A key to Biden's lagging target on wind energy will come after the election

The United States produces less than 1% of the wind energy it plans to generate in 2030. But a huge boat that promises to bring change is 89% completed. And when he's done next year, the real race to catch up will begin.

The ship, named the Charybdis after a mythological Greek sea monster, won't set sail until next year, possibly after one of the most pro-green energy administrations in history leaves the White House. And as Eric Hines, director of Tufts University's offshore wind energy graduate program, puts it, “We'll need about five of these installation vessels within a few years.”

The Biden administration wants the U.S. to generate 30,000 megawatts of wind energy within the next five and a half years. Last year, that figure was just 42 megawatts, putting the country far behind Europe, which added 18,300 megawatts of new wind energy capacity by 2023 alone. according to WindEurope.

The construction of massive offshore wind turbines has faced headwinds in recent years, from supply chain issues to higher interest rates. But the U.S. faces an additional logistical puzzle from a 100-year-old maritime law that, along with those other factors, has contributed to project delays and even cancellations.

The outcome of the November election is unlikely to affect Charybdis, whose operator plans to take advantage of green energy tax breaks in the Inflation Reduction Act. But the prospect of a new government that is much less enthusiastic about renewables could hinder additional projects.

Republican presidential candidate Donald Trump claimed at a rally in New Jersey in May that offshore wind facilities are harming whales, saying, “We're going to make sure this ends on day one. I'm going to put it in an executive order.” “There are no known links between large whale deaths and continued offshore wind activities,” it said National Oceanic and Atmospheric Administration said.)

The first major parts of the boat were recorded in 2020which kicks off a $625 million project between Dominion Energy and Seatrium AmFELS, which is building the massive ship at its shipyard in Brownsville, Texas. With more than 30,000 tons and 58,000 square feet of deck space, the Charybdis can carry 12 blades at a time, each 357 feet long and 60 tons in weight.

Just as important as the technical specifications, the boat will also be able to meet the requirements of the Jones Act, a 1920 merchant shipping law that requires cargo shipped from one point to another within the U.S. to be transported by a U.S. ship. And until now, no U.S. ship has been able to transport wind turbine components directly from shore to installation sites miles offshore.

Charybdis' first project is Dominion's offshore wind farm under development 15 miles east of Virginia Beach. Once completed, the 176 turbines are expected to provide 2,600 megawatts of energy, enough to power more than 900,000 homes. But to install the first two pilot turbines, it had to get the parts ready in Canada to comply with the Jones Act, which meant long travel times and associated costs.

“Obviously you don't want to install a project that big,” said Mark Mitchell, the senior vice president of Dominion Energy who oversees the Coastal Virginia Offshore Wind project — which at $9.8 billion is currently the largest and most expensive in the country. .

Instead, Charybdis will be able to pick up components from shore, sail to the wind farm, and plant itself in the ocean floor using four 30-story legs that will turn the ship into a construction platform. Then, using a crane with a boom longer than twenty large vehicles, it will be positioned bumper to bumper and begin assembling the turbines.

Upon completion of the Virginia project, the vessel will be available for contracts for other offshore wind projects along the nation's coastline. Mitchell hopes the Charybdis can do more than complete wind farms already in the works, but inspire developers and planners to propose new ones as well.

“It's a bit of a chicken and egg thing. If we start securing the projects, then others can step up to do infrastructure like this,” Mitchell said, adding that state and federal incentives “will be passed directly to our customers.”

But in other cases, federal subsidies haven’t been enough to tide over rising costs. One big reason: the Federal Reserve, which raised interest rates 11 times between March 2022 and July 2023, the fastest pace of rate hikes since the early 1980s.

Higher interest rates make it more expensive to finance large construction projects such as wind farms.

“The cost of construction is very high,” Hines said. “If you imagine the time that someone is building a project, you're not making any money on the project. And so money that you're borrowing that time to build the project, there's a premium on that money, and the lower the interest rates, the better.”

Last year, the Danish company Orsted canceled two projects off the coast of New Jersey due to “difficult” conditions.

“Macroeconomic factors have changed dramatically in a short period of time, with high inflation, rising interest rates and supply chain bottlenecks impacting our long-term investments,” Orsted says. said in October. Company paid the state $125 million to stop development.

The Biden administration recognizes the pressure of higher interest rates and points to IRA tax credits as a way to offset them.

“We know there are a number of different tools that will help us address some of these macroeconomic challenges,” said Jeff Marootian, deputy secretary of the Office of Energy Efficiency and Renewable Energy.

He acknowledged that the Biden administration's goal of 30,000 megawatts of wind energy is “ambitious,” but pointed to projects in the pipeline as a sign of things to come. The Energy Department has counted almost $6 billion of investments in the development of offshore wind energy in recent years, including in 17 production locations and 15 ports.

“We need to continue to see these types of investments to achieve the president's goals,” Marootian said.