A Case for Regional Collaboration among States in the New Offshore Wind Economy

In 2022, US state governments increased their collective procurements of offshore wind power to over 8,100 MW. While these collective procurement targets have the potential to transform electricity generation in the US, states have so far come to these targets and approached offshore wind development more generally, on an individual basis. To fully realize the potential of offshore wind in the United States, states can leverage their significant power and influence over offshore wind policy and work together to promote offshore wind development at a regional level. While states have begun a handful of collaborative efforts thus far, three areas ripe for collaboration have emerged: transmission, supply chains, and equity.

Regional collaboration between offshore wind states has the power to decrease consumer electricity costs, build and strengthen the domestic offshore wind supply chain, and ensure that offshore wind development benefits historically disadvantaged communities, including communities hosting the development. As a starting point, US states can look to Europe for models of governments working together towards a common vision of abundant offshore wind power. The following post will examine early examples of regional collaboration in the US, as well as efforts underway in Europe that could be adapted in the US.

Transmission

Regional collaboration on offshore wind transmission is far superior to an every-state-for-itself approach. While it would require significant upfront investment, inter-state collaboration would create considerably cheaper outcomes for state governments, developers, and ratepayers in the long term. Coordinated offshore wind transmission planning includes many things, from consolidating onshore interconnection points or pre-building dedicated offshore wind interconnection infrastructure to connecting multiple projects together to form an offshore energy grid. All of these options would require significant multiple states to collaborate to achieve three important outcomes: decreasing the number of costly on-land transmission upgrades, creating offshore grid infrastructure unlikely to be damaged during storms and accidents, and reducing disruption of onshore ecosystems when building new substations.

Regional transmission collaboration is already happening in Europe—several nations bordering the highly congested North Sea are developing so-called “joint projects” that connect two or more nations’ grids together.

Image Source: Roland Berger (link)

While these projects are often the result of bilateral cooperation between nations, the European Commission has created a forum for all of its member-states to make joint projects easier to develop in the future. The North Seas Energy Cooperation (NSEC)—organized by several European nations including Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway, Sweden, and the European Commission—dedicates a Support Group to developing joint and hybrid projects, which combine offshore wind generation and major transmission infrastructure to facilitate power sharing between national grids. The Support Group’s priorities include creating a regulatory framework for such projects and distributing the costs and benefits of the projects. Other European collaborations, including the Esbjerg Declaration and Baltic Market Interconnection Plan, include the development of joint and hybrid offshore energy projects in their long-term offshore wind development strategies.

States on the East and West coasts could create similar frameworks for collaboration, and there is already a promising plan in New England. A recent concept paper put out by a group of five New England states called the New England States Transmission Initiative (NESTI) is investigating how Connecticut, Massachusetts, Maine, New Hampshire, and Rhode Island can work together to build an integrated modular transmission infrastructure to help interconnect new offshore wind power. Recently, the NESTI states, along with New York and New Jersey, sent a letter to the U.S. Department of Energy (DOE) asking for funding and technical support to create a “Northeast States Collaborative on Interregional Transmission.” New York has also taken individual steps to ensure that future offshore wind projects off its coasts could connect to a regional offshore grid. New York’s 2022 OREC solicitation requires that projects be “meshed ready” in order to be better integrated into New York’s independent system operator (NYISO)’s market or neighboring markets in New England or New Jersey (ISO-NE and PJM). Meshed-ready projects are built the technical capability to connect to future offshore electric substations that would form the basis for a future “meshed network,” which would link multiple projects together via alternating current lines in order to minimize the number of land-based interconnection points. Mid-Atlantic states could consider taking similar steps to “future-proof” offshore wind projects off their coasts and lay the foundation for future collaboration. Other areas of collaboration include setting technical standards for transmission equipment, streamlined permitting for transmission, and wholesale power market governance. Two EU-funded research projects, PROMOTioN and InterOPERA, have tackled technical standards and policy and regulatory frameworks for a meshed high voltage direct current grid.

Supply Chain

Developing a robust offshore wind supply chain has the potential to create tens of thousands of good-paying jobs and pour billions of dollars into state and regional economies. Offshore wind states are well aware of this potential, and they have dedicated considerable effort to attract industry to their shores. Collaboration to develop regional supply chains could help states in the long run by preventing the expensive duplication of supply chain infrastructure, leading to the more efficient and cost-effective siting of ports, manufacturing, and fabrication.

Two efforts are underway along the East Coast to address this problem. New York, New Jersey, and the Bureau of Ocean Energy Management (BOEM) signed a memorandum of understanding (MOU) in 2019 to “enhance[e] our domestic supply chain to support the orderly and expeditious development of a robust offshore wind industry.” New York, New Jersey, and BOEM now meet quarterly to discuss progress, obstacles, and further opportunities to collaborate towards creating a regional supply chain. Farther south, Maryland, Virginia, and North Carolina have signed their own MOU called SMART-POWER, to “cooperatively promote, develop, and expand offshore wind energy generation and the accompanying industry supply chain and workforce.” Similar to the NY-NJ-BOEM agreement, SMART-POWER members meet quarterly to discuss issues related to supply chain, regulations, regional assets, regional promotion, and best practices in offshore wind development. These efforts, in concert with dedicated federal initiatives, offer a platform for states to build supply chains collaboratively instead of competitively.

WindEurope Offshore Wind Supply Chain Map. View the interactive map here: https://windeurope.org/about-wind/campaigns/local-impact-global-leadership/

State collaboration on supply chains could benefit more than just coastal states. European leaders have discovered that a strong offshore wind industry can benefit inland nations as well. In Europe, the offshore wind technology industry stretches into landlocked European nations like Austria, the Czech Republic, and the inland regions of larger coastal nations like Spain, France, Germany, and Poland. Although these nations and regions cannot participate in the commissioning or maintenance of offshore wind projects, they crucially host the manufacturing of turbine components and related industries. Already, some inland US states are lending their industrial capacity to offshore wind projects. The nation’s first dedicated wind turbine installation vessel (WTIV) is under construction in Sturgeon Bay, Wisconsin, and American steel manufacturer Nucor is producing recycled heavy gauge steel plates specifically designed for offshore wind in Brandenburg, Kentucky. Many other inland states could provide their existing industries to the manufacture and fabrication of critical offshore wind components, spreading the benefits of offshore wind across the country.

Equity

While offshore wind development promises to bring considerable investment and economic growth to coastal states, there must be guardrails and regulation in place to ensure that vulnerable and disadvantaged communities, including low-income communities, communities of color, and Tribal communities benefit as well. States could consider collaborating to create broad, multi-state standards for increased community and stakeholder participation, generous community benefit agreements, strong labor protections, and inclusive workforce development programs across their regions.

The NY-NJ-BOEM MOU is a good starting point. In their MOU, “BOEM, New York, and New Jersey agree to coordinate in order to meet mutual regional offshore wind energy goals and objectives related to […] benefitting underserved, disadvantaged, and overburdened communities.” They also agree to publish a set of best practices for identifying underserved communities, defining mitigation measures, utilizing existing regional coordination efforts, and promoting accountability for developers. Although many states are including equity provisions in their own offshore wind policies, there are no common standards across state lines.

Without collaboration on equity, developers may use the lax equity standards in one state as leverage to secure new projects with fewer protections and benefits for vulnerable and disadvantaged communities. To avoid this, states along both coasts could work together to set a common standard for protecting and including underserved communities in the offshore wind economy by ensuring favorable project labor agreements, community benefits agreements, and true community participation in the development process. Without such standards, offshore wind development may end up perpetuating the damage that fossil energy development has done to vulnerable and disadvantaged communities.

Conclusion

States governments have significant power to set policy in transmission, supply chain development, and equity. This allows states to respond to their communities, experiment with policies, and set priorities that can directly benefit their residents. While the federal government has increased investment, speeding up offshore wind energy area leases and coordinating supply chain initiatives, it may not always support offshore wind development with the same vigor. It is therefore up to states to work together to create a stable and long-term environment supportive of offshore wind development while creating jobs, protecting communities, and reducing emissions.

This blog post was originally published in Windpower Engineering & Development.