A Compelling Opportunity for Growth from Offshore Wind: Domestic Supply Chain

Posted by Fred Zalcman on May 29, 2019 3:11:01 PM

Offshore Wind - Orsted 500

This is a guest post from AEE member company Ørsted Wind Power. Fred Zalcman, head of government affairs North America for Ørsted, will speak on the panel “Strong Winds Blow for Offshore Wind” at Advanced Energy Now | East on June 13.

Offshore wind energy is no longer an “alternative” form of energy – it’s a cost-effective, clean, reliable and mainstream energy source that has the potential to power the U.S. East Coast in the near future. Ørsted has already invested significantly in communities from Massachusetts to Virginia, as we embark on bringing our portfolio of development projects to commercial operation and in so doing supporting robust job creation and training, economic development, and strategic investments throughout the local communities we serve.

Ørsted’s projects exist within a larger ecosystem of innovators competing for the opportunity to tap into the powerful American renewable energy market. Spurred by progressive state policy, the East Coast currently has reached a milestone of 2 GW of power purchase agreements (PPAs) for offshore wind under contract, and 3 GW of additional agreements anticipated in 2019. The market is expected to be upwards of 20 GW by 2030. Apart from meeting the states’ ambitious renewable energy and greenhouse gas reduction targets, offshore wind is already an important part of the states’ strategy for replacing planned retirements and at-risk generation, especially in the Northeast.  Competition and the push for innovation will create a virtuous cycle of cost reduction, job creation, and domestic supply chain development. 

While the creation of jobs to develop, construct, and operate each project is exciting, an equally compelling opportunity for growth in the U.S. lies within supply chain development. Ørsted’s longstanding history of delivering successful projects around the world positions us to attract new, global manufacturers to supply components for our projects. Tapping into our global resources and leveraging our long-established relationships will allow us to bring a robust offshore wind supply chain to the U.S. Bringing these manufacturers into the process early will pay dividends to the long-term growth of offshore wind, as we will expect to see rapidly decreasing costs. In fact, Ørsted has helped drive cost reductions of over 63% in the past seven years across the European market, and it is through our relationships that we can do the same in North America.

Apart from fulfilling offshore wind’s promise to create a new U.S.-based heavy industry, continued growth within this sector will depend on respect for other ocean users. Each project is different and every region we operate in is unique, so we rely on working closely with local community groups and governments. Whether it’s partnering with organizations like Responsible Offshore Development Alliance (RODA), the only national commercial fishing organization that is purpose-built for interacting with the offshore wind industry to maintain sustainable fisheries, or reconfiguring our windfarms to accommodate historical fishing patterns and help to provide greater ease of fishing within, and transiting through, the windfarm, our principles of collaboration and transparency are crucial to successful project development and execution.

As we experience increased demand for renewable energy, offshore wind is a clean, reliable, cost competitive, and large-scale portion of America’s green energy solution. This is an exciting time in the U.S. and the broader industry. At Ørsted, we’re ready to take our experience as the global leader to bring offshore wind to scale for American businesses and consumers.

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Topics: Guest Post, Advanced Energy Now Events