Welcome to the latest issue of IEEFA’s By the Numbers newsletter. We turn our attention here to the offshore wind sector, long the laggard in the U.S. renewable energy arena with just seven installed turbines and a total capacity of only 41.3 megawatts (MW) as of year-end 2023. Beset by a confluence of financial and supply chain problems in 2022-23, the future looked bleak for offshore wind. But the outlook has changed significantly in recent months—and a legitimate buildout of this promising resource is finally under way.
We focus on the impact that just four projects will have on the grid in New England, but the results of our analysis are transferable to the sector at large. Similar projects feeding into the New York grid and the sprawling PJM system also will play a significant role in facilitating the transition away from fossil fuel generation.
And while developments along the Pacific Coast are just getting started, they are moving forward. In early April, the California grid operator proposed a $6.1 billion transmission expansion plan that it said would enable 4,700MW of offshore wind to connect to the state grid. And earlier this year, the U.S. Department of the Interior identified two areas for potential leasing off the Oregon coast that could support as much as 2,400MW of capacity.
It has taken years to get to this point, but the industry now looks poised for solid growth.
The U.S. offshore wind industry is firmly back on track after the turmoil—driven by rising interest rates, supply chain problems and parts inflation—that roiled the nascent sector in 2022-23.
The nation’s first large-scale project, the 132MW South Fork Wind facility off eastern Long Island, N.Y., has entered full commercial operation. A second, much-larger project, the 806MW Vineyard Wind 1 project off the southern Massachusetts coast, began sending power to the New England grid in January and is scheduled for full commercial operation by the end of 2024. The two wind farms are just the beginning of a significant buildout of offshore capacity due online in the coming years. Projects with an estimated capacity of 7,876MW are now in operation, under construction or in advanced development, and all are likely to be commercially operational by 2030. An additional 14,668MW of capacity are in earlier stages of development.
The projects are being built all along the Atlantic coast, but to illustrate their impact, IEEFA analyzed four projects expected to begin commercial operation by 2029 in New England. The four are:
Vineyard Wind (806MW, 62 turbines), owned by Avangrid and Copenhagen Infrastructure Partners, and expected to be completed this year.
Revolution Wind (704MW, 88 turbines), owned by Ørsted and Global Infrastructure Partners. Onshore work is already under way with offshore construction slated to begin this year and commercial operation expected in 2025.
New England Wind 1 (791MW) and 2 (1,080MW), owned by Avangrid; formerly known as Park City Wind and Commonwealth Wind. If revised contracts win approval from Connecticut, Rhode Island and Massachusetts, construction could begin in 2025, with completion slated for 2029.
We focused on the winter impact of this 3,381MW of new capacity because the region is expected to become a winter peaking system in the early 2030s and because winter is the time of year when gas-fired power capacity is most at risk due to competition from home heating needs. We used performance data from the Block Island Offshore Wind farm to calculate the expected winter capacity factor of the new projects. The facility, which has been operating since 2016 with five 6MW turbines and an operating capacity of 29.3MW, has recorded a winter capacity factor of 52.6% during the months between November and March from 2017-24. Capacity factor measures the amount of power produced by a generation facility compared to the amount it could produce at full output.
We used the 52.6% winter capacity factor for our calculations even though it likely is conservative—the much larger turbines (as much as 15MW each) being used at the four new projects will be taller, tap into higher wind speeds, and probably be more efficient, all of which could raise their capacity factors. Still, using 52.6%, the projected winter generation of these projects comes to 42,682 megawatt-hours (MWh) per day. How meaningful is that much power? It is equivalent to 16.2% of New England’s average daily winter generation in 2019-24—an enormous influx of electricity that should significantly reduce the region’s reliance on gas.
The four projects are just the beginning of the offshore wind buildout, but highlight the impact this generation is going to have along the Atlantic coast. In New York, for example, Ørsted, the world’s largest offshore wind developer, received final environmental approval in March from the federal government for the 924MW Sunrise Wind project off eastern Long Island; it will be built just south of the operational South Fork project that is also owned by Ørsted. The company expects to begin construction on Sunrise Wind this year and have the project in operation in 2026. Another project, Equinor’s 810MW Empire Wind 1, secured federal approval in February to begin construction in an area starting 20 miles south of central Long Island. Onshore work is slated to begin this year with commercial operation projected in 2026.
Further south, Dominion Energy has begun construction on the 2,600MW Coastal Virginia Offshore Wind project, which will be the largest in the U.S. and one of the largest in the world. The company began offshore construction work in February and expects the wind farm to begin commercial operations in 2026.
Large as these numbers are, it is just the beginning of a major buildout of offshore wind capacity on both coasts, with significant environmental and reliability benefits for the U.S. electric sector.
Graphics by IEEFA Energy Data Analyst Seth Feaster
News from Around the Energy Transition
Solar Tops Coal in Texas
For the first time, solar generation topped coal in the Electric Reliability Council of Texas (ERCOT) grid in March, supplying more than 10% of the system's electricity. The March numbers, which also saw coal-fired generation fall below 10% of ERCOT output, point to the rapid, ongoing transition in the formerly fossil fuel-dominated system.
National Coal Generation Slumps
Coal’s share of national electricity generation failed to top 15% on any day in March, accounting for an average of 12.6% of daily demand in the month. Coal generation fell to a record low of 11.2% on March 29.
