Posted by Lewis Lines – 08.07.19
To what extent can the emerging offshore wind market in the U.S. support the transition away from fossil fuels? JD Ross explores the rapid rise of offshore wind in the U.S. and a growing interest from leading European energy companies.
Industry experts believe the offshore wind industry in the U.S. is developing quicker than expected and now has the potential to support capacity gaps in the national energy market. A recent statement by Bloomberg New Energy Finance (BNEF) suggests that the offshore wind market could support the transition from conventional fossil fuels and provide a solution for the resulting capacity gaps due to retiring energy sources in certain regions of the United States.
At the U.S. Offshore Wind 2019 event in Boston, BNEF highlighted that moving away from fossil fuels and meeting capacity gaps were two significant factors supporting the development of the offshore wind market, along with providing a clean source of energy to compliment a forecasted surge in the electric vehicle industry.
Findings for power demand peaks for energy in Boston indicate evening peak demand, which is at its highest during the winter coincides with the optimum offshore wind output, supporting lower energy prices. The correlation of offshore wind with peak demands is favourable for supporting capacity gaps and a great opportunity for the power industry to continue reducing carbon emissions.
BNEF has forecasted that the offshore wind market will continue to grow over the next few years and will add between 1-2 GW each year until 2030. Improvements in technology and the prevalence of larger turbines makes a prediction of installing 1-2 GW more achievable than several years ago.
The potential market opportunities in the U.S. are not going unseen, with many businesses outside of North America interested in investing in new offshore wind projects. Leading energy company Innogy is currently segmenting its business and has showed their interest in partnering with leading oil majors to develop offshore wind sites in the rapidly developing U.S market. New projects off the coast of the U.S. have become a significant area of attention for energy companies within Europe. Europe contains the biggest offshore market in regards to the installed capacity, with a number of businesses forming partnerships with oil companies, such as Shell.
Hans Buenting, the chief operating officer at Innogy explains that big oil companies are showing more interest in the renewable energy market due to a decline in their previous business ventures. Buenting confirms that Innogy would look for potential partners to explore the huge potential of the offshore wind market in North America. Innogy has released a target of installing over 500 MW of onshore wind power in the U.S. by the end of 2020.
Innogy believes utility companies and oil businesses are a good match to develop offshore wind sites due to the initial capital required for these assets. Oil businesses have considerable experience with offshore platforms but lack the experience with developing offshore wind farms.
Earlier this year Innogy partnered with Shell and Stiesdal Offshore Technologies A/S to assess floating offshore wind turbines off the Norwegian coast. Innogy highlight that floating technology is vital for many offshore markets, including California, due to the conditions and steepness of the surrounding seabeds.
The changes at Innogy will result in parent company RWE managing the renewable energy section of the business, along with E.ON. Earlier this year RWE stated they intended to invest billions into enhancing the U.S. renewable sector and confirmed it would take over a 3 GW portfolio of projects and continue to expand this further to 8 GW.
Posted by Lewis Lines – 08.07.19