Though well established and growing fast in Europe, offshore wind power has yet to get off the ground – or in the water – in the US. That’s despite the tremendous potential offshore wind holds in terms of supplying vast amounts of clean, renewable electricity to highly populated areas all along the US East, West, Gulf of Mexico and Great Lakes’ coasts.
Pike Research forecasts that investment in US offshore wind power will rise steeply over the next six years, with revenue reaching $104 billion by 2017. That’s a 56% constant annual growth rate (CAGR). They could reach as high as $130.5 billion under different assumptions incorporated in a “more aggressive scenario,” according to Pike Research’s “Offshore Wind Power” report.
“The world’s best wind resources are largely untapped because they are located at marine sites that cannot be owned or controlled in the traditional way,” notes Pike Research senior analyst Peter Asmus. “At the same time, interest in freshwater offshore wind is also picking up, especially in the Great Lakes in the United States and Canadian Midwest.”
The long-term challenge for aspiring offshore wind power project and technology developers and suppliers is to get the cost of electrical power production down close to $0.10 per kilowatt-hour over the next 20 years, according to the report.
Pike recognizes the significantly higher costs of developing offshore wind power – projected at times to be 2x-3x higher. Then again, the returns are also higher, as winds tend to blow steadier and stronger offshore than on. Yet on balance that means project developers will probably need to install larger wind turbines and on a larger scale than has been the case on land.
It also notes that the challenges of developing the nation’s offshore wind resources are different than those that have confronted the development of land-based wind power in the US. Some 70% of the cost of offshore wind power projects is associated with infrastructure, installation and maintenance, as opposed to the cost of the wind turbines, where the ratio is reversed.
Serving the Public Interest
Europe will continue to be the world’s leading developer of, and market for offshore wind power, according to Pike research’s analysts. Europe will account for a whopping 75% of installed global offshore wind power capacity in 2017, the research firm forecasts.
The pieces are finally starting to fall into place for the development of US offshore wind power. The US Dept. of Energy recently announced a $43 million program to jump-start offshore wind power development.
The outcome remains largely uncertain, however. Detractors regularly trot out a litany of claims to forestall development of offshore wind power in the US: large, up-front costs; technological and technical challenges; and even their negative environmental impacts. Are these any greater or worse than drilling for oil and gas in the Gulf of Mexico, much less the Arctic Ocean?
Clearly, the answer is no, and the US populace would continue to be ill-served if their government representatives do not establish fair, equitable support and incentives for developing a largely homegrown industry with such economic, social and environmental benefits and advantages.
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