Offshore wind capacity in the United States is expected to increase at a CAGR of 66.4 percent between 2021 to 2035 to reach 52.5 GW.
Offshore wind generation in the United States is expected to increase at a CAGR of 64.6 percent between 2021 to 2035 to reach 179.4 TWh.
In 2035, offshore wind power will account for 2.4 percent of the country’s cumulative capacity and 3.4 percent of its total annual generation, says GlobalData.
Factors such as complex regulations, lack of consistent and substantial federal support and high costs have hindered the growth of offshore wind in the US. Offshore wind has several advantages over other forms of renewable energy.
The cumulative installed capacity in the US power market is expected to achieve a CAGR of more than 3 percent during 2022-2035.
In March 2021, the US government announced a goal of adding 30 GW of offshore wind capacity by 2030 and 25 GW of onshore wind capacity by 2025.
To achieve this goal, the US Loan Programs Office (LPO) is set to provide $3 billion in funding through the Innovative Energy Loan Guarantee Program. The US Department of Energy announced $8 million for 15 new offshore wind R&D programs.
The government aims to expand clean energy deployment on public lands and offshore waters. Funding will support the planning and permitting of solar, wind, and geothermal energy projects, and associated transmission infrastructure. This will help meet the goal of deploying 30 GW of offshore wind capacity by 2030 and 25 GW of onshore wind power by 2025.
Offshore wind was introduced to the US capacity mix in 2016 and in 2021 its cumulative capacity stood at 0.04 GW. Annual generation was recorded at 0.2 TWh.
The introduction of Inflation Reduction Act (IRA) in August 2022, which extended Investment Tax Credit and Production Tax Credit, is a major boost for the renewable power market. The federal and state level targets for offshore wind, along with the technology specific auctions, present opportunities during the forecast period.
In September 2022, the US government introduced the Floating Offshore Wind Shot program under the existing Earthshot Program. The floating offshore wind program aims to cut costs of floating technologies by more than 70 percent to $45/MWh by 2035.
The government also introduced a floating offshore wind specific target of achieving 15 GW capacity by 2035. This is based on the existing target of achieving 30 GW offshore wind capacity by 2030. All these factors bode well for the offshore wind market in the US, Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, said.