Vestas Offshore’s European track record is a powerful argument in its support for the fledgling offshore market in the US and Canada.
North America’s first utility-scale offshore wind projects will not appear before 2014 at the earliest and more likely 2016, says Scott Keating, General Manager Sales, North America with Vestas Offshore.
The time lag compared to Europe is frustrating, Keating says – especially when part of the delay is down to unwillingness to learn from European success. US Interior Secretary Ken Salazar says that offshore wind technology is proven and reliable, yet some industry stakeholders feel they need to test the technology with projects involving just a handful of turbines.
Still, says Keating, Vestas is optimistic for the long-term future of offshore wind in the US and Canada. The pioneer project developers will need to choose their turbines soon, so on current projections he expects to see several significant orders within the 5 years. And the long-term potential is huge: the US plans 50 GW of offshore wind capacity out of a total of 250 GW from renewables.
The Vestas advantage
In the meantime, the Vestas Offshore philosophy is to alert politicians to the need for offshore wind, while convincing commercial stakeholders that experience is key to success. “The ‘dumb’ money is gone, and investors need to minimise their risks,” Keating says. “Our track record of offshore success in Europe is good news for developers.”
Vestas Offshore’s advantages include huge experience in project management, the quality of turbines such as the new V112–3.0 MW Offshore, and the resources of the Vestas Group as a whole. These combine to create business case certainty for customers – a valuable commodity for developers trying to create a new market in a difficult economy.
Roadshow results
In May, a Vestas Offshore “roadshow” in Toronto and New York helped convince both legislators and developers of the Vestas advantage. “We are the only turbine manufacturer with an offshore office in North America,” Keating says, “and in the medium term I think our support for the fledgling offshore industry will pay off.”
“I was very pleased with the feedback we got at the roadshow events,” he continues. “It’s clear that the Vestas brand is well recognised as an offshore leader in North America. To build on that success we plan on holding more similar events in the future.”
In the job for a year now, Keating is clearly not one to be dismayed by the need to take things one step at a time. “The biggest challenge in getting this business off the ground is finding the political will,” he says, “and at first I admit I was surprised by the amount of work that involves. As an example, the US permitting process involves 21 or 22 different Federal agencies.”
“But I’m sure we will get there in the end,” Keating concludes. “Once people are convinced of the need, in the US things can happen fast.”
Where it’s at in the US and Canada
The immediate future of North American offshore wind lies in three main areas of relatively shallow water: the Gulf of Mexico (Texas and Louisiana); the east coast from Virginia to Maine; and the Great Lakes, sometimes called the “Third Coast” of the US. The Pacific coast, with its deep water, is not suitable for current offshore turbine foundations.
Leading developers include Bluewater Wind, Deepwater Wind and Cape Wind on the east coast, and Trillium Power Wind in the Great Lakes.
Scott Keating is especially optimistic about prospects in the Great Lakes and Ontario. “This region may well lead the way for utility-scale offshore wind because it has a favourable political climate, excellent wind resources and some advanced projects,” he says.
Pros and cons
On the plus side, offshore wind in the US has broad political support at state level because of its potential to create jobs. Minuses include the poor state of the US economy, uncertainty whether the tax credit supporting renewable energy will be renewed beyond 2012, and the low and stable price of gas. “A cost of .18/kWh for offshore wind scares people accustomed to paying .06/kWh for their power,” says Scott Keating of Vestas Offshore.
A shake-up of the body responsible for licensing wind projects in Federal waters could also cause delays. In the wake of the Deepwater Horizon oil spill, US Interior Secretary Ken Salazar in June created the Bureau of Ocean Energy (BOEMRE) from the former Minerals Management Service (MMS). This is good news in the long term, says Keating, but right now it is making the bureaucracy worse.
Canada has the advantages of a stronger economy and a more straightforward approach to licensing of offshore wind projects, Keating says.
