Oct 1, 2020 - Energy & Environment

Scoop: Despite delays, offshore wind firm makes key investment

wind turbines in a field with red dollar signs on the ground
Illustration: Lazaro Gamio/Axios

America’s nascent offshore wind industry is getting a boost with news Thursday that should make it easier to support the sector's massive infrastructure.

Driving the news: Denmark-based Ørsted, the world’s leading offshore wind developer, has inked a multi-million-dollar deal with a U.S. shipbuilder to construct the sector’s first ship that's compliant with a law controlling shipping goods in U.S. waters.

The big picture: The investment, whose specific amount remains undisclosed, comes in the face of increasing headwinds for the sector.

  • The Interior Department, which has authority over projects in federal waters, has been slow in its review process of both individual projects and the cumulative impact of several farms.
  • President Trump personally dislikes wind and recently included future offshore wind leases in a ban initially focused on oil and natural gas drilling off some coastal states along the southeast.

Where it stands: Ørsted and its joint venture partner Eversource Energy, a Northeastern electric utility, are announcing Thursday they're entering into contract with Edison Chouest Offshore, a Louisiana-based marine transportation company, to build what’s considered the industry’s first ship compliant with the Jones Act.

  • The ship deal indicates Ørsted’s optimism that its numerous U.S. projects will eventually come to fruition despite review delays.
  • “However, a full scale build-out of the domestic supply chain and the jobs and investment that would be created, remain on the sidelines until there’s more federal permitting certainty,” Thomas Brostrøm, CEO of Ørsted North America, Offshore, said.

How it works: The Jones Act is a century-old federal law that requires goods shipped between U.S. ports to be transported on ships that are built in the U.S., (mostly) owned by U.S. companies and operated by U.S. citizens.

  • The offshore wind industry, much like the offshore oil industry, requires special ships to construct and maintain infrastructure.
  • Since America is just beginning its offshore wind sector, companies building the first ones are often using ships and equipment from Europe, whose industry is far more developed.
  • Companies have had to shuffle people and equipment — moving from one ship to another and then back — to comply with the Jones Act.
  • This particular ship will be used to house workers, operate and maintain wind farms.

Why it matters: Making ships compliant with the Jones Act is widely considered an essential step in growing the industry in the U.S. Other companies will be able to use the ship, according to Ørsted spokesperson Lauren Burm.

The intrigue: The ship resembles a mini cruise liner and will be more than 260 feet long (a little shorter than the Statue of Liberty). It will be built at Edison Chouset’s shipyards in Florida, Mississippi and Louisiana using 300 new construction jobs, according to Ørsted.

What they’re saying: The numerous offshore wind projects in the pipeline up and down the East Coast will all “require an incredible array of vessels, resources, knowledge, and capital commitment to install, operate, and repair,” said Gary Chouest, president of Edison Chouest.

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