ago, and I think the big takeaway for me was that the large-scale, big-time fishermen are going to be fine. They can move elsewhere. These projects are not in the area where they fish, but it’s small guys that are going to be affected. And we’ve seen a number of developers hire fishermen to help them with some of the science that they’re doing now. And I’ve talked to some people who were very opposed to this project early on and are now kind of on board. I think there is a myth and it really remains to be seen how this affects the fishing industry.
CHAKRABARTI: Okay. Kris, we’ve just got a minute before we have to take our next break. Let’s zoom out globally a little bit here. Can you just describe to me how we mentioned the seven fully commissioned wind turbines offshore in the United States in comparison to how many in the rest of the world.
OHLETH: Yeah, there are really well over 10,000 turbines that are now spinning in Europe and Asia.
Part III
CHAKRABARTI: Kris, there’s so many interesting little nooks and crannies about the offshore wind industry that I think I accidentally spent much more time on some of those nooks and crannies than on the big question here, which is if you could point to, let’s say, two or three of the major differences between Europe, Asia, and the United States that can explain why almost all of those more than 10,000 turbines are not offshore of the United States. What would those differences be?
OHLETH: The primary difference that I would cite, and it’s an unfortunate one, and a bit of a heartbreaking one, is the fact that in Europe there was such an early adoption of the threat of climate change. There were many countries in Europe who were recognizing the potential threats, the changing climate, and also the challenges that other types of energies posed to the environment beyond just climate change.
And I would offer that in the United States, we haven’t really taken those threats seriously up until, quite recently, and sometimes we still don’t. And I think it was that imperative that enabled the European nations to be the first mover, the first wind farm installed in 1991 off the coast of Denmark.
They were moving early, they were moving with conviction, and we were moving around the edges thinking, “Okay this can be another way to produce power.” But not really associating the deep sense of purpose that offshore wind can bring.
CHAKRABARTI: So an early adoption of the truth of climate change, which then led to the development of the offshore wind industry.
OHLETH: Exactly. Really, I think creating that sense of urgency and prioritization that we didn’t have here at that time.
CHAKRABARTI: What about permitting?
OHLETH: Absolutely. It was really, a more centralized and still continues to be a more centralized opportunity. In the U.S., there are so many different agencies, they’re led by the Bureau of Ocean Energy Management in the Department of Interior.
And they are the lead federal agency on this. But for each offshore wind farm, there can be up to 27 different federal and state agencies that are required to consult and provide permits to an offshore wind project.
CHAKRABARTI: And how does that compare to a place like Denmark? Let’s stick with them for a second.
OHLETH: Yeah, in those places, they have a more centralized approach to processing permits and also giving value to the benefits of certain types of projects like offshore wind. In the United States, I would argue we’re perhaps not recognizing all of the climate and clean energy and health, in fact, benefits that offshore wind will provide.
I don’t claim to be an expert on Danish permitting, but recognizing that at the end of the day, this is the results we’re seeing.
CHAKRABARTI: Okay. And then a third one, which I want to quickly ask you about since it’s come up earlier in the conversation, is financing around projects. Is it different there?
Are they more insulated from the kinds of sudden changes in global financial markets that we described the U.S. as not being fully insulated from?
OHLETH: Somewhat. The U.S. is not alone in its challenges. Amanda Lefton referenced earlier, that this sector of offshore wind is facing a lot of the same type of challenges around financing with interest rates, with inflation.
And In fact, around the world, projects are seeing the same thing. We saw just a few months back that when the UK offered an opportunity for developers to bid into Offshore Wind, they received no bids. And that was the first time that had ever happened in that nation, because Offshore Wind developers were saying, “Hey, this is not enough for us to be able to develop these projects financially and do it in an economically sound way.”
We are not alone, unfortunately, in the economic challenges of offshore wind of this time. And some of the solutions-oriented approaches that Miriam mentioned earlier are being applied globally to try to bring this industry forward.
CHAKRABARTI: Got it. Okay. So Kris and Miriam, hang on here for a second.
I just want to tease you a little with, I’m going to dangle the Jones Act in front of everyone a little bit later, but I do want to welcome Ali Zaidi into the conversation. Ali is the White House National Climate Advisor. Welcome to On Point.
ALI ZAIDI: Hi there. Good to be on.
CHAKRABARTI: So let’s just get a reality check here.
First of all, Mr. Zaidi, if we can, is the Biden administration’s goal of installing 30 gigawatts of offshore capacity by 2030? So you’ve got seven really, yeah, seven years left, possibly a little bit less, is that still realizable?
ZAIDI: Absolutely. From day one, the president has not only set an ambitious goal, he’s brought the full throw weight of the federal government to pursue that goal, brought every agency to the table, worked with partners at the state and local level, catalyzed private investment in the tens of billions of dollars.
We now have a supply chain that reaches coast to coast all 50 states with a piece of the upside in offshore wind. And we’ve got a project pipeline that allows us to see not just 30 gigawatts, but beyond. So we are focused on this. We are delivering against this, six massive projects green lit for construction, many more to come.
CHAKRABARTI: Help me understand something. Because what I was hearing earlier in this very program is that an inadequate or lack of robustness in the supply chain is actually one of the issues that’s hampering the fulfillment of offshore wind projects. But you’re saying there’s a adequate supply chain and you mentioned all 50 states. I’m not clear what you mean.
ZAIDI: For a number of years the United States had walked slowly. I think one of your guests was talking about how in this jurisdiction versus others folks have been more comfortable denying the climate crisis. And the reality is when you deny the climate crisis, you also deny the economic opportunity for the jobs, the workers, and the manufacturing capacity that comes with tackling the climate crisis.
Before President Biden took office, there was basically no offshore wind industry, and there was an administration here in Washington focused on keeping it that way. Since the President’s taken office, we’ve got, we’ve seen steel go in the water, turbines get hoisted up, billions of dollars of bids to create offshore wind, not just off the East Coast, but off the Gulf of Mexico, the Gulf of Maine.
The California coast and the coast of Oregon, and to your question about supply chain itself, yeah, it’s ramping up. It takes 18, 24, 36 months to build these factories. So when I say we will meet our goal for 2030, we will meet our goal for 2030. And we’re ramping up the supply chain aggressively to do that, but let’s be clear. The actions of the previous administration to stifle this nascent industry kept dollars from flowing into communities, kept factories shuttered, kept ports idled, and that’s the result that we’re seeing today.
Vulnerable supply chains, a lack of ability to robustly supply, but that’s a lagging indicator. The forward looking indicator is this. Since the president took office, Signed the Inflation Reduction Act, we’ve seen over a hundred factories be announced.
Those are now under construction and they will produce the products we need to meet our goals.
CHAKRABARTI: Okay. Acknowledged and understood about the previous administration. But to your point, I am more interested in those forward indicators and, in fact, more deeply concerned about evidence of plans for forward action because, for example, Kris Ohleth, who you just mentioned, she just said before you came on that one of the challenges in more quickly realizing for getting wind turbines built in U.S. waters is that there’s something like 27 federal and state agencies that are involved in the permitting process here. Can the Biden administration do anything to streamline that process such that it accelerates the time between the contracting of an offshore wind project and turbines actually going in the water.
ZAIDI: So great that you raised that issue. And your guest raised Denmark as an example, and I think Denmark has been a jurisdiction that’s led on this, but even today, as we speak, Denmark has over a dozen agencies that weigh in on any single decision around the permitting of offshore wind. You have to get three different certificates to be able to construct a project in Denmark.
The thing about Denmark that makes this work well is that they have a one stop shop. The DEA in Denmark is the place where they centralize all of these reviews. It’s the one place a company shows up, even though it’s dealing with a lot of statutes, a lot of requirements, a lot of analysis that needs to be done.
CHAKRABARTI: Yeah.
ZAIDI: And so at the beginning of this administration, we took that model in. We now have a one stop shop. We have streamlined our permitting approach. We’ve hired more folks to build that hub and that capability. Now, once you submit to one agency, all the agencies leverage that same analysis, and that’s what’s allowed us to move quickly.
Our environmental laws are our strength. And our ability to deliver them effectively will unleash economic activity. That’s what we’re seeing, thanks to the president’s leadership.
CHAKRABARTI: Okay. So that’s interesting to note. And I appreciate that. Kris, let me just turn back to you very quickly here. I can hear the optimism and the determination in Ali Zaidi’s voice here.
Do you share that same optimism that the Biden administration can reach that 30 gigawatts goal by 2030?
OHLETH: Realistically, I think it’ll be a challenge. It’s certainly, we’re up for a challenge as a nation. We’ve shown it in the past and I look forward to realizing that. I certainly hope we can, but there are significant hurdles in doing that.
And several independent analysis have shown recently that just getting through the supply chain pipeline, getting the ships needed and the ports needed together in order to just practically build out these projects in time, it will be a challenge. But hey, I also don’t think that if 30 gigawatts aren’t built by 2030, I don’t really know that’s some magic number that we need to meet. If it’s 2031, 2032, we’re doing our best to advance the projects.
And I don’t really know that focusing on one specific year is particularly all that critical, frankly.
ZAIDI: And I totally, I agree with that sentiment of there are challenges in front of us. The president often reminds us it’s never a good bet to bet against the United States of America. And I think that’s what we’re seeing everywhere we go.
I went with the president to Philadelphia Shipyard where they’re building one of the several dozen purpose-built vessels to service this industry. He’s traveled to Massachusetts where once there was the largest coal plant in the northeast, now is a plug in point for offshore wind. We’ve talked to the folks in South Carolina who are actually making that cabling cord for Vineyard Wind, an industry that wasn’t here in the United States.
We’re seeing this challenge be identified. We’re clear eyed about it and we’re confident that if we all work together, we can get it done.
CHAKRABARTI: Point taken that maybe landing at 30 gigawatts by 2030, the specific year, doesn’t really matter. But on behalf of the American people, when administrations make promises, there is the expectation that at least the promise can be close to being kept.
And we’re still talking about in the next six years or so, a multi factor increase in the amount of offshore wind produced in the United States. And I’m still seeing obstacles that are large enough to make even getting near that goal seem virtually impossible. And it seems especially pressing given that we started the show with a cancellation of two major projects in New Jersey.
So, you know, I just think what else can or should the Biden administration be doing to be sure that even if the president isn’t in office after the 2024 election, that offshore wind can continue its development in the United States, Ali.
ZAIDI: So I just want to go a little bit to the beginning part of the premise of what you laid out, because I’m happy to respond to most of it.
But I don’t think we’re setting a goal that is pie in the sky. I think it’s going to be steel in the water. And I think we’ve got the receipts to show that. You talked about the projects that have been suspended where, by the way, those companies are looking at rebids and approaches to get those projects going again.
But what you didn’t note is that just in the last month, Dominion Energy, which is building the single largest offshore wind project, said that they’re not only on the track from a timing perspective, they’re actually on the low end of their cost estimate with 92% of their costs hedged. What you didn’t know is in South Fork, they’re lifting up the turbines into the sky and they plan to have electricity flowing onto the grid in just a matter of weeks.
I think what we’ve got to do is take a portfolio look across the board and think about, Is the portfolio sufficient to get us to the scale and ambition that we need? And the answer is yes, this is not a qualitative sense. We know that there are 47 gigawatts that are in the pipeline.
We know that over 20 gigawatts … already have a path to being green lit for construction.
This program aired on November 30, 2023.
