Consistent with the Biden-Harris administration’s “whole of government” approach to climate change as announced in its Day 1 and Day 7 executive orders, on March 29 the administration announced a variety of concrete initiatives that executive agencies will be taking to accelerate the development, permitting, and construction of US offshore wind projects and boost the already-growing industry as a whole. In addition to highlighting the importance of offshore wind in lowering carbon emissions and addressing climate change, the announcement emphasized the substantial collateral benefits that the administration expects offshore wind growth will bring, including jobs, investment, and related infrastructure improvements.
The most significant element in the administration’s announcement is a new goal shared by the US Departments of Interior, Commerce, and Energy to deploy 30 gigawatts of offshore wind energy generation capacity by 2030, far exceeding the administration’s previous goal of “doubling” offshore wind generation by 2030. The administration emphasized that this goal is a stepping stone to its broader goals of net-zero US electricity production by 2035 and overall net-zero US carbon emissions by 2050, as previously announced.
The Biden-Harris administration summarized the initiatives, described more fully below, as falling within three categories: (1) advancing wind energy projects to create jobs, (2) investing in American infrastructure to strengthen the domestic supply chain and deploy offshore wind energy, and (3) supporting critical research and development and data sharing.
The announcement cited numerous benefits the administration believes will flow from a boom in offshore wind: “spawn[ing] new supply chains that stretch into America’s heartland,” triggering “more than $12 billion per year in capital investment in projects on both U.S. coasts, creat[ing] tens of thousands of good-paying, union jobs, with more than 44,000 workers employed in offshore wind by 2030 and nearly 33,000 additional jobs in communities supported by offshore wind activity,” supply chain growth such as increased demand for steel “equivalent to 4 years of output for a typical U.S. steel mill,” and port upgrades and construction of specialized equipment transportation and installation vessels representing potentially more than one billion dollars in investment.
The announcement also included the following initiatives designed to achieve the “30 for 30” goal for offshore wind deployment.
The Bureau of Ocean Energy Management (BOEM) will be making available a new area in the “New York Bight”—the area between the Long Island and New Jersey coasts—for a lease auction expected to occur in late 2021 or early 2022.
Consistent with BOEM’s February announcement to expedite the permitting process for Vineyard Wind, which is slated to become the first commercial-scale offshore wind project in the United States, BOEM also announced a notice of intent to prepare the Environmental Impact Statement (EIS) for Ocean Wind, a proposed 1100 MW project offshore from New Jersey. The EIS is the critical, longest-lead-time gating item in the full permit approval process a project must pass before it can be constructed. Once constructed, Ocean Wind is expected to be the nation’s third commercial-scale offshore wind project (with the South Fork Wind project off the Rhode Island coast being assumed as the second), and it could power approximately 500,000 homes across New Jersey.
Construction and ongoing maintenance of offshore wind projects requires specialized vessels, transportation of massive equipment and components, storage of such equipment, and, therefore, ports within a useful distance of projects with specialized configurations and capabilities. Two separate new sources of funding will now be available for the development and construction of such ports or the retrofitting of existing ports to have such capabilities.
First, following congressional appropriation in 2020 of $230 million for “port and intermodal infrastructure related projects,” the US Department of Transportation released the a notice of funding opportunity to formally kick off the application process for states and municipalities to apply for such funds through the Port Infrastructure Development Program. A separate press release from the Department of Transportation noted that not only would the Department consider how proposed projects contribute to economic vitality, but also “how proposed projects address climate change and environmental justice impacts and advance racial equity, reduce barriers to opportunity, and meet challenges faced by rural areas.”
Second, the Department of Energy’s Loan Programs Office (LPO) released a fact sheet relating to up to $3 billion in loan guarantees through the LPO’s Title XVII Innovative Energy Loan Guarantee Program. The White House announcement described the release of the LPO’s fact sheet as signaling that the LPO “is open for business and ready to partner with offshore wind and offshore transmission developers, suppliers and other financing partners to scale the U.S. Offshore industry and support well-paying jobs.” Eligibility requirements for the program include the requirements that the applicable project (1) be composed of innovative technology, (2) provide greenhouse gas benefits, (3) be located in the United States, and (4) present a reasonable prospect of repayment. The LPO’s fact sheet highlights projects such as foundation manufacturing facilities, dockside staging and laydown yards, blade manufacturing facilities, and vessel construction as the types of infrastructure required for boosting the offshore wind industry, signaling that such projects would likely satisfy the “innovative technology” requirement and be strong candidates for the LPO’s guarantees.
The announcement included three new initiatives targeting the support of research and development and data sharing.
First, the National Offshore Wind Research and Development Consortium (a partnership between the Department of Energy and the New York State Energy Research and Development Authority) awarded $8 million to 15 different offshore wind research and development projects, which will each focus on “support structure innovation, supply chain development, electrical systems innovation, and mitigation of use conflicts” to “help reduce barriers and costs for offshore wind deployment.”
Second, the Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA) will be signing a memorandum of agreement with Ørsted to share data relating to waters leased by the Danish developer (Ørsted currently is party to five leases with the US government for development-stage offshore projects in federal waters, and is the owner and operator of the only two existing US offshore wind projects, the small-scale/test Block Island Wind (which it owns) and the Coastal Virginial Offshore Wind Project (which it operates)). The announcement describes the agreement as a “first of its kind between an offshore wind developer and NOAA [that] paves the way for future data-sharing agreements that NOAA expects to enter into with other developers.”
Third, NOAA, in partnership with the Departments of Energy and Commerce, will be releasing a request for research proposals and will provide at least $1 million in grant funding to research the benefits offshore wind will provide for stakeholders such as fishing and coastal communities and “opportunities to optimize ocean co-use.”
The announcement came just two days before the administration released the American Jobs Plan outlining what it plans to include in an upcoming proposed infrastructure bill. While the American Jobs Plan does not include any new proposals specific to offshore wind, it does include support for the cornerstones of the industry such as transmission, offtake, and port infrastructure. For example, it calls for investment in the electric grid and the creation of a Grid Deployment Authority under the Department of Energy to boost, improve, and modernize the transmission system (needed to effectively bring power from offshore projects onshore/where demand is located); a proposed direct pay investment tax credit and production tax credit for energy generation and storage (thereby increasing demand for and utility of variable generation sources such as wind); and investments to improve US ports and waterways (needed to efficiently transport and store turbine components and construct and service offshore projects).
While the fate of the infrastructure bill and the inclusion of possible additional provisions to benefit offshore wind remain unknown at this time, the announcement provides an early example of what the Biden-Harris administration envisions in its “whole of government” approach to climate initiatives.
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