New offshore wind developments are poised to help the US usher in a new era in energy — but first, they need ships. More specifically, they need massive specialized vessels capable of erecting a skyscraper-sized turbine in the open ocean. Perhaps unsurprisingly, these are hard to come by.
Wind turbine installation vessels are already in short supply globally. And in the US, policies aimed at protecting domestic shipbuilding make it even harder for wind farm developers to get their hands on those vessels. Unless the US figures out how to bridge that gap, it could be choppy waters ahead for the country’s offshore wind dreams.
In the US, President Joe Biden has set a goal of “doubling” offshore wind this decade, part of a broader effort to power the country’s electricity sector with purely clean energy by 2035. In order to meet those goals, the US will need to build up a lot more aquatic infrastructure off its shores. There are already plans for at least 16 wind projects off the East Coast of the US — they’re just awaiting permits — and they’ll need the services of these very specialized ships.
“IT’S PRETTY INSANE. IT’S A PRETTY LIMITED MARKET.”
“It’s pretty insane. It’s a pretty limited market,” says Claire Richer, director of federal affairs at American Clean Power Association (ACP), a group that represents the renewable energy industry in the US. If all of a sudden, all of the prospective US wind farm projects began construction at the same time, “then we have a problem,” she says.
All of the offshore wind projects being developed around the world are vying for time with these vessels at a rate of up to $180,000 a day. The industry is still pretty nascent, providing just 0.3 percent of power generation globally. But that’s expected to change because the potential is enormous. Offshore wind could one day generate 18 times the global electricity demand of today, according to the International Energy Agency. It forecasts that offshore wind will be a trillion-dollar industry by 2040, growing by 13 percent each year.
The industry is already advancing at breakneck speeds; massive new turbines can harness more power than ever before. Take General Electric’s Haliade X, which became commercially available in 2020. At 853 feet tall, it dwarfs previous generations of turbines. Imagine the Statue of Liberty stacked on top of the Washington Monument, and you’ve got a sense of its size.
To put that monstrosity together at sea, you need a special kind of boat called a wind turbine installation vessel. These ships need to be big and strong enough to carry the turbine pieces from port to installation site. Once they’re on location, these giants have legs that can reach down to the seafloor. That steadies the vessel and lifts it up out of the water so it can act as a stable platform. On top of that platform is a crane powerful enough to lift turbine components and install them.
There were only 32 of these wind turbine installation vessels in the world in 2020, according to a recent analysis by Norwegian firm Rystad Energy. Even though more are being built, the global fleet won’t be enough to meet offshore demand beyond 2025, according to Rystad.
Building new vessels capable of constructing massive wind turbines can take several years. And despite the growing need, shipbuilders and offshore wind developers have been hesitant in the past to invest in new ships until upcoming projects have acquired the permits they need to begin construction — which slows things down even more.
“It’s been this kind of a chicken and egg situation in the vessel market,” says Alexander Fløtre, a product manager for Rystad.
VESSELS IN THE EXISTING FLEET ARE BECOMING OBSOLETE
What’s more, some of the vessels in the existing fleet are becoming obsolete because turbines are growing increasingly gigantic. At 351 feet long, a single turbine blade for the Haliade X is already longer than the tower height of one of GE’s older turbines. Longer blades can generate more power, and taller turbines can reach stronger winds at higher altitudes. So companies are competing with each other by building bigger turbines. “You see this race,” Fløtre says.
That makes the shortage of ships a bigger problem. So far, there are only 12 vessels in the world capable of installing next-generation wind turbines like the Haliade X, according to ACP.
There’s yet another challenge that’s specific to the US: none of the existing global fleet complies with America’s Jones Act. The 1920 act requires vessels moving between two points in the US to be built, owned, crewed, and registered in the US. That also applies to a vessel transporting turbine parts from a US port to a project site that’s within federal waters.
The first Jones Act-compliant wind turbine installation vessel is currently being built by Virginia-based utility Dominion Energy, but it won’t be ready until 2023, and it comes at an enormous cost of $500 million. That’s even more than what companies have bid to lease federal waters for offshore wind development, according to ACP’s Richer.
“Dominion’s installation vessel is going to have to be constantly working in order to recoup the cost of construction,” says Patrick Finn, a maritime tech analyst for the consultancy Thetius. Jones Act restrictions make shipbuilding significantly more expensive in the US, Finn says. A similar vessel built in South Korea might cost about half of what Dominion is paying, according to Finn.
THERE ARE ONLY 12 VESSELS IN THE WORLD CAPABLE OF INSTALLING NEXT-GENERATION WIND TURBINES
For Dominion, the steep cost may still be worth it. “There was a big need there that we saw in the US,” says Mark Mitchell, senior vice president for project construction at Dominion. “It’s an important step to support the industry coming to the US and it certainly provides an important option to install even our own project.”
Dominion will need the vessel to build its planned 2,640 MW wind farm off the coast of Virginia. After that, the vessel will eventually be hired out for other companies’ projects.
There are ways to work around Jones Act requirements. Smaller “feeder” vessels that are already Jones Act-compliant can bring equipment and turbine components to foreign installation vessels stationed out at sea. Some companies are already designing new Jones Act-compliant vessels to service the construction or operation of new wind farms. If the foreign vessels aren’t transporting goods, then they won’t be in violation of the act. That’s how the US’s first offshore wind farm at Block Island was built. A second small wind farm, a 12 MW demonstration project Dominion built off the coast of Virginia, was just completed last year.
In the future, turbines could even be assembled almost entirely at port and brought out to sea pretty much intact. Doing so could eliminate the need for a specialized wind turbine installation vessel. The US could use much cheaper vessels to transport the completed turbine and even repurpose Jones Act-compliant vessels used in the oil and gas industry. “It allows us to do it for less cost and faster,” says Willett Kempton, a professor at the University of Delaware who is leading research into this method.
Whatever route offshore wind developers choose, all of these options have the potential to spur a boom in US boatbuilding. “That’ll be a boost for the Gulf Coast economy, my hometown,” says Joseph Orgeron, co-founder of the company 2nd Wind Marine. “There will be quite a number of purpose-built ships that will have to be built in the US, just to take care of US offshore wind development over the next 20 years,” Orgeron says.
A BOOM IN US BOATBUILDING
Orgeron’s company provided the feeder vessels for the construction of the Block Island wind farm in 2016. Before that, his family’s business supplied vessels for oil and gas development in the Gulf of Mexico. That boom started declining in the 1980s, and their vessels were used more and more to take old oil and gas structures out of the Gulf. Now, the future of Orgeron’s business is in offshore wind.
“That [industry], basically that could be fired back up,” Orgeron says. Only this time, they won’t be building new oil rigs or tearing down their hulking remains. Instead, they’ll build new giants for a new age of more sustainable energy.