Offshore wind is cost effective
Offshore wind power is becoming increasingly affordable, with costs falling dramatically in recent years. DONG Energy set out to reduce the cost of electricity from its European projects by 40% by 2020 compared to projects built in 2012.
The 40% reduction target was met ahead of time with DONG Energy's recent winning bid for a project in the Netherlands that reached a 50% reduction in costs compared to 2012 - three years ahead of time and across an aggregate volume of 10 to 15GW.
The company is on track to reduce costs even further and in the U.S this will be achieved as the offshore wind industry matures and scales up, which will lower cost overtime. In addition, the anticipated technology improvements resulting in larger turbines will also lower the cost of offshore wind energy through the next decade.
Other cost benefits are predicted as well:
A recent study by the Massachusetts Clean Energy Partnership found that together, expanded hydro and wind power could save Massachusetts homes and businesses more than $170 million annually by lowering wholesale energy costs.
According to a recent study by the University of Delaware's Special Initiative on Offshore Wind, economies of scale and technological improvements will drive the cost of offshore wind energy down by 55% in the next ten years or so.
There are no ongoing fuel costs - like other technologies have. Therefore, the price of offshore wind power will not be subject to the recent spikes seen with other power sources.
Offshore wind can create a supply chain - and all the economic benefits that go with it
With legislation in place and at least three different developers potentially entering the offshore wind market, there is a real opportunity to create economies of scale around offshore wind and reap the economic benefits of a new supply chain.
As seen in Europe, the creation of a viable supply chain for offshore wind can create jobs and serve as an engine of economic growth. For example, Denmark's "first mover" status resulted in Siemens Wind Power constructing the world's largest wind turbine research and related production facility in Brande, Denmark, along with also establishing wind turbine blade production facilities in Aalborg and Engesvang, providing jobs for a total of more than 5,200 people. Numerous industrial and service businesses have also been established in Denmark to serve the offshore wind industry.
Already, we are seeing seeds of economic development in Massachusetts. In August of 2016, the New Bedford Marine Commerce Terminal - the first facility in the nation designed to support offshore wind projects - supported the mobilization of the research vessel, The RV Ocean Researcher.
In addition to port developments, a supply chain would include manufacturing facilities which would bring jobs and economic benefit to the area in which they operate. Bay State Wind is committed to working actively and constructively with local businesses as well as the Commonwealth's elected officials and community groups to help build out the necessary supply chain for this growing industry.
Offshore wind creates jobs
It has been estimated that one-third of the potential offshore wind resources of the U.S. are located on the East Coast, and several other Northeast states are exploring the potential opportunity. During construction, a typical DONG Energy European offshore wind project creates around 1,000 jobs. Approximately 100 jobs are created to support the 25 year or more operational life of an offshore wind farm. In total, the European offshore wind sector employed 75,000 people in 2014.
There are more than 500,000 people currently employed in renewable energy in the U.S., according to a 2016 report from the Department of Energy. That includes nearly 80,000 in wind generation, which is among the fastest-growing renewable industries. The offshore wind industry can help continue that growth as renewables become a bigger part of our energy mix.
Offshore wind adds to New England's energy mix
With over 8,000 MW of power generation expected to go offline over the next several years, offshore wind can help fill that gap with a clean, renewable and cost-effective source of electricity. On top of that, offshore wind is reliable. DONG Energy has wind farms that produce power over 95% of the time and have average load factors of 45%and up to more than 50%, helping provide electricity at peak times when it's needed most. This compares to 26% for large-scale hydro, 23% for concentrated solar power and 11% for solar photovoltaics, according to a study conducted by Ernst & Young in 2014. We expect to produce even more power with new technological advances and better turbines – further increasing the reliability of offshore wind.