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The US offshore wind industry risks being left “dead in the water” if US authorities crack down on the use of foreign materials and equipment, according to the Spanish company which is jointly building the country’s first major project.
Bill White, head of offshore wind at Avangrid, which is part of Iberdrola, said stringent local content requirements could cripple the development of new offshore wind farms that so far rely on equipment made in France. Europe.
Congressional Democrats unveiled new green tax credits last week as part of a $ 3.5 billion infrastructure project that they hope will help clean up the electricity sector by triggering a boom in renewable energies, including offshore wind.
But the proposed legislation includes clauses linking certain tax credits to goals of job creation and the use of US steel – provisions that operators say could increase costs and slow construction.
“If you put the hammer in today and basically say, ‘You can’t build an offshore wind project unless you use a US-made wind turbine,” we are dead in the water, ”White said. , whose company joined with Copenhagen Infrastructure Partners to develop the Vineyard Wind project near Massachusetts.
“We need to think carefully about the potentially protectionist impulses that could inadvertently halt progress in offshore wind construction,” White said.
The Biden administration has said its plan to cut U.S. emissions will create “millions of new jobs” as a thriving clean energy economy emerges, with offshore wind alone spawning “new supply chains that extend to the heart of America ”.
After receiving final government approval, Vineyard developers are expected to secure funding imminently and begin construction in a few weeks. They say the 62 turbines in the project will generate 800 megawatts of electricity, enough to power 400,000 homes.
Tax breaks have helped the renewable energy industry gain a foothold in the United States for the past two decades. But the credits have had end dates, with Congress extending them at the last minute or even after they expired. The latest extension came in year-end spending and the Covid-19 relief plan was adopted in December.
Proposals currently before the Democratic-led Congress would include a 10-year extension of the currently available production tax credit for wind power and restarting a similar program for solar power, giving developers a time horizon of longer term planning.
But to take full advantage of some of the tax breaks on offer, developers would have to meet certain “going wages” and apprenticeship requirements. In some cases, at least 55% of the materials they used would have to be of domestic origin.
So far, only seven wind turbines have been installed in US waters. The United States lacks the supply grid to meet Biden’s target of 30,000 megawatts of offshore wind capacity by 2030, leaving developers dependent on manufacturers in Europe’s more mature offshore wind sector.
“For early projects, that’s the only way it’s going to happen,” said Jamie MacDonald, director of operations at Xodus Group, an energy consulting firm. “When people realize that these projects are coming to fruition. . . it will be the trigger for it to accelerate.
Some manufacturing facilities are under construction in the Northeastern United States, and the United States’ first offshore wind installation vessel is under construction in Texas.
But these will arrive too late for Vineyard Wind. The turbines for the project will be built in France by GE.
The US Department of Energy said in its latest Offshore Wind Market report that initial Atlantic Coast projects should “rely heavily on international supply chains for major components, marine vessels. ‘installation and engineering design work’.
White said the industry has already exceeded all expectations in cutting costs and a national supply chain will eventually thrive. But the industry needed time to develop.
“We are hearing loud and clear from Congress and States. But give us a window so we can show you we’re driving this location in the United States, ”he said. “Soviet central planning, I don’t think, has ever worked.”
