U.S. Wind Power Market
The offshore wind market in the U.S. is on the cusp of rapid expansion as a number of states seek to attract developers to their waters following the approval of the Cape Wind Project in May 2010 and the clarification of the permitting process for federal water projects in April 2009 (whereby permitting authority was awarded to the U.S. Interior Department’s Minerals Management Service (MMS)). Baryonyx is placed to gain a first mover advantage in this marketplace through the experience of project delivery of the management team. Given the specialist knowledge and high capital costs of development and construction, the early movers in the industry should obtain a strong competitive advantage protected by high barriers to entry.
U.S. offshore wind resources offer a vast, untapped source of renewable energy potential. Wind energy has been the world’s fastest growing source of electricity during the past decade, with over 20% annual growth, and more than 121 GW installed globally. (Source: U.S. Offshore wind energy: a path forward). As a result of the clarification in the permitting process, a number of states (particularly those on the Eastern seaboard) have issued requests for proposals for construction of offshore wind facilities, and initiated comprehensive ocean planning frameworks. Additionally, a number of states are offering direct financial incentives to developers in order to investigate the offshore wind power potential. Offshore wind is particularly attractive in the U.S. as the proposed sites are located in relatively close proximity to the country’s largest centers of electricity consumption.
In 2008 the United States surpassed Germany to become the global leader in installed wind capacity, followed by Spain, India and China. U.S. wind capacity grew by a record 5,250 MW in 2007, and 8,545 MW in 2008. This represented 42% of all new capacity for generating electricity in the country. (Source: AWEA Wind Power Outlook 2009). Recently released figures for the year to 31 December 2009 from AWEA show an additional 9,922 MW installed in 2009 taking the total installed wind capacity in the U.S. to 35,159 MW.
With its abundant open space, excellent wind resource and relatively straightforward consenting process, Texas has the greatest installed capacity of any state. However, there are still significant levels of untapped resources, primarily in the north of the state where the paucity of suitable grid connection has hampered development, and offshore in the Gulf of Mexico. The scenario for onshore wind in Texas is expected to improve in the short to medium term with significant investment in a high capacity transmission infrastructure to transport power from areas with excellent wind resource to the population centers through the creation of Competitive Renewable Energy Zones (C.R.E.Z.) within the State.
A study by the U.S. Department of Energy 20% Wind Energy by 2030 found that onshore wind power has the technical potential to provide more than 8,000GW of renewable electricity. The study showed that expanding wind power from providing around 1% in 2007 to 20% in 2030 is feasible, and would not affect the reliability of the nation’s power supply. Achieving that target would require developing nearly 300,000 MW of new wind capacity (equivalent to an additional 16GW of installed capacity annually), including 50,000 MW of offshore wind capacity.