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www.sea-technology.com September 2015 / st 73 crease in the EU's dependence on the supply of natural gas from Russia; pro- jected job creation and economic ben- efts from developing ancillary services and supply infrastructure; the supply of power from offshore wind farms direct- ly into high-load pockets in coastal cit- ies; reduction in the need to operate the highest-cost sources of energy genera- tion; and nonnuclear/noncarbon-based power generation at the scale needed for the EU to meet its carbon reduction mandates. Why is the U.S. offshore wind mar- ket so far behind the EU? Most of the same intrinsic factors are in play in both markets—but a government policy mandate is lacking in the U.S. The lack of a direct mandate to promote offshore wind places the risk of starting a new industry solely on the backs of U.S. de- velopers, investors, contractors, states, and utilities. These parties must work together to adopt, adapt and incorpo- rate the technology advancements and lessons learned from Europe so as to make U.S. offshore wind a competitive energy source. In addition, to be successful the U.S. offshore wind industry must promote the unique intrinsic benefts of offshore wind (e.g., price suppression, reduced need for onshore transmission, job cre- ation), all of which are diffcult to quan- tify in a traditional least-cost energy generation analysis. Most importantly, the U.S. needs to achieve economies of scale by develop- ing large projects that will help reduce costs. Importing turbines from France for the BIWF is a costly necessity due to the lack of a U.S. alternative. A U.S. supply chain of services, infrastructure and components is only justifable with large-scale projects that will provide suffcient revenue opportunities for sup- ply chain participants to make the re- quired investment. Unlike the EU, the U.S. is not criti- cally dependent on Russian natural gas supplies, but reducing the U.S. con- sumption of fossil fuels by increasing renewable power generation will help keep our domestic fuel prices low by diversifying our energy sources—mak- ing our industries more competitive and reducing long-term energy costs. ST sources was awarded a grant to develop a two-turbine, 12-MW project using an innovative twisted jacket support struc- ture. Principal Power was awarded a grant to develop a fve-turbine, 30-MW foating offshore wind farm in Coos Bay, Oregon. Fishermen's Energy was award- ed a grant to develop a 5-MW project offshore Atlantic City, New Jersey. The Deepwater BIWF is progressing well, but the larger projects in U.S. fed- eral waters are all trying to "trim their sails" to make progress. The EU is a much different story. According to the European Wind En- ergy Association (EWEA), as of Febru- ary 2015, the EU offshore wind industry had grown to 2,488 offshore turbines in 74 wind farms, providing more than 8,000 MW in 11 European countries. There are also 12 projects under con- struction that will bring the cumula- tive offshore wind capacity to almost 11,000 MW. Ernst & Young has estimated that the levelized cost of electricity from off- shore wind in the EU will decrease from €140/MWh in 2013 to €90/MWh by 2030, due to continued improvements in design, construction and operations; further development of the supply chain and service infrastructure; and technol- ogy advancements. The most signifcant driver of this growth is the "20-20-20" Renewable Energy Directive, which sets out the commitments of EU member states to achieve renewable targets that will result in total EU energy demand to be met 20 percent by renewables by 2020. The National Renewable Energy Ac- tion Plans from EU member states pro- vide a stable regulatory and economic framework in which the private sec- tor is willing to invest capital in large offshore wind projects to achieve EU policy objectives. In turn, large projects provide the economies of scale neces- sary to lower costs through technology advancement and a build out of the EU- based supply chain. The 20-20-20 Renewable Energy Directive was developed based on the intrinsic benefts of offshore wind and other renewable energy sources that are hard to quantify in traditional economic models. These benefts include: a de- Brian Redmond is a partner in Paragon Energy Holdings and is an expert in the development, fnanc- ing and management of renewable and conventional energy projects. Redmond is on the boards of Deepwater Wind LLC, Noble Environmen- tal Power and the Virginia Offshore Wind Development Authority. He has an M.B.A. from Harvard, an M.S.M.E. from Georgia Tech, and a B.S.M.E. from Virginia Tech. D eepwater Wind of Providence, Rhode Island, is on schedule to complete the frst offshore wind project in the U.S., the Block Island Wind Farm (BIWF), a 30-MW project off the coast of Rhode Island. On the auspicious date of July 4, barges carrying the frst two of fve undersea turbine support structures left the fabrication yards of Houma, Louisiana, for the 16-day voyage up the East Coast. Deepwater is now install- ing the support structures anchored in 90 ft. of water and will install the wind turbines next summer, to be supplied by Alstom from France. The BIWF will demonstrate the feasibility of offshore wind in the U.S., and will help reduce the cost of developing larger offshore projects. The BIWF is a bright spot in the de- velopment of the U.S. offshore wind in- dustry as the Cape Wind Project in Mas- sachusetts, which was to be the nation's frst offshore wind farm, is teetering on the edge of termination after a 14-year saga of lawsuits and regulatory hurdles. Large-scale offshore wind projects in the U.S. are still very much in the de- velopment stage. The U.S. Department of Interior (DOI) has issued large leases off the coasts of Rhode Island, Massa- chusetts, Virginia, and Maryland for the installation of large-scale offshore wind farms. The winning bidders are now en- gaged in site analysis and planning ac- tivities, and are seeking to secure sourc- es of revenue for their wind projects. In addition to the federal leasing process, the U.S. Department of Energy (DOE) has provided a $47 million grant to each of three offshore wind dem- onstration projects incorporating new cost-saving technology. Dominion Re- soap box Offshore Wind Markets: US vs. EU—Brian Redmond