Latest announcements will bring economic development to coastal communities
Massachusetts and Maryland made headlines late this December as the two states announced the winning bids of their latest round of offshore wind procurements, totaling over 3.2 gigawatts (GW) of offshore wind capacity on the same record-setting day. In Massachusetts, Avangrid’s Commonwealth Wind Project and Ocean Winds/Shell’s Mayflower Wind were both selected as part of the Commonwealth’s third offshore wind solicitation. In Maryland, Ørsted’s Skipjack Wind 2 and US Wind’s Momentum Wind project were named the winning bidders of the state’s second round of offshore wind procurement. These projects will both provide significant economic benefits to the coastal communities that host them while making diversity, equity, and inclusion a major priority in hiring and supplier practices.
States use these procurement processes to decide which energy projects they will purchase power from once they are built. In 2021 alone, states on the East Coast have announced 8,434 megawatts (MW) of offshore wind procurement, surpassing the previous record of 7,044 MW that was procured in 2019. To date, over 17,510 MW of offshore wind capacity has now been procured. Mayflower Wind was awarded the right to sell 400 MW of offshore wind to Massachusetts’ three largest utilities. Mayflower Wind is being developed by Ocean Winds in a joint venture with Shell New Energies. Combined with its 804 MW award from the Commonwealth’s last solicitation, Mayflower Wind will now provide more than 1,200 MW of offshore wind capacity. The Mayflower award includes commitments to spend up to $42.3 million, including $27 million over 10 years to the SouthCoast Community Foundation which will support building the offshore wind supply chain, provide workforce training, and will make significant investments in local infrastructure while offering strong diversity, equity, and inclusion measures. This includes the establishment of a major operations center for its project on the Fall River, MA waterfront, helping to revitalize the area. Additionally, Mayflower Wind recently announced that it had signed an agreement with Gladding-Hearn to design and build a crew transfer vessel, one of the many vessels needed to build an offshore wind farm. Growing offshore wind in the U.S. wind will create numerous opportunities for the American maritime industry.
The Commonwealth Wind project will total 1,232 MW and will be New England’s largest project to date. It is estimated that the project will create 11,000 jobs during its construction and operation and generate enough electricity to power 750,000 homes. The project will also spur additional economic benefits across the state. To help construct Commonwealth Wind, the Prysmian Group plans to build a subsea transmission manufacturing facility at Brayton Point, the site of a former coal plant in Somerset, MA. This facility will be the first offshore wind manufacturing facility in the state. In addition, Crowley Marine, in a partnership with the City of Salem, MA, will redevelop 42 acres surrounding Salem Harbor Station to serve as an assembly and staging port for the Commonwealth Wind project as well as the Park City Wind project. The project is currently negotiating a Project Labor Agreement with local labor organizations and has committed $45 million towards initiatives for diversity, equity, and inclusion in workforce training and supply chain development as well as other community, environmental, and educational initiatives.
Ørsted’s 846 MW Skipjack Wind 2 project will power 250,000 Delmarva homes and will be constructed with the developer’s previously awarded Skipjack Wind 1 project (120 MW). The project is expected to come online in 2026. Along with a vast amount of clean energy, Skipjack Wind 2 brings a commitment from Hellenic Cables to construct the US’s first fully integrated subsea array cable manufacturing facility in Maryland and will facilitate the construction of an offshore wind tower manufacturing facility in the state. Skipjack Wind 2 will create thousands of jobs in manufacturing and operations and maintenance positions. In October, Ørsted established Maryland’s first offshore wind steel fabrication facility at Crystal Steel Fabricators in Federalsburg, MD to manufacture components for its offshore wind projects.
US Wind’s 808.5 MW Momentum Wind project will provide significant benefits to Maryland through the establishment of Sparrows Point Steel, the state’s first permanent offshore wind component factory, which will manufacture monopile foundations at the site of the historic Bethlehem Steel plant, once that largest steel production facility in the world. The facilitation of this $150 million investment at Sparrows Point will generate 500 full-time permanent jobs when the factory is at full capacity. Momentum Wind has also established a comprehensive program to develop local talent and is dedicated to building a supply chain of minority and small businesses. US Wind has made commitments to organized labor organizations for the construction of the projects and entered into a landmark agreement with the United Steelworkers to support the operations of Sparrows Point Steel. Both Momentum Wind and Skipjack Wind 2 have committed to using port facilities at Tradepoint Atlantic in the Baltimore region and sites in Ocean City, MD for marshaling and operations and maintenance activities.
The four December offshore wind awards come at the end of a very productive year for offshore wind energy procurement. In January 2021, New York announced Equinor’s Empire Wind 2 (1,260 MW) and Beacon Wind (1,230 MW), bringing that state’s total to 3,758 MW of offshore wind capacity procured to date. And in June, New Jersey awarded a total of 2,658 MW of offshore wind capacity to EDF/Shell’s Atlantic Shores Offshore Wind (1,510 MW) and Ørsted’s Ocean Wind II (1,148 MW). New Jersey now has over 3,750 MW of offshore wind capacity in the pipeline. These projects also include a number of commitments to the local supply chain and local workers.
To date, eight states have set procurement targets totaling near 40,000 MW, enough to power nearly 20 million homes. Since 2017, these states have procured over 17,500 MW, or roughly 44% of these targets. States will continue to be the main drivers of offshore wind procurement in the coming years as they seek to meet the important goals they have set. Together, these procurement targets will help meet the administration’s ambitious but achievable goal of 30 GW of installed capacity by 2030. At the same time, offshore wind procurement is proving to be an extremely valuable source of economic development that can revitalize coastal communities, bringing both good jobs and clean energy to the states that have made offshore wind a priority.
As this latest round of offshore wind procurement has shown, clean energy can revitalize American manufacturing and create good-paying jobs for a diverse group of Americans. ACP and its member companies are excited about the future and the amazing potential created by the groundwork laid in this record-breaking year.
Author:
Brendan CaseyManager, Research & Analytics[email protected]
