Jones Act Compliance Strategies for US Offshore Wind Construction


December 14, 2021

As renewable energy continues to comprise a larger share of the US power mix, offshore wind remains the next frontier of the US green energy boom. Today, the US hosts only one operational commercial offshore wind farm, the five-turbine, 30-MW Block Island Wind Farm. However, a robust pipeline of projects is under development with leases secured, development well underway, and construction targeted for 2022–2024. By some observers’ analysis, the Bureau of Ocean Energy Management (BOEM, a branch of the US Department of the Interior) is currently reviewing the construction and operation plans of nine more projects, is expected to complete another six by 2025, and has announced plans to hold lease auctions for up to seven new sites by 2025. The Biden-Harris administration has established a goal of 30 GW of US-based offshore wind power by 2030, and issued an executive order targeting a goal of permitting at least 25 GW by 2025.

Despite such tailwinds, obstacles abound. Although development and permitting plans for the 800 MW Vineyard Wind Farm (which was approved by regulators in 2021 and broke ground in November) are viewed by many in the industry as “blueprints” for solving some of the community, permitting, and technical challenges that other projects will face, US developers still will have to contend with a variety of challenges: local opposition from certain communities and fishing groups, the need for interconnection and transmission upgrades, and the usual array of commercial, technical, legal, and financial hurdles that accompany billion-dollar infrastructure projects, particularly those that involve installation of towers the size of a Manhattan skyscraper at sea via specially designed—and, thus far, European-owned—vessels. Many of these challenges will be overcome via strategies informed by successes in Europe’s more developed market.

However, a unique obstacle to US development for which US developers will not be able to look to lessons learned in Europe is with respect to the Jones Act—a suite of US maritime laws and decisions that requires vessels used in certain aspects of “coastwise” trade (transportation of people, merchandise, and industrial activities within US territorial waters) be US-built, US-flagged, US-citizen-owned, and US-citizen-operated. Because offshore wind turbines require installation via specially built self-elevating and self-propelled “wind-turbine installation vessels” (WTIV)—and because, to date, such vessels only exist in foreign waters and with foreign crews—many see the Jones Act compliance as a potential bottleneck for the nascent industry’s progress.

In a December 2020 US Government Accountability Office (GAO) report, stakeholders described two approaches to using vessels to install offshore wind energy projects in the United States. Either approach may lead to the construction of new vessels that comply with the Jones Act. Under one approach, a Jones Act-compliant WTIV would carry components from a US port to the site and also install the turbines. A WTIV has a large deck, legs that allow the vessel to lift out of the water, and a tall crane to lift and place turbines. Stakeholders told the GAO there are currently no Jones Act-compliant vessels capable of serving as a WTIV, although Dominion Energy is building one. Under the second approach, a foreign-flag WTIV would install the turbines with components carried to the site from US ports by Jones Act-compliant feeder vessels. This was done in the case of Block Island, which is currently the only operational offshore windfarm in US territorial waters. While some potential feeder vessels exist, stakeholders said larger ones would probably need to be built to handle the large turbines developers would likely use. Port improvements will likely also be required to accommodate these feeder vessels.

Although navigation of Jones Act requirements will be a challenging prerequisite to successful US offshore wind development, opportunity abounds for market players that are able to employ one of several key strategies to differentiate themselves from the competition and overcome this uniquely stateside challenge.

Further Background

Section 27 of the Merchant Marine Act of 1920 (46 USC 883) and its attendant regulations (and subsequent decisions issued by US Customs and Border Protections, the regulatory body overseeing Jones Act interpretation) are collectively referred to as the Jones Act. At its core, the act requires that vessels engaged in activities such as transportation of merchandise and passengers, dredging, towing, and related vessel escort services and towing assistance between two points in the territorial US waters (three miles) be US-built, US-flagged, US-citizen-owned, and US-citizen-crewed.

In 2021, an amendment to the Outer Continental Shelf Lands Act (OCSLA), which governs matters pertaining to US waters and the seabed beneath, coupled with two US Customs and Border Protection (CBP) rulings confirmed that Jones Act compliance would be a critical step in US offshore wind construction. First, the OCSLA amendment clarified that devices affixed to the seabed for the purposes of oil and gas exploration as well as developing “non-mineral energy resources” fall within exclusive federal jurisdiction and constitute “coastwise” points under the Jones Act. The CBP rulings (particularly HQ H316313, issued February 4, 2021, later affirmed to the market that although certain portions of the project construction and turbine erection process could fall outside the purview of the Jones Act and be completed using noncompliant vessels, the act would ultimately apply to offshore wind construction and operations and, therefore, require the market to carefully adapt to the Jones Act’s requirements.

Potential Solutions

Of course, the most obvious solution for project sponsors is to build Jones-Act compliant WTIVs, which might be made available for charter.

Dominion Energy has done exactly that with its Charybdis, which is expected to be a $500 million, largest-of-its-kind installation vessel to be based out of Hampton Roads, Virginia. Following construction (underway since December 2020 in Texas and expected to be completed in 2023), Charybdis will be available for charter. Dominion, Orsted, and Eversource already have entered into an agreement for Charybdis to construct Revolution Wind and Sunrise Wind, two projects off the eastern seaboard under development by the joint venture between Orsted and Eversource, and which will deliver power to customers in Rhode Island, Connecticut, and New York.

Other market players have indicated varying levels of intention to build additional vessels, though are not as advanced as Charbydis. For example, Eneti Inc., formerly Scorpio Builders, has announced its intention to construct at least one US-constructed, Jones-Act compliant WTIV. Though not yet contracted, Eneti submitted US Securities and Exchange filings in November 2021 to initiate a $200 million public offering to fund its plans.

But with over a dozen US-based projects already having secured leases from BOEM with more in varying levels of development, demand for new vessels, both WTIVs and feeder vessels, will surely outpace supply, and the goals of market players, the federal government, and applicable states cannot be met if the lengthy financing and construction of new vessels is yet another gating item to successful turbine installation.

Another option is the use of feeder-vessels: utilizing Jones-Act compliant tugs and barges to transport turbine components, equipment and personnel to and from WTIV jack-up vessels parked and affixed to the seabed at turbine locations. This is the tactic chosen by Vineyard Wind and confirmed as in conformity with the Jones Act in the February CBP Decision. Vineyard has contracted with both US-based FOSS Maritime and the US-branch of the Belgian marine services provider DEME to transport turbine components and personnel from the project’s port base of New Bedford, Conn., to the foreign-flagged and DEME-owned WTIV parked at each turbine location.

According to the February CBP decision, the WTIV in Vineyard’s plan is not required to be Jones Act compliant because it remains completely stationary during the installation of a given turbine, hence is not engaged in coastwise transportation, while the movement of its crane to unload components from the feeder vessels and installation on the seabed also does not constitute transportation. Similarly, the CBP decision also held that Vineyard’s transportation of tools, equipment, and personnel to and from the WTIV—and, critically, on board the WTIV as it moved from location to location—fall outside the Jones Act’s requirements because the tools and equipment do not constitute “merchandise” and because the crew onboard the WTIV “are directly and substantially related to the operation of the vessel.” Other construction activities such as grading, turbine foundation preparation, and cable laying also have been held to fall outside the scope of the Jones Act. However, in several instances based on nuanced fact sets and application Jones Act principles that may not be present in every project, companies are advised to consult experienced maritime counsel and seek rulings from CBP to clarify any open issues

Finally, it should surprise no one that since the passage of the original Jones Act in 1920, the regulatory environment has developed to allow some foreign participation in the ownership, construction, and financing of Jones Act vessels. For example, existing rules allow up to 25% foreign ownership of a Jones Act vessel and some foreign developers are seeking US partners to provide the requisite 75% Section 2 US citizenship. In addition, as an alternative to financing construction of a new vessels on the corporate balance sheet (as Dominion has done with Charybdis), the so-called “leasing rule” allows a US leasing company/financial institution to set up a US documentation citizen to own the vessel and time charter it on what is called a “hell or high water” long-term basis to a foreign person, as long as operational control of the vessel remains through a bareboat charter with an independent and qualified Section 2 US citizen. This allows the foreign time charterer to obtain use of the Jones Act vessel and to provide the financial support necessary to finance its construction.


As global demand for offshore wind farms and the green power therefrom increases, the scarcity of the specially built turbine installation vessels used to construct them is exacerbated in the United States by the Jones Act and its requirements that vessels used in coastwise trade—including non-mineral energy generation development and construction—be US-owned and operated, except in limited circumstances. However, certain strategies will permit US-based project sponsors to access and utilize foreign vessels or to build new Jones Act compliant vessels to accelerate the US offshore wind industry’s growth and unlock its full potential.