Lead Session Chair:
Stephan Barth, Managing Director, ForWind - Center for Wind Energy Research, Germany
Stephanie McClellan (1) F P
(1) Special Initiative on Offshore Wind, Newark, United States of America
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Presenter's biographyBiographies are supplied directly by presenters at OFFSHORE 2015 and are published here unedited
Before serving as Director of the SIOW, McClellan previously served as Director of Strategic Initiatives and Outreach for the Google-backed Atlantic Wind Connection (AWC). She took a lead role in the offshore wind industry after immersion in the field as Policy Director for Delaware Governor Jack A. Markell. In that position she witnessed firsthand the struggles and disappointments of a state that is willing but not able to capitalize on its abundant wind energy resources. Her diverse portfolio has made her a proven leader in offshore wind, setting strategic direction and developing international, national, and regional collaborations.
Providing a plausible roadmap to cost-competitive u.s. offshore wind: application of european cost reduction in a mid-atlantic state
The United States offshore wind industry is picking up speed and momentum. To continue forward movement, state decision-makers will need to see offshore wind's benefits to the state but also a plausible pathway to cost competitiveness for offshore wind projects. This paper presents the findings of a first-of-a-kind analysis that provides a framework for understanding the likely cost trajectory for a state U.S.'s Mid-Atlantic region by financial close 2020 and for what states can do to maximize cost reduction.
Three levels of cost reduction were analyzed: 1) the potential impacts of anticipated reductions from 2020 - 2025; 2) U.S. learning effects during the same period; and 3) state-specific interventions that can reduce costs. We 1) modeled the cost of energy off the coast of a Mid-Atlantic state using cost data for technology expected to be commercially available by FID 2020 and between FID 2020 and FID 2023; 2) applied learning rates from the literature, to an assumed (conservative) buildout of offshore wind in the U.S. by 2025, and 3) developed a set of interventions that a single state could take that could reduce the cost of offshore wind energy.
Main body of abstract
The study finds that the LCOE for projects off of the coast of a Mid-Atlantic state are likely to be roughly 20% lower for projects having financial close in 2020 than they would be if installed today, if global technological innovation, increased global technology in the OSW supply chain, and industry-wide efficiencies driven by European market demand materialize as anticipated. U.S. states can further benefit from their own cost reduction strategies -- those that are inherently local. The analyses demonstrate that state-level actions can lower LCOE and have significant if not quantifiable impacts. Combined, the actions were find to have a potential combined impact of up to 35% for later-stage offshore wind projects. The study did not included any consideration of U.S. Federal incentives such as PTC, ITC or carbon credits.
Decision-makers in U.S. states have been presented with OSW costs for one-off projects and pilot projects, blurring the picture of what is possible. Our findings suggest when viewed in the context of global cost reduction efforts, supply chain efficiencies and global market development, the picture is quite different. U.S. states can viably take approaches to pre-development, infrastructure and policy that are shown to be effective at reducing costs in Europe, and reduce costs even further. Unlocking the U.S. market depends on such a plausible pathway to cost reduction and on clear roadmaps for state level action.
Participants will learn what the anticipated impact of the current efforts of the collective industry can be on unlocking key markets in the U.S. Second, the participants will learn the importance and applicability of some European policy practices to the U.S., an their impact on unlocking markets.