Jun 11, 2020 - Energy & Environment

Amid pandemic, smoother sailing for America’s nascent offshore wind industry

The stars in the U.S. flag replaced by offshore wind turbines

Illustration: Lazaro Gamio/Axios

Massive offshore wind farms planned for America’s East Coast are poised to move ahead after the Trump administration inched closer this week to approving the first full-scale project.

Why it matters: The Interior Department has been slow to review the project, signaling regulatory trouble for the nascent sector. Then the pandemic hit, increasing the likelihood of a broad delay.

Where it stands: The Bureau of Ocean Energy Management, an agency at the Interior Department, on Tuesday released a lengthy environmental assessment of the project, planned for Massachusetts, called Vineyard Wind.

  • The Interior Department initially was only reviewing the impact of Vineyard Wind. But then, as other project proposals came in, the agency decided to broaden the scope and examine their cumulative effect on fisheries.
  • The project is backed by Avangrid, Inc., a U.S.-based subsidiary of Spanish energy firm Iberdrola and Copenhagen Infrastructure Partners, a Danish investment firm.
  • The agency says it will make a final decision whether to approve the project by mid-December and said more information will be forthcoming when Axios reached out for a comment Wednesday.

The big picture: Offshore wind, much like its onshore counterpart more than a decade ago, is at a growth stage where it’s poised to offer a jobs boom as it grows rapidly from virtually nothing. In the next five years, the sector could create between roughly 20,000 and 45,000 jobs, according to a wind industry report earlier this year.

One level deeper: Offshore wind is also key to combating climate change, specifically helping New England and mid-Atlantic states meet their aggressive goals to cut emissions.

What they’re saying: A few factors suggest smoother sailing for this specific deal and others compared to the past year, according to ClearView Energy Partners, an independent research firm.

  • Approving this project (and possibly future projects) fits into the administration’s recent focus on infrastructure as a way to stimulate the economy amid the pandemic.
  • The additional review increases the likelihood that this project will withstand probable legal challenges, providing a template for future ones.
  • The Interior Department could incorporate that broader analysis into environmental reviews of future offshore wind farms, making those processes smoother and quicker.

Yes, but: Politics and the pandemic could slow things down.

  • President Trump strongly dislikes wind, though for now it appears the Interior Department is progressing without direct input from Trump one way or the other.
  • Consultancy Wood Mackenzie has cut its 2023 forecast for U.S. offshore wind installations by 50% between the first and second quarter of this year.
  • That said, “we’re not projecting any project abandonment as a result of the coronavirus, just delays,” says Dan Shreve, the firm’s global head of wind energy research.

The bottom line: “While President Donald Trump has occasionally criticized offshore wind, we think approving the project would align with the President’s ‘energy dominance’ agenda,” ClearView wrote in its Wednesday report.

Go deeper: Troubles lurk for America's booming offshore wind boom

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