A 2018 offshore wind summary (because what will happen in 2019 depends on what happened last year)

Before we leap into 2019, it is worth – after a truly amazing few months – looking back at all the US offshore wind industry has achieved in 2018. It has been a staggering year in which the sector has transformed itself from a relatively small niche player to a billion-dollar business with what is now a clearly demonstrated ability to transform the nation’s energy landscape.

Here are some highlights starting in late 2017;

Dec 2017. Massachusetts bids close. The Bay State closed to bidders for an offtake agreement for up to 800 megawatts (MW) of offshore wind capacity. Three bids were submitted, ranging in size from 400 to 800 MW and including innovative battery storage initiatives. This process was of particular significance since it represented the first commercial-scale offshore wind tender ever in North America. Prior to it, the largest tender had been for the 30 MW Block Island demonstration project off Rhode Island.

Jan 2018. New York releases Offshore Wind Masterplan for 2,400 MW by 2030. The Empire State released their comprehensive ‘New York State Offshore Wind Master Plan‘, which will guide the responsible and cost-effective development of 2,400 MW of offshore wind by 2030, enough to power up to 1.2 million homes with clean energy.

Governor Murphy signs offshore wind executive order in January.

Jan 2018. New Jersey Governor hits the ground running with nation’s largest offshore wind targets. The Garden State’s new Governor campaigned on a promise of introducing the largest offshore wind target in the country. In January, after less than one month in office, Governor Murphy delivered in spades when he signed an executive order that committed New Jersey to 3,500 MW of offshore wind by 2030. This is far ahead of the country’s previous record holder: New York’s 2,400 MW – also by 2030.

Apr 2018. Massachusetts eyes two new lease areas. Secretary Zinke announced that two new lease blocks in Federal waters offshore Massachusetts – with the potential to host an additional 3,000 MW – would be auctioned later on in the year.

May 2018. Massachusetts and Rhode Island notch up 1,200 MW of lease awards in one day. The results of the 800 MW tender which had closed in December 2017, were announced. A massive 1,200 MW of capacity was awarded to two developers: 800 MW to Vineyard Wind offshore Martha’s Vineyard, Massachusetts and 400 MW to Deepwater Wind offshore Rhode Island. A huge amount considering the 30 MW Block Island project off Rhode Island was previously the country’s largest.

Jun 2018. Connecticut awards 200 MW to Deepwater. A few weeks later Connecticut awarded a further 200 MW to Deepwater which took the year to date total to 1,400 MW.

Aug 2018. Vineyard’s Massachusetts project delivers at a stunning $65 per MWh. It wasn’t publicly available when the award was announced in June, and the price was only released a couple of months later as part of the state’s proposal assessment process. The amount, 6.5 cents per kilowatt hour or $65 per megawatt hour (MWh) surprised everyone. To understand the significance: consider that average Massachusetts ‘Industrial’ power prices in 2017 were $134.8/MWh or that average ‘Residential’ prices were $189.2 (table 5.6B of this EIA report). Or consider that the Block Island project, commissioned at the end of 2016 and the nation’s only operating offshore project, is delivering power at a cost of $244/MWh.

Oct 2018. Ørsted acquires Deepwater for $510-million. A number of people were thinking Ørsted was sure to win the Massachusetts tender in May. So when they emerged with nothing, many assumed the company had retired to lick their wounds. Quite the opposite. Instead they announced an audacious and entirely unexpected acquisition of US-based Deepwater – hitherto one of its most outspoken rivals – for $510-mn.  Although this was a relatively large sum compared to the amounts the industry had been used to, it actually proved to be quite the bargain – as would be revealed in December with the lease auctions off Massachusetts: more on that below.

Oct 2018. BOEM wants to hear from potential developers off California. 2018 saw a series of announcements which spoke to the increasingly attractive economics of floating offshore wind energy. In March, Trident Winds announced plans for an 800 MW development off California. A couple of months later, Jose Zayas – the Director of Wind Energy Technologies at the Department of Energy – forecast that deep water floating wind would have the same cost as fixed by 2030.  In September MHI Vestas announced it had secured a firm contract with WindFloat Atlantic to supply three turbines to a floating project off Portugal and the following month Shell partnered with Denmark’s Henrik Stiesdal on a floating project off Norway. Towards the end of the year, the Bureau of Ocean Energy Management (BOEM) requested information from any companies interested in developing projects in three lease areas of California.

Schematic showing the three lease blocks offshore Massachusetts (0520, 0521 & 0522).

Dec 2018. Massachusetts auction brings in record $405-million. With all the activity through the year, it was expected that the auction of these three lease blocks off Massachusetts would attract a good sum of money. But the amounts paid far exceeded expectations. The auctions actually dragged on in to the second day and, when they concluded and the dust had settled, it emerged that the three lease blocks had attracted an astounding $405-million. It is interesting to compare this with the previous record price paid for an offshore lease: $42-million paid by Norway’s Equinor for a lease off New York in mid 2017.

The Federal waters off Massachusetts now have more offshore wind lease blocks (five) with a greater potential wind capacity (9,000 MW), than any other state.The next highest is New Jersey with two lease blocks with a total theoretical potential of 4,200 MW.


In a year of superlatives, it is hard to say what was the biggest news – but our vote goes to Vineyard’s stunning price of $65 per megawatt hour. The reason being that offshore wind will only succeed if it is cost competitive and the Vineyard project shows – beyond a shadow of a doubt – that it is.

A close runner-up is the dramatic improvements in the economics of floating offshore wind. It may not have received much media attention, but the implications will nonetheless be significant. This development has opened up huge new areas to offshore wind energy and, in the US at least, it means California – previously not a player because of very deep waters close inshore – is now entering the market in a big way.

These signals have been noted on both coasts and herald a dynamic 2019.  Offshore wind will move into the mainstream of the energy mix debate. The coming year is going to be another big one with a record 1,900 MW of Power Purchase Agreements being awarded in New York and New Jersey and possibly another 400 MW from Rhode Island. In addition keep eye out for the announcement, and possible auction, of additional lease blocks off New York. Out West – California is the one to watch. The last year in particular has seen dramatic improvements in the economics of floating offshore wind. Combine that with increasing interest in the Golden State in finding innovative ways to minimize GHG emissions + moves from the Bureau of Ocean Energy Management to delineate lease areas for offshore wind, and the stage is finally set for significant offshore action in the Pacific.

Hold on to your hats!