The vessels that install offshore wind turbines are enormous and highly specialized to their task. There aren’t many of them, as they are very expensive to build, and the cost for their time is substantial.
They are generally European-flagged or -owned.
This situation, in particular, could pose serious challenges for the many parties interested in developing offshore wind projects in U.S. coastal waters, thanks to a century-old federal law known as the Jones Act.
That law, formally known as the Merchant Marine Act of 1920, mandates that only vessels built, owned, managed and crewed by Americans can operate between U.S. ports. For any piece of equipment to be transported from one U.S. port to another, it must be on a Jones Act-compliant vessel. Since offshore wind farms, with foundations being built in U.S. territorial waters, are treated as ports under the law, this imposes significant constraints upon the expansion of 21st-century offshore wind farms.
The nascent offshore wind market in the U.S. does not currently have turbine equipment being built domestically, so the turbine blades, nacelles and more must be imported. But getting that equipment to the wind farm site runs into Jones Act issues.
The simplest execution plan being explored requires very costly double-handling of the turbine equipment. The equipment is imported to a U.S. port, then brought to the wind turbine site on a Jones Act-compliant barge. It is then lifted onto a specialized vessel for installation. In addition to the inherent risk of transferring expensive equipment between floating platforms in an ocean, extra handling requires extra expense.
For the 30-megawatt, five-turbine Block Island Wind Farm off the coast of Rhode Island — the first commercial offshore wind farm operating in U.S. territorial waters — the turbines were loaded onto the installation vessel in France, which transported them across the Atlantic, installed the turbines and sailed back. This cost-prohibitive approach does not appear viable at scale.
The Jones Act is unique to America; other countries do not have comparable laws impacting this market.
As an emerging market sector in the U.S., offshore wind represents a once-in-a-lifetime opportunity. The potential for job creation, new industry and supply chain growth, all supporting a renewable energy resource, makes this an exciting time.
In Europe, where offshore wind is a more mature market, the levelized cost of energy — a holistic measure of the costs of building and operating a generation asset over its life cycle — shows that offshore wind is arguably the cheapest form of energy. Part of that owes to the extraordinary purpose-built vessels that have streamlined the installation process. The U.S. doesn’t have these vessels yet and can’t use others’ currently.
There are some discussions of relaxing aspects of the Jones Act for offshore wind; there also are rumors of the rules being made more stringent. In May, the U.S. Senate Commerce, Science and Transportation Committee approved a bill that would require a report on what vessels are needed for offshore wind farms and whether they are available for U.S. projects. Such reports could apply pressure to revise the Jones Act for modern realities.
In the meantime, the growth of the U.S. offshore wind market seems likely to spur construction of Jones Act-compliant vessels that can support those projects. With opportunities this great, business always finds a way.
Developers for U.S. offshore wind farms need to address highly specialized supply considerations to meet their schedule, budget and operational needs. Read more about the supply chain challenges.