Offshore wind development is facing a fierce backlash this year, with the new administration putting a hold on federal permitting and trying to pause appropriated government R&D spending. Will the latest challenges curtail the momentum, or can the industry survive such troubled waters?

For those in the wind industry, the late teens to early ’20s of the 21st century may be remembered as the boom years for offshore wind development in the U.S. and abroad. Growth appeared to be unstoppable, as bigger, more powerful projects were built every year, the first U.S. offshore wind plants were commissioned, and investors queued up for offshore projects. The global-commissioned capacity of offshore wind increased from 3 GW in 2010 to approximately 68 GW as of the end of 2023.

Manufacturing and assembly innovations, such as 3D concrete printing on Sperra’s floating construction station, can be used to reduce the capital costs of offshore wind and increase manufacturing throughput of critical components such as offshore wind foundations at a fraction of the cost and time compared to building new port infrastructure. (Photo credit: Sperra)

[1] Not coincidentally, the cost of offshore wind generation decreased roughly 60 percent over the same period, according to the International Renewable Energy Agency. [2] What was behind this meteoric growth? Lower capital costs, of course, and expanded supply chains, as well as low interest rates, innovation, economies of scale, and increased need for clean energy. But over the last few years, some things have changed.

Rising interest rates, global supply chain issues, and changing political leadership have put projects at risk, especially in the U.S. As a 30-year veteran of the wind industry (with more than a few battle scars to show for it), I maintain that the long-term trajectory for offshore renewables — including fixed and floating wind and solar — remains overwhelmingly positive.

Facts of the matter

The underlying economics and physics of offshore wind and solar are solid. It’s a well-known fact that wind and solar energy are two of the lowest cost and cleanest forms of new electrical generation capacity today. The levelized cost of electricity (LCOE) of solar PV and onshore wind were 56 percent and 67 percent less, respectively, than the weighted average fossil fuel-fired alternatives in 2023. Even with the macroeconomic challenges of the past few years, the cost of electricity of new offshore wind projects continued to decline, decreasing 7 percent in 2023 compared with 2022 [2].

The lifecycle GHG emissions (which includes emissions associated with sourcing the materials and manufacturing the wind plant) of land-based, wind-generated electricity is a mere 1 percent to 2.5 percent that of coal-fired and natural gas-fired electrical generation, respectively. The physics of wind and solar are also more favorable offshore, as wind farms generate more energy compared with their land-based counterparts. While economic challenges for deep-water offshore wind and solar remain, new approaches to manufacturing, assembling, and deploying wind and solar foundations and anchors (two of the largest drivers of capital cost) hold promise for the sector.

Undeniable truths

There are certain undeniable truths at the heart of the energy transition. One of these is that electricity demand will continue to increase for the foreseeable future. U.S. energy use from data centers alone is expected to potentially triple by 2028, up to 12 percent of U.S. energy consumption, according to DOE estimates (although very recent artificial intelligence innovations may reduce future projections). Not all this demand can be met by conventional forms of electricity generation.

It’s a well-known fact that wind and solar energy are two of the lowest cost and cleanest forms of new electrical generation capacity today. (Courtesy: Shutterstock)

All-of-the-above strategy

We need an all-of-the-above energy strategy — and offshore wind is no exception. Many U.S. coastal states have few good options to address unprecedented energy growth and carbon-reduction goals. In New York, for example, which committed to achieving a zero-emission electric grid by 2040, the development of clean energy is tied directly to jobs and economic development.

New York’s Scoping Plan has estimated that new jobs driven by Climate Act investments are estimated to outnumber potential displaced jobs by a ratio of 10 to 1 in 2030, with as many as 318,000 jobs expected to be created in growing sub-sectors by 2040. New York’s goals include 9 GW of offshore wind by 2035.

Population centers

Energy generation needs to be close to population centers, which are increasingly coastal. According to the U.S. Department of Energy, nearly 80 percent of U.S. electrical consumption is in coastal states. Serving energy needs locally will become increasingly crucial from both a cost and resiliency standpoint. Locating generation closer to demand reduces transmission costs and provides new electricity options, reducing electricity costs overall.

Energy generation needs to be close to population centers, which are increasingly coastal. (Courtesy: Shutterstock)

Surviving and thriving

What will it take for the offshore wind industry to survive — and thrive — in 2025 and beyond? Relentless focus on three core objectives includes:

  • Growing U.S. manufacturing and jobs: According to a recent report by Oceantic Network, $25 billion in supply chain investments from across the offshore wind industry has already fueled significant growth in shipbuilding and steel production at U.S. ports. The impact is felt across 40 U.S. states and territories. Investments in U.S. manufacturing will continue to create long-term jobs, particularly in and around economically challenged port districts.
  • Lowering costs of offshore wind infrastructure: Project economics are driven by many factors, chief among them the embedded technology cost in support structures. Achieving lower-cost offshore wind will require a renewed commitment to innovative manufacturing methods, floating foundation designs, and anchoring solutions that are easier to deploy, lower cost, and made from lower carbon, locally sourced materials such as concrete.
  • A diversification mindset: To thrive in the years ahead, diversification will be key. This doesn’t mean pivoting away from core capabilities but expanding both geographic footprint and technology applications. For example, Sperra’s new floating construction station, which is built using OmniDockTM technologies, is primarily designed to manufacture support structures for offshore wind and floating solar but can also address offshore infrastructure needs as diverse as national defense, civil infrastructure, and ocean reef restoration. While Sperra is dedicated to U.S. ocean renewables, its technologies are highly transferable to other established and emerging offshore markets in the U.S. and abroad.

The current economic and regulatory challenges for offshore wind, while formidable, are not insurmountable. Challenges bring opportunities. Keeping our industry focused on lower cost solutions that expand U.S. manufacturing and create jobs will help align our goals with those of the current administration, as well as those of every offshore renewables developer working to optimize project economics.

Leaders change — this we all know — but the underlying need to develop and deploy renewable energy will not. Ultimately, the growing demand for more energy and lower costs will continue to make the energy transition inevitable.

References

  1. Offshore Wind Market Report: 2024 Edition, National Renewable Energy Laboratory, accessed January 25.
  2. Renewable Power Generation Costs in 2023, September 2024, IRENA, accessed January 2025.

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