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The U.S. offshore wind industry currently has 42 megawatts (MW) of installed offshore wind capacity 1, but it needs to expand rapidly to achieve the Biden administration’s target of 30 gigawatts (GW) of offshore wind by 2030. Some states have announced their individual offshore wind targets accumulating to over 75 GW by 2045, and together they have already awarded over 17 GW of offtake agreements. The Block Island Wind Farm, the first offshore wind farm in the U.S., employed many domestic U.S. companies and leveraged the offshore experience in the Gulf of Mexico; however, in the next seven years, the U.S. offshore supply chain needs to adapt and grow to meet the 700-fold increase. This is a tremendous opportunity for the U.S. manufacturers, fabricators, ports, vessels, and workforce.
Achieving 30 GW by 2030 is an ambitious goal. One major hurdle is the development of a needed U.S. supply chain. The current global supply chain brings substantial benefits for optimizing costs and accessing state of the art technologies; however, disruptions affecting availability and price volatility are ongoing issues that have recently been exacerbated by the COVID-19 pandemic and the war in Ukraine. Regional and domestic supply chains counterbalance these issues and will attract significant investments and develop a specialized workforce in the U.S. Momentum in the industry is evident through new commitments from wind turbine and other Tier 1 suppliers to build manufacturing facilities domestically. Steep competition in the industry is pushing wind turbine suppliers to develop new products with nameplate capacity approaching 20 MW. Suppliers need to adapt and evolve rapidly creating the challenge of achieving economies of scale. In addition to wind turbines needing to scale-up, other components of offshore wind farms will also need to adapt including sub-structures and foundations, as well as fabrication facilities and installation vessels. These new domestic supplier facilities will need to forecast market trends to meet the demands of the offshore wind industry for years to come. A challenge with rapid product development is that suppliers have a limited track record of proven quality, safety, and long-term reliability. Due to the multidimensional nature of the supply chain, a moderate problem in the link could potentially lead to major project delays and cost risks. Even as the offshore wind supply chain develops in the U.S., it will remain a global industry with a large worldwide interdependency for materials, components, and sub-components. It is of paramount importance to develop and implement procurement and quality management programs. Investors and owners rely on third parties to gain confidence towards long-term investments through different certifications—component, type, and project. The objective of certifications is to independently assess the compliance of technical standards for different project phases including: design, manufacturing, transportation, installation, commissioning, and operation. Additionally strong quality assurance (QA) programs ensure suppliers achieve the project requirements and deadlines. A QA program would include supply chain strategic assessments, supplier qualifications (relevant ISO certifications), factory audits, and bankability audits. QA programs reduce risk in the supply chain earlier in project timelines. Another subset of quality management is quality control (QC). QC includes: inspection, manufacturing monitoring, production supervision, expediting, and factory acceptance audits (FATs). Implementing quality management programs will ensure quality and reduce risk to the offshore wind supply chain. The U.S. offshore wind industry has a great opportunity to bring clean, reliable energy to the U.S. shores, and we need to do everything we can to mitigate risks to reduce the levelized cost of energy (LCOE).
