Wind

US Forged Rings to invest $700m in tower maker for burgeoning Northeast offshore wind

Outlay bolsters confidence in demand following tumultuous 2023 that saw projects cancelled and supply chain put in limbo

. USFR steel forging plant.
. USFR steel forging plant.Foto: USFR

Canadian pipe maker Canadoil has formed a new venture, US Forged Rings (USFR), as a vehicle for a $700m investment in a tower manufacturing facility and steel forging plant to feed the growing Northeast offshore wind sector, “filling a critical supply chain gap”, the company said.

The investment “was spurred by our confidence in the medium and long-term prospects of the US market, which is in its early phases of development and needs a local supply chain to rely on,” said Giacomo Sozzi, president of USFR.

The facility will be developed in collaboration with Nucor, North America’s largest steel producer, and Ellwood Quality Steels, the continent’s leading ingot caster, to produce towers made from 100% American steel.

“These facilities will enable US developers and OEMs to have predictable costs and a reliable supply of vital components,” Sozzi added.

USFR is currently assessing several sites in the Northeast for the facilities, which will have an initial yearly output of 100 fully coated towers and the potential to raise that to 200 towers if needed.
President Joe Biden’s administration is targeting 30GW of offshore wind capacity installed in US waters by 2030, but this goal is largely considered by research consultancies to be out of reach as the nation contends with skyrocketing costs caused by global inflation and interest rate hikes that have left most contracted capacity either cancelled or seeking offtake renegotiations.

Supply chain turmoil

The abrupt departure of formerly leading developer in the US market Orsted from most of its capacity has voided millions of dollars in supply chain contracts, including German steel fabricator EEW’s monopile plant in Paulsboro, New Jersey.
The monopile factory had been contracted to supply foundations for Orsted’s 2.25GW Ocean Wind 1 & 2 before the projects were yanked. It is now slated for another $164m in investment through the states recently awarded round 3 projects.
USFR spokesperson Slavko Zurovac told Recharge that the tower making facilities will “not rely on any developer linked project”.

“We firmly believe that at this nascent stage of the industry a major supply chain investment can’t be linked to or rely on one project or one state’s needs,” he said.

With competing state incentives “fragmenting supply chain investments”, Zurovac said the facilities will be able to serve all three global turbine OEMs, GE, Siemens Gamesa, and Vestas, and “fulfill the needs for the overall market”.

The new steel forging facility will produce large flanges up to 40 feet (12 metres) in diameter, “making it the largest ring rolling facility in North America and Europe”, the company said.

The facility will also produce forged components required in other heavy industries including nuclear energy, construction, shipping, and mining.

Philip Totaro, CEO of research consultancy IntelStor, said the two facilities could be a boon for the onshore wind sector as well.

“The US suffers from a lack of availability of casting/forging and rolling equipment to make parts for onshore turbines above 4MW,” he told Recharge, adding that hubs and other components need to be imported from Europe.

Tax credits included in the Inflation Reduction Act could incentivise demand for domestically-produced towers.

“A company having this manufacturing capability could fill a void for companies who are domesticating or seeking to domesticate onshore or offshore turbine production in the US to take advantage” of manufacturing tax credits, Totaro said.

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Published 7 February 2024, 18:50Updated 14 February 2024, 15:10
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