US offshore wind: transmission impossible?

With gigawatts of US offshore wind projects now in the pipeline, and political support from most states along the east coast, the biggest challenge facing the fast-growing sector might not be installing turbines, but actually getting the power to market.

“If the problem is not addressed, the market will technically be held back from providing the megawatt hours that policymakers have called for in the offshore wind goals they have set,” advocacy group Business Network for Offshore Wind said last year.

By the end of May, states from Maine to Virginia had committed to procure 29.2GW of offshore wind capacity — almost seven times the amount in 2017 — and look set to add more, with New Hampshire and North and South Carolina signalling interest as well. Hurricane-prone Florida and Georgia are the only east coast states not yet on board.

Even that number pales in comparison with at least 40GW of offshore wind additions that New England alone may need to help achieve an 80% decarbonisation goal by 2050, more than 1.5GW every year over the next three decades.

“We are nowhere near that kind of ramp-up,” says Johannes Pfeifenberger, a principal at consultancy The Brattle Group in Boston, adding, “To get there, we need infrastructure to get that power to load centres.”

Yet, public discussion about the unique set of economic, regulatory and technical challenges of interconnecting offshore wind has been limited. Instead, the focus has been mainly on federal permitting delays, and the intended economic and environmental benefits from offshore wind.

That partly reflects a remarkably successful lobbying effort by the fledgling industry to win policy support from states led mainly by US subsidiaries of European companies Copenhagen Infrastructure Partners, EDP, Equinor, Iberdrola, Ørsted and Shell.

In four short years, the sector has transitioned from a 30MW five-turbine pilot plant operating off Rhode Island to become a serious player in the energy mainstream — far faster acceptance than for renewables such as biofuels, geothermal, onshore wind and solar.

Offshore wind has captured the collective imagination more than any new commercial power technology since nuclear energy in the 1960s. In an era of global warming, turbines taller than the Statue of Liberty generating vast amounts of eco-friendly energy out of sight in the vast ocean have a singular appeal.

But the time is finally approaching for the industry and politicians to begin making good on promises that offshore wind can help accelerate the shift away from fossil fuels, and provide up to $70bn in supply chain investment and create tens of thousands of jobs this decade.

The long-awaited take-off will occur in December. After 16 months of additional studies, President Donald Trump’s administration is expected to permit the pioneering 800MW Vineyard Wind project south of Massachusetts. That move will unlock one of the world’s biggest offshore wind markets.

Offshore delivery challenge

As a new industry, offshore wind is starting from scratch and must build its own infrastructure in an ocean crowded with other users, while carefully protecting the marine environment under close federal and state supervision.

Initial projects will first collect electricity produced by turbines at a transformer substation and export it via individual high-voltage alternating-current (HVAC) subsea cables to landing sites with the closest access to the onshore grid.

Once there, the power will transition to underground or overhead transmission lines to locations where voltage is lowered with transformers for distribution to consumers.

While wind farms with 6.4GW of contracted off-take thus far — New England states (3.1GW), Maryland (368MW) New York (1.82GW) and New Jersey (1.1GW) — are relatively close to shore, subsea cable routing to the point of grid connection is rarely a straight line.

Routes need to be carefully planned and surveyed to avoid conflicts with other seabed users, while minimising exposure to man-made and natural hazards. All this adds length to cable-lay corridors.

The 880MW Sunrise Project, for example, will require a 120-mile (193km) cable to bring power from a zone facing Rhode Island and Massachusetts to Long Island, according to Stuart Nachmias, chief executive of ConEd Transmission, which is working with developer Bay State Wind, a joint venture between Ørsted and Eversource Energy.

Installing a single offshore cable from each project would appear the logical solution, but this approach is likely to lead to substantial grid upgrade needs onshore in the US Northeast. There are several reasons for this.

First, offshore wind areas under lease off New England are bunched together. So are those proposed for sale by the federal government south of Long Island and east of northern New Jersey. This was done after lengthy environmental review and stakeholder input. As they are built-out, cable routes will become constrained and not all projects will be able to access the limited number of onshore grid-connection points.

Second, the ageing transmission network on land was built around large centralised coal, fuel-oil and nuclear power plants. Electricity largely flows from the west to load centres near the Atlantic Ocean.

At the grid’s coastal extremities, most existing substations cannot accept large amounts of power from the ocean and transmission lines there are not generally designed to then transfer electricity back to loads.

“In New York, there really needs to be a comprehensive assessment of existing transmission networks to support the 9GW in offshore wind goals,” says Brian Gemmell, vice-president of transmission asset management and planning at National Grid US, which owns utilities there and in Massachusetts and Rhode Island.

On top of this, offshore developers are financially responsible for upgrades to onshore electrical infrastructure associated with their projects under rules set by grid operators ISO New England, New York Independent System Operator (NYISO) and PJM Interconnection that includes coastal states from New Jersey to North Carolina.

Projects at sea must compete with those onshore for available grid capability and obtain injection rights through queues. This process was designed decades ago for generator connections to existing networks, not their expansion for public policy reasons such as offshore wind procurement mandates.

While early estimates vary, offshore developers may face billions of dollars in potential cost exposure. One study suggests already contracted projects connecting to Cape Cod in Massachusetts may require up to $787m in onshore transmission upgrades to avoid system overloads.

On Long Island, where typical daily demand is around 2.5GW, the grid can only take so much power from multiple arrays offshore.

“At some point, if all the wind connects to Long Island, the amount of wind being produced may outstrip the demand. The power has to go somewhere and is the onshore Long Island grid robust enough to move that power to other parts of the state?” asks Nachmias.

“Then, the question will be, if it’s not, what is the cost of upgrading as compared to perhaps bringing the power directly in to the New York City grid?”

Power line projects in land-constrained New England also have a history of community opposition and rejections by siting officials and even when allowed to advance, they often suffer delays and cost overruns. All this adds risk for offshore investors.

“When there is an offshore wind procurement under the current process, at the time developers have to put in their bid there is still a lot of uncertainty about what those onshore upgrade costs will turn out to be,” says Walter Graf, a grid expert at The Brattle Group.

“You can imagine the more risk there is, no rational investor would say, ‘We have to increase our bid to cover the downside risk’.”

Worse-case scenario

In a worst-case scenario, if those upgrade costs spin out of control for the developer, it may place the entire project in jeopardy. On the flip side, if costs are less than budgeted, consumers end up overpaying because they are paying for a higher than necessary offshore wind bid and power price.

The last thing elected officials want is for global investors to sour on their states because of uncertainties with interconnection, or that expensive grid upgrades both undermine what has been a decline in generation costs for offshore projects and by extension, support for the sector from ratepayers.

Several northeastern states are giving the issue attention. New York, for example, passed legislation in April requiring NYISO to conduct a study that will identify necessary bulk transmission investments and distribution and local transmission upgrades to support its 2030 target for 70% renewable electricity generation and 100% emission-free power in 2040.

The broader question is whether states and the grid operators can collaborate with inter-regional planning on offshore power delivery and grid integration.

The track record has not been good with onshore transmission in recent decades.