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New Study: Scaling Up U.S. Offshore Wind Will Lower Per-Unit Costs Dramatically

3 min. read

offshore windWhen we talk about the benefits of "scaling green," in large part we're referring to the fundamental concept of "economies of scale" -- "the cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output." This concept is broadly applicable, and is extremely important for the rapidly-growing, technologically-advancing clean energy sector.

In the case of offshore wind power, a new study by the University of Delaware explains how "a commitment by Massachusetts to develop offshore wind (OSW) energy at a scale of 2,000 MW, combined with ongoing technology and industry advances, will lower previously projected costs for the clean energy source by as much as 55 percent in the next decade." Reducing costs by that degree will, in turn, "put offshore wind on a clear path to deliver clean power at competitive prices for millions of ratepayers in the Boston area and beyond, and make the renewable resource a key contributor to the state's clean energy future."

Why is this so important? Because, as the University of Delaware explains in a press release, the potential for offshore wind power in the U.S. is huge -- yet untapped to date.

Wind power has expanded rapidly on land in the U.S. – exceeding 75 GW of installed capacity and now competing on cost with all energy sources in the center of the country. But the U.S. has lagged in offshore wind power, with its first demonstration-size project beginning only last summer off Rhode Island. The U.S. potential, however, remains tremendous. The study notes that in the U.S. Northeast, offshore wind is "a clean energy resource many times larger than on-land wind or rooftop solar," and has the "potential to supply all electricity used by those coastal states."

To date, what's held back U.S. offshore wind, even as onshore wind has boomed, largely has been offshore wind's relatively high cost. Which is why scaling up offshore wind power, and reducing the per-unit cost in the process, is so important. As Bloomberg explains in its story on this new study, scaling will allow offshore wind power developers to "gradually drive down costs as they gain experience, install transmission lines, upgrade infrastructure and utilize increasingly efficient components." Bloomberg adds:

While offshore wind has thrived in Europe, the high costs of erecting turbines at sea has sunk most U.S. projects. Developers previously proposed wind farms off the East Coast with rates as high as 24 cents a kilowatt hour, more than double the market rate. The University of Delaware found that they could cut those costs to 12.8 cents a kilowatt-hour by 2026, and to 10.8 cents by 2029, when the industry may have installed as much as 2,000 megawatts.

But why go offshore at all, given that onshore wind is doing so well?  As the Bureau of Ocean Energy Management explains, a major advantage is that offshore winds "tend to blow harder and more uniformly than on land." This, in turn, can make a huge difference in power production:

The potential energy produced from wind is directly proportional to the cube of the wind speed. As a result, increased wind speeds of only a few miles per hour can produce a significantly larger amount of electricity. For instance, a turbine at a site with an average wind speed of 16 mph would produce 50% more electricity than at a site with the same turbine and average wind speeds of 14 mph. This is one reason that developers are interested in pursuing offshore wind energy resources.

Another advantage to putting wind turbines off the U.S. east coast is that "53% of the nation’s population lives in coastal areas, where energy costs and demands are high and land-based renewable energy resources are often limited." Thus, "offshore wind resources have the potential to supply immense quantities of renewable energy to major U.S. coastal cities, such as New York City and Boston."

All in all, offshore wind power offers enormous potential for clean energy scaling in the United States. Now, the main thing is to start scaling up the industry so that per-unit costs can start coming down -- just as this new study by the University of Delaware finds.

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Topics: Clean Economy