What it will take for the U.S.’s offshore wind industry to catch up to the U.K.’s.


In the United States, there is a type of farmer who has never turned a profit. This farmer’s industry has suffered from a rocky public perception and lack of federal subsidies. This underdog, is the American offshore wind farmer.


While the offshore wind industry has been slow to gain support in the U.S., it’s a different story in the United Kingdom. As part of their 2016 federal budget, the U.K. has allocated £730 million per year to subsidise emerging renewables, with offshore wind expected to be a main beneficiary. While this will give a major boost to their industry, the U.K. has the largest offshore wind industry in the world. With 10 GW of capacity projected to be installed by 2020, offshore wind will supply between 8-10% of the U.K.’s electricity annually. If American offshore wind farmers want a similarly generous federal commitment like the U.K.’s, they must first grow an industry worth investing in.


However, the U.K.’s offshore wind industry did not sprout up overnight. Like many European nations, they were early adopters of advanced wind technologies. Over the last fifteen years, the U.K. has built twenty-eight active offshore projects (compared to zero in the U.S.). While early projects have largely been privately funded, in recent years the industry had been unwilling to continue growing without the government offering more financial and regulatory security. Before the American industry can demand these kinds of assurances, it too must build a resume of privately funded, profitable small-scale projects.


Attempts at small-scale U.S. projects have, admittedly, hit public perception barriers; most notably, with the efforts to derail the Cape Wind project in Nantucket. However, the industry has adjusted to these barriers by vetting these early sites more carefully. Now, the first U.S. offshore wind farm is  being constructed in the waters of Block Island (which is currently powered by diesel generators), where both the economic and environmental benefits are undeniable. While the size of the project is relatively small, the significance of it is huge. Public perception will improve as the U.S. offshore industry grows and becomes worthy of large-scale attention from energy policymakers.


While the U.S. industry is some years behind its European counterparts, offshore wind is on a growing track. The developments of the Block Island project have helped to plant the seed that will further industry growth. The existence of markets such as the U.K.’s serve to expedite this process in two ways: European offshore projects can be used as examples for those weary of offshore technology, and the European markets will become a general industry blueprint for U.S. developers. While this is critical from a public perception and funding perspective, it will take more to ensure the success of these projects. As public attention grows, so will the pressure to profit. In order to grow the offshore wind industry, wind projects will need to be profitable and make return on their investments. Because with new advanced technologies, comes greater operational challenges. Energy producers will need to have strong investment management systems to help them identify risks, reduce inefficiencies and gain greater visibility into project development. In today’s market, this farmer will need to trade his hoe for a tractor to truly reap the fruits of his labour.