US offshore jobs will localise more quickly than in UK: Orsted

The offshore wind supply chain will localise in the US more quickly than it has in the UK, the world’s leading market, predicts Orsted’s head of US procurement.

“At our large-scale projects in the UK, we’re getting close to contracting half locally,” Anne Grethe Jeppesen said Thursday at an industry conference hosted by the Business Network for Offshore Wind.

“I believe the pace of contracting locally will happen much, much faster in the US,” Jeppesen said.

Although the UK is the world’s largest offshore wind market, it still relies on components from manufacturing hubs in places like Denmark and Germany, thanks to early investments made in the supply chain in those countries.

The ocean-wide distance between US offshore wind projects and the industry’s major manufacturing hubs in Europe presents a challenge for the American market in its early years. But it also means the supply chain will out of necessity move swiftly to set up shop in the US, even if nacelle factories are still years away.

As the offshore wind industry has matured, “we’ve found out how much proximity means”, Jeppesen says. “Proximity to where we’re actually building an offshore wind farm has such a huge impact on our total cost.”

With gigawatts of offshore projects now in motion off the US East Coast, multiple state procurements currently underway, and more development zones soon to be put to auction by the federal government, the industry is grappling with a problem that few saw coming: a potential shortage of port and harbour infrastructure.

There is an emerging view among the industry’s leading players that rather than see the US market build up around a few big manufacturing and logistics hubs, like those in Europe, it will instead be forced to fan out more broadly – at least in its initial phase.

That’s partly the result of a lack of available quayside sites in the US. But it’s also due to the time crunch the US market faces as it gears up from standstill to industrial-scale installation by the early 2020s, says Joergen Scheel, vice president for North American offshore wind at Siemens Gamesa Renewable Energy.

“I see a more decentralised setup” taking root in the US, Scheel told the conference.

Today Siemens Gamesa operates a large manufacturing hub on the UK’s east coast, but « it took a couple of years just to make the internal investment decision » on that facility, he says.

Francesco Onorio, executive programme manager at US Wind, the developer owned by Italy’s Renexia that holds the rights to two offshore zones facing Maryland and New Jersey, believes three to four significant industrial hubs will emerge along the US East Coast over the next few years.

One already exists in New Bedford, Massachusetts, and another is emerging around Baltimore, Maryland to serve the mid-Atlantic region. Beyond that, there will be “one to two” more hubs established in New York and New Jersey, Onorio predicts.

While a dispersed supply chain may keep various states happy as they compete for jobs, some developers are concerned that a spread-out approach will make it harder to reduce costs.

“We really do worry that if we’re using different ports for every project, we’re never going to get the economies of scale we need to get costs down,” says Julie Bovey, director of external affairs for US offshore wind projects at Norway’s Equinor.

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