May 15, 2024 Oceantic Network’s new report, Suppliers’ Guide to Success: Smart Scaling for the U.S. West Coast Floating Wind Market, analyzes the requirements for a full buildout of floating offshore wind on the West Coast and proposes solutions to industry and government that will allow the sector to flourish. The paper covers several key actions West Coast policymakers can take to ensure the region can become a global leader in floating offshore wind: Prioritize investments in port and transmission infrastructure. Structure offtake awards in a way that emphasizes project deliverability. Establish a firm, steady, and long-term procurement schedule for offshore wind power. The paper condenses lessons learned from offshore wind policy regimes on the East Coast and around the world with the goal of avoiding unnecessary pitfalls for West Coast offshore wind deployment. It also details the current market landscape that underpins the region’s opportunity and the work already done to get the industry where it is. Findings were produced with the help of the Network’s West Coast Supplier Council, a group of companies focused on the unique needs and development of the region’s offshore wind sector and its supply chain. Members of the West Coast Supplier Council include: Aker Solutions AS Burns & McDonnell Crowley Wind Services EEW AOS Foss Offshore Wind Hellenic Cables Hitachi Energy Manson Construction Nexans Principle Power, Inc. Vestas American Wind Technology For weekly U.S. offshore wind updates, subscribe to the Offshore Wind Insider newsletter.
April 22, 2024 Oceantic Network releases its U.S. Offshore Wind Quarterly Market Report in April, July, and October. Each report builds off our U.S. Offshore Wind Annual Market Report and provides key analysis of both federal and state government activities impacting the U.S. offshore wind industry. The quarterly reports ensure companies are informed on offshore wind industry developments affecting their business. Notable milestones for the first three months of 2024 include Ørsted and Eversource’s completion of South Fork Wind project in March. Next up is Vineyard Wind, to be completed later this year, which also began delivering power to the grid. Meanwhile, two new projects, which are collectively triple the size of South Fork and Vineyard, were announced to begin installation this summer. The report details important developments that affected the U.S. offshore wind industry in the first quarter of 2024, including: BOEM increased the total capacity approved for construction by over 30% as the U.S. more than quintupled its installed offshore wind capacity – from 42 MW to 242 MW. U.S. Forged Rings announced a new $700 million tower and forge facility to be located on the East Coast, an investment made purely based on the strength of the U.S. market. Another 4,000 MW of projects are expected to begin installation activities this summer. New IRS tax guidance will drive down costs for a range of offshore wind activities across the East Coast. Four new crew transfer vessels, the workhorse of the offshore wind industry, have launched in just the past three months. New offtake awards contain provisions supporting supply chain investments throughout the East Coast. For weekly U.S. offshore wind updates, subscribe to the Offshore Wind Insider newsletter.
April 11, 2024 Guest article written by Marcus Lehmann, Co-Founder & CEO of CalWave The U.S. offshore wind industry is installing steel in the water for the first time at a commercial scale. The first utility-scale U.S. offshore wind farm, South Fork Wind, is now fully commissioned and operational. Meanwhile, 15 miles off the coast of Martha’s Vineyard, Vineyard Wind has started delivering power to the grid. The first Jones Act Service and Operations Vessel (SOV), the ECO Edison, is fast approaching its first voyage. The first floating offshore wind leases have been awarded off the California coast and BOEM’s Gulf of Mexico region is preparing its second auction for offshore wind lease areas. These major developments paired with new tax credits from the Inflation Reduction Act are coming together to create a sea change across America. While much attention has been paid to the growth of offshore wind, wave resources are showing a positive potential impact to the energy grid. Recent studies and reports from Stanford University (1), U.S. National Labs (2), Wave Energy Scotland (3), and EU Scores (4) are highlighting the technology, and economic and system-level benefits of combining floating offshore wind and wave systems. Generating more renewable energy from our oceans holds incredible promise. According to the National Renewable Energy Laboratory (NREL), marine renewable energy has the potential to power 57% of U.S. electrical needs (5). That’s a lot more than the 12% of total energy demand produced by wind and solar in 2020. A coordinated effort combining these resources off the U.S. coastline can lead to: Complementary Power Resources: By sharing balance-of-system infrastructure with offshore wind, wave energy converters (WECs) can boost the capacity factors of offshore projects without significantly increasing costs. This optimum usage of the seabed will enable a higher production of energy per square mile. Ocean swells form from the wind blowing across the ocean’s surface. This form of energy can carry hundreds or even thousands of miles across the open ocean. By the time those swells approach land, their strength is no longer impacted by wind speed. If an offshore wind farm is not producing at capacity, wave energy can fill the gap using the same infrastructure. New Laws Opening Doors: Marine energy technologies may be permitted through the same leasing mechanisms as offshore wind. There is not yet a clear path for permitting marine energy projects, but new state laws in both California and New Jersey may help pave the way not only for state regulatory agencies, but also for the Bureau of Ocean Energy Management (BOEM). Cost Savings: Marine renewables that are co-located with offshore wind will do more than just support America’s net-zero targets. They may also lead to significant cost savings for storage and transmission onshore. According to the Pacific Northwest National Laboratory (PNNL), the complementary generation profile of marine renewable energy creates an opportunity to reduce the need for energy storage technologies, thus reducing overall system costs. Economic Benefits for a Competitive Edge: Wind and wave energy farms have the potential to create local jobs, enhance local economic development, and increase supply chain demand. Fixed offshore wind (industrialized) and floating offshore wind (industrializing) may also pave the way for quicker learnings as wave energy technologies scale up. By implementing lessons learned from offshore wind and floating platforms, companies can gain an edge in the industrialization of wave energy technologies. A Versatile Option: Wave energy technologies are more versatile than offshore wind turbines and can often go where offshore wind cannot. For example, technology from California-based company CalWave Inc. operates submerged and does not require specialized vessels. This benefit gives developers the flexibility to deploy systems closer to shore than would be possible for offshore wind turbines, reducing installation costs. To meet energy demands, the U.S. and other countries will rely on a portfolio of energy options, including a combined effort of wind and wave energy. The offshore wind industry can absorb the benefits of this deployment and the commercialization of the wave energy industry. In the U.S. today, Oregon State University-based PacWave is preparing to deploy the first grid-connected wave energy generation system in US history. The nonprofit organization is a newly Department of Energy (DOE)-funded, pre-permitted, grid-connected wave energy test site seven miles off the central Oregon coast. Diverse energy sources are needed to address power issues across the world. Wave energy is one part of the solution bringing a new source of offshore renewable energy. Utility-scale wave energy deployments are on the horizon, and the offshore wind industry can build a case to partner with wave energy businesses to extend power resources, manage risk during low wind periods and build economies of scale for installation, operations and transmission New at IPF this year, Oceantic Network is excited to launch a new Ocean Renewables track to further discussion about other forms of ocean renewable energy. View the complete agenda here. About the Author: Marcus Lehmann founded CalWave in 2014 and serves as the CEO. Marcus was accepted into the first cohort of Cyclotron Road, a 2-year fellowship and incubator for entrepreneurial scientists working in clean energy at the Lawrence Berkeley National Laboratory (LBNL) that allowed the formation of the founding team. Marcus is a co-inventor of several key US and international patents and has managed CalWave’s industry collaborations and relationships. In 2016, he was named in the Forbes 30 Under 30 List for Energy. Marcus has previous industry experience with the major European utility E.ON and has worked for Siemens and BMW in the past. Marcus holds a M.Sc. in Mechanical Engineering from the Technical University Munich, an honors degree in Technology Management, and a Ph.D. in Systems Engineering from Technical University Hamburg-Harburg. Sources: 1.“Combining Offshore Wind and Wave Energy farms to facilitate Grid Integration of Variable Resources,” Eric Stoutenburg, University of Stanford, April 23, 2012 2.“Understanding the Grid Value Proposition of Marine Renewable Energy,” PNNL, 2024 3.“Shared Floating Wind and Wave Projects offer 12% Combined LCOE Reduction to UK,” Wave Energy Scotland, May 11, 2023 4.“Co-location of Offshore Wind, Wave, and Floating Solar Could Lead to Unprecedented LCOE Reduction, Report Finds.” Amir Garanovic, May 11, 2022 5.“Marine Energy in the United States: An Overview of Opportunities,” Levi Kilcher, Michelle Fogarty, and Michael Lawson, National Renewable Energy Laboratory, February 2021
April 8, 2024 Oceantic Network’s annual Leadership 100 Summit gathers U.S. offshore wind leaders for an intimate working meeting to identify the industry’s pressing, shared challenges and develop action plans to continue growing a robust U.S. offshore wind industry and supply chain. In April, the Network released an executive summary and meeting notes from the Leadership 100 Summit in November 2023, sharing much of the valuable insight gained by attendees with the broader offshore wind industry. Download the report below! Key findings include: The potential to foster greater supply chain investments and advancement by encouraging greater project viability in the procurement structure and by decoupling projects from port and transmission infrastructure development, activities which developers may be ill-suited to execute The need to build a greater understanding of the downstream supply chain costs and increased market risk that comes from continually increasing turbine sizes and lead to less efficient development The need for a greater industry-wide collaborative communications strategy to combat misinformation and increase public support for offshore wind Data’s ability to strengthen the industry through building public support, reducing pre-development costs, or helping make more environmentally sound regulatory decisions
March 20, 2024 Here’s why Burns & McDonnell remains confident in the industry despite recent hiccups. A little more than seven years ago, Burns & McDonnell had no involvement in the offshore wind industry. Today, the engineering firm is involved in roughly 80% of U.S. projects across a range of activities — and it’s not slowing down anytime soon. Heading up the company’s now well-established role in this new industry is Offshore Wind Director Tony Appleton, who recently spoke with Oceantic Network about the ups and downs of the industry over the past year. While 2023 saw many successes for the U.S. offshore wind industry, cost overruns due to inflation and supply chain constraints led to several project cancellations. Despite some rough waters, states and many private companies remain confident in the industry’s future success. Tony shared that Burns & McDonnell has run into its fair share of challenges amid industry shakeups. As a result, the company has looked even more closely at the work it takes on, the reasons behind it, and the risks attached to some of those challenges. “As the offshore wind industry evolves in the U.S., we continue to carefully analyze the developing federal and state requirements. This critical observation doesn’t hinder our progress in pursuing project opportunities, but it does necessitate more comprehensive risk reviews. By examining the work we undertake, the underlying motives, and the associated risks, we are positioning ourselves to navigate the complexities of this developing industry with informed precision.” Here’s what else he had to say about the state of offshore wind today. Oceantic Network: In many ways, 2023 was a difficult year for the offshore wind industry — even though we had a lot of successes. But such hardships were not limited to the U.S. What other factors impacted the industry globally? Appleton: Looking first at the global supply chains, several issues affected them. One is obviously the post-Covid inflation. You’ve then got various wars taking place, particularly in Ukraine, that have affected energy costs and inflation. So, there’s a couple of issues there, but not necessarily ones that we can work to solve. Oceantic Network: What are your thoughts on the state of the global market for offshore wind and other renewable energy specifically? Appleton: If you look at the global renewables industry, the desire for offshore wind is apparent. This has caused an almost incomprehensibly large demand on the supply chain. Countries can react in a couple of different ways, one of which is to build numerous new plants and numerous new facilities. That could be a short-term solution but may pose a long-term problem. As offshore wind reaches broader adaption, the demand will slow down making it difficult to occupy those factories long-term That is one reason it’s important that countries work to adopt a balanced approach to their supply chain development. Oceantic Network: What issues did you see that were specific to the U.S. last year? Appleton: There’s a uniqueness to the U.S. as every project is different. Every project is the first of its kind. Every single one has a different capacity, is done a different way and has different requirements. Given that the industry is still evolving in the US, issues are being raised in many areas. For example, if you want to permit an offshore wind project in Europe, maybe half a dozen permits are required compared to the US where permitting these types of projects can require more than a hundred permits. In addition to a strenuous permitting system, the U.S. also has competition between the states given that in many cases, the states aren’t working together. Oceantic Network: What do you see being done to alleviate these concerns? Appleton: We’re starting to see the beginnings of collaboration. You’re starting to see the states talking to each other and putting thought into how offshore wind adoption can be done together. This is an important consideration because if it is done collectively, there will be more consistency for individual projects and across the supply chain. That’s what three New England states are looking at with their procurement processes. They’re moving from local content to regional content. If they follow through on this plan, it can be a huge step forward, and can serve as an example for other parts of the U.S. This concept of clustering can be a huge asset to resolving some of the industry’s supply chain issues. Oceantic Network: Does standardization play a role here? Appleton: Yes, another thing that can be done is to start doing standardized projects. Rather than having a different capacity for each project, there should be an aim for certain consistencies. Another area with potential for standardization is the race for bigger turbines. The industry is not giving itself time to catch up. Turbine manufacturers do not have adequate time to test new models before bringing them to market. Recently, we have seen some of the turbine manufacturers slow the development of newer, larger turbines. I see that as quite positive because it gives the supply chain time to catch up. If the U.S. were to build numerous wind farms using 15 MW turbines, this standardized way of doing things could potentially drive down costs, similar to what we see happening with wind farm projects in Europe. Oceantic Network: Could share some of your experiences with Burns & McDonnell over the past year in the U.S. in comparison to your operations elsewhere? Appleton: I’ve seen a lot of growth in the U.S. Industry and feel there is a clearer understanding of what being part of the global offshore wind industry means rather than just a U.S.-centric industry. Offshore wind is very reliant on the global supply chain as it can’t all be managed domestically in any country (with maybe the exception being China). That’s something perhaps a little bit different from many other industries, certainly for us in our work. We’ve had to educate ourselves in what it means to rely on the global supply chain to help us be involved in the industry. Oceantic Network: You said your appetite for offshore wind hasn’t changed. What would you say are the positive proof points you could point to that indicate the industry’s future success? Appleton: The country is preparing for offshore wind, especially with the lofty goals set forth to be achieved. While some projects have slowed or been canceled, what we are seeing in the background are the many upgrades being made by utility companies in places beyond Long Island and Connecticut. The grid is seeing upgrades all over and much of that is due to the acknowledgment that offshore wind is not just a concept but a reality.
March 19, 2024 It’s a good time to enter the offshore wind supply chain. State demand for offshore wind energy has never been higher, the federal government continues to identify and auction new sites, and projects are being installed and producing power off the East Coast. The offshore wind industry has arrived in the U.S., and the opportunity is ripe to be part of the supply chain today, tomorrow, and into the future. But even with ample opportunities, getting involved in offshore wind — and especially securing contracts — can be a long and arduous process. And many companies may not be aware they already have the skills and tools to engage in this growing opportunity. As Jonathan Salzman, Supply Chain Manager for Ocean Winds, says: The supply chain already exists. It’s just a matter of getting companies ready. “There is already a supply chain for offshore wind in the U.S.,” noted Salzman. “There are suppliers across the country providing technical services and precision goods that have applications in offshore wind — they just aren’t working in the industry yet!” Salzman is one of the speakers who will participate in What’s New & Spinning, a series of interviews with developers taking place at the 2024 International Partnering Forum (IPF), on April 22-25 in New Orleans. Global offshore wind developers will share project updates and offer insights into the supply chain and how suppliers can enter, engage, and participate in the offshore wind and ocean renewables industry. Ocean Winds (OW), a leading international offshore wind company that develops, finances, builds, and operates offshore wind farms around the world, has a secured portfolio of approximately 16.6 GW of offshore wind gross capacity across seven countries in Europe, North America, and Asia. In the U.S., OW has three projects under development that could deliver roughly 6.1 GW of renewable energy. To keep up with project requirements, OW relies on a deep and robust supply chain. Developers such as OW contract directly with a handful of large Tier 1 suppliers, who are then responsible for hiring local and regional suppliers to help fulfill project requirements. We sat down with Mr. Salzman to help demystify for suppliers how they can enter the market, and how OW uses the local supply chain to support economic development in communities. Join us at IPF for more What’s New & Spinning insights to help your business better understand the offshore wind supply chain and procurement processes. Oceantic Network: Describe your processes for identifying suppliers for your projects. Jonathan Salzman: Ocean Winds phases solicitations for major package suppliers. These typically begin with a market “depth-check,” otherwise known as a Request for Information (RFI) in which we engage our Tier 1 suppliers to understand capabilities, approach to program delivery, and how they will engage local suppliers. The RFI is followed by a more in-depth Request for Proposals (RFP) process, where we gather specific information on delivery, risk, and price from a shortened list of Tier 1s. This process includes iteration and technical and commercial clarification to reach the Best and Final Offer (BAFO) and finalize the agreement. These agreements then help establish a robust supply chain that supports investment decisions and project financing. We encourage our Tiel 1 partners to think creatively about ways we can collaborate on solutions to identify, scale, and contract with local suppliers. Together, we develop local supply chain capacity over the longer-term because a rising tide floats all boats. RFIs are managed by an OW technical lead who deeply understands the scope of work and operating environment. They are supported by a procurement team that gathers details about how Tier 1 suppliers will identify and engage subcontracted suppliers, track and report spend with local suppliers, and provide guidance to enhance long term relationships and delivery by local suppliers RFI versus RFP: Request for Information (RFI) is an informal process for gathering preliminary information and exploring offerings about potential suppliers that typically happens prior to the start of the procurement process. Whereas a Request for Proposal (RFP) is a more formal process that solicits bids, requirements, solutions and costs from suppliers for a specific project. An RFP typically follows an RFI. Oceantic: What are common errors you see companies make when seeking to work with a developer or get involved in a project? Salzman: The biggest challenge I see is local suppliers trying to get in touch with us directly as your buyer. For most suppliers, we are your buyer’s buyer. Offshore wind supply chains are complicated to disambiguate — especially who buys what, when, and for what reasons. Most suppliers will find better traction building relationships with Tier 1 suppliers. Deveoplers can also play a role as a facilitator between the local suppliers and those Tier 1 suppliers. The tough truth is that for most developers, those Tier 1 partners and local suppliers are still being evaluated and selected. With only a few major Tier 1 players, suppliers can concentrate their business development efforts on those that are most closely aligned with their strengths. The good news for suppliers wanting to be in this industry is that there is ample opportunity for suppliers to build relationships with Tier 1 companies and get sharper on industry needs. Oceantic: What advice would you give smaller companies as a first step when trying to work with a developer or one of their suppliers? Salzman: My advice falls into 4 categories: Take the chance to get sharp: Familiarize yourself with project development timelines and be aware that these timelines do not always line up with news about big industry advancements. Big industry news breaks more often than big contracts are awarded, especially as the industry comes out of two plus years of stiff headwinds. A lot of exciting news for the industry is on the horizon, but most projects are still several years away from construction. Have patience: Most developers are still evaluating big Tier 1 suppliers and finalizing project designs. There is ample opportunity for suppliers to build relationships with Tier 1s and get sharper on industry needs. Offshore wind is here to stay in the U.S., and it will take some time to mature. Know what you don’t know: I encourage suppliers to spend time understanding project timelines. Don’t be afraid to ask developers and industry experts questions about it. We love to talk about more than just “When are you buying?” The best way to demonstrate you know offshore wind is to be curious and ask specific questions. Offshore wind is new to most of us in the U.S. Yet we are passionate about building this industry and love talking about it, especially with like-minded people at IPF. Ask “why local”?: Consider what work on developments will (or should!) be done locally, and if there is an opportunity to plug in. There’s a competitive advantage to being local especially since that is where a lot of the work will be performed most competitively, particularly for port construction or onshore work like transmission or grid interconnection. Similarly, there are key opportunities for local businesses that might not be obvious such as over-the-road logistics, personnel transport, quayside fuel deliveries, and more. Interested companies should join the Network’s Supply Chain Connect. A resource that allows companies to publicly indicate their intensions and abilities to supply components and services for U.S. offshore wind projects. It also serves as a resource for companies looking to buy from and partner with other offshore wind firms. Oceantic: How is risk evaluated and factored throughout a project’s procurement process? Salzman: Risk is perceived differently by each player in our supply chain. Suppliers should ‘tune’ their pitch based on the perceptions of risk for those they are engaging with. For example, developers care about safety, quality, and deliverability and these are baseline requirements for project participation. Suppliers should consider the incremental value (and therefore risk reduction) they offer their buyer. Oceantic: How do you engage with stakeholders throughout the supply chain? Salzman: Supply chain stakeholders are a diverse group, spanning from local community organizations and business owners, all the way through organized labor, state leadership, some of the largest maritime operators in the world, and more. We engage directly with many organizations operating at the community level who help us identify and engage with local suppliers. We also engage with our Tier 1 partners to support them to utilize local businesses and the resources made available by states to support them. Our team conducts outreach events and meet-the-buyer sessions, in which our technical teams meet one-on-one with local suppliers, giving feedback on capabilities and advice on where to go next. We understand that we may not be the direct buyer for many local suppliers, and therefore we can bring to bear to provide actionable feedback and connections for suppliers to break into the industry, rising the tide for all. As a developer, we have the benefit of seeing across the field, and have a mandate to connect dots and facilitate the maturation of the American offshore wind supply chain. We are also able to apply the knowledge and lessons learned from OW’s international network of projects and supply chain experience to our work here in the emerging American offshore wind market. Oceantic: Why is it beneficial for individuals and organizations across the offshore wind supply chain to attend the What’s New & Spinning (WN&S) sessions at IPF? Salzman: IPF is the national conference for the offshore wind supply chain — and the expanding blue economy around it. WN&S is a unique and powerful opportunity for leaders from across the offshore wind industry to gather in one place to share insights, hear directly from developers, get a broad stroke understanding of their priorities, and catch-up face-to-face with folks from the industry. While our projects are huge, the offshore wind community is small and IPF creates the best forum to meet industry colleagues and make new connections. Ocean Winds is excited to share our national and international expertise, discuss our projects, and engage with members of the offshore wind supply chain through the WN&S session. We look forward to continuing to build meaningful and productive connections across this growing industry. About Ocean Winds Ocean Winds is an international offshore wind company that is a 50/50 joint venture of EDP Renewables and ENGIE. OW develops, finances, builds, and operates offshore wind farms all around the world driven by its belief that offshore wind energy is an essential part of the global energy transition. OW currently has a secured portfolio of approximately16.6 GW of offshore wind gross capacity in various stages of operation (1.5 GW), construction (1.9 GW), or advanced development (13.2 GW) across seven countries in Europe, North America, and Asia. In the U.S., OW currently has three projects under development: SouthCoast Wind is a fixed-bottom project that will be located off the New England coast and has the potential to generate about 2.4 GW of renewable energy. Bluepoint Wind is a fixed-bottom project that will be located off the New Jersey and New York coasts and has the potential to generate about 1.7 GW of renewable energy. Golden State Wind is a floating project that will be located off the central California coast and has the potential to generate about 2 GW of renewable energy.
