Heavy support needed to meet offshore wind production target

Partnerships hold the key to circumnavigating Jones Act restrictions

Collaborative solutions to accelerate offshore wind production will take centre stage in 2024, as the US looks to ramp up development to meet aggressive renewable energy targets. Although plans are well underway to construct offshore wind farms on the US outer continental shelf (USOCS), the Jones Act and an absence of US flagged Jones Act compliant wind turbine installation vessels (WTIV) are impeding progress. 

The Jones Act’s application is undoubtedly an obstacle to the desired accelerated development and future investment in US offshore wind. Currently, there is only one Jones Act compliant WTIV being constructed in the US, far short of the number needed to meet the current Administration’s goal of 30 GW by 2030. Conversions of oil and gas industry vessels are underway as traditional energy providers invest heavily in renewable energy. Developers are also exploring the possibility of sharing resources to minimize costs and maximise use of vessels – a concept we expect to gain momentum in 2024.

However, these efforts most likely will not be enough, and we expect developers to look outside of the US for support. Given that the Jones Act allows vessels to be 25% owned by foreign interests, we foresee joint ventures between US and foreign developers multiplying in the coming year. And while the Jones Act prohibits foreign-flagged vessels from using US ports as a base for the construction of offshore wind farms, we anticipate that nearby foreign ports will be considered as a base to marshal and deploy foreign vessels and resources to the USOCS.  

While these collaborations pose challenges to project profitability, arguably the biggest threat is doing nothing at all, subjecting construction efforts to the arduous requirements of the Jones Act with scarce compliant resources available to nurture the growth of the relatively nascent US offshore wind industry. A helping hand is needed to meet key construction and operations deadlines. For that reason, we expect alternative partnership options to be heavily explored and adopted if the US is to meet its 2030 offshore wind production goal.