UPDATE: May 6, 2022: The Bureau of Ocean Energy Management announced on Thursday the completion of its environmental review of potential offshore wind leasing activities in northern California, finding no significant impact of offshore wind development in the Humboldt wind leasing area. Leases within the Humboldt area could bring 1.6 GW of floating offshore wind energy to the grid.

“The completion of this Environmental Assessment represents an important step forward for ensuring that any future renewable energy development – should a lease sale occur – is done in a responsible manner,” Amanda Lefton, BOEM director, said in a statement.

On Thursday, BOEM also announced a 10-day extension for public comment on its draft environmental assessment of Morro Bay wind energy area, which could bring up to 3 GW of clean energy to the grid if developed.  BOEM will receive public comments on the Morro Bay assessment through May 16.

Dive Brief:

• The Biden administration on Tuesday announced an effort with California to develop areas on the Western Outer Continental Shelf to bring up to 4.6 GW of floating offshore wind online.
• The Department of the Interior, the Department of Energy and the Department of Defense announced the agreement with the state of California, as part of the administration’s goal to deploy 30 GW of total offshore wind in the U.S. by 2030. The Interior Department will hold a meeting on June 24 to discuss the West Coast areas identified as potential sites and conduct an environmental analysis for a lease sale auction targeted for mid-2022.
• Due to the deep waters in the Western Outer Continental Shelf, West Coast offshore wind projects will require floating turbines, which the National Renewable Energy Laboratory (NREL) has defined as a pre-commercial technology with opportunities to lower cost as turbine models get bigger. GE Renewable Energy announced on Tuesday its participation in a $4 million project with the Department of Energy's Advanced Research Projects Agency-Energy (ARPA-E) to design and develop advanced controls to support a 12 MW floating offshore wind turbine.

Dive Insight:

Floating offshore turbines are a newer, more expensive technology.

NREL published a report in October identifying the levelized cost of energy for 1 GW of floating wind across five California study areas, ranging from $95/MWh to $114/MWh for 2019 declining to $53/MWh to $64/MWh by 2032.

This is comparable to estimates for fixed-bottom base turbines, which NREL reported as ranging in global projects between $50/MWh to $75/MWh in 2032. More than 7 GW of floating turbines are in the planning and permitting phases of development globally, with the first commercial-scale projects expected to be operational in 2024, NREL said in the report summary.

The offshore wind industry has expressed interest in the development of floating turbine technology in the last few years. The demand for offshore wind in California is a decade old, Gov. Gavin Newsom, D, said during a press call.

"We ... also in anticipation of this announcement, have put tens of millions of dollars in our budget to accelerate the environmental review process, to focus on our design build efforts, and to focusing our engineering efforts, upgrade our ports, to focus on our capacity, on transmission and distribution," Newsom said.

The Morro Bay area represents 399 square miles off the central coast region, which the Interior Department said would support about 3 GW of floating offshore wind. In 2019, the Interior Department’s Bureau of Ocean Energy Management (BOEM) announced 14 applications from companies expressing interest for offshore wind development in the area of ocean outside of Morro Bay. Also off the central coast, 11 companies have expressed interest in developing offshore wind in a BOEM call area nearby Diablo Canyon, the nuclear plant that the state is working replace with clean energy. 

"[T]he Central Coast of Morro Bay is really the visionary opportunity of this transition away from nuclear, and looking at the 2,500 MW that are Diablo Nuclear Plant," Newsom said.

California had recently released proposals to regulators to address the procurement of 11.5 GW of resources between 2023 and 2026, to replace Diablo Canyon and retiring fossil fuel assets.

The second area tapped for offshore wind development is close to the Oregon border off of Humboldt County, and the Interior Department estimates it would support about 1.6 GW of development. The Humboldt call area received 10 applications from potential developers, BOEM reported in 2019.

While the West Coast markets for offshore wind are behind the East Coast in terms of supply chain development, but could take advantage of the lessons learned in the Northeast, according to Ross Gould, vice president of supply chain development with the Business Network for Offshore Wind.

By collaborating with other states on the West Coast, Gould said California can leverage strengths and accelerate the growth of the supply chain.

Utilities can be "an excellent partner" in the development for offshore wind, given their unique local knowledge, Gould said, referencing the involvement of National Grid and Eversource in joint ventures to develop offshore wind in the Northeast.

However, the supply chains of the two coasts cannot be easily compared as the West Coast "will require the still developing floating turbine technology, which gives the U.S. the opportunity to drive global offshore wind technology and innovation into the next generation," Gould said.

Federal funding has specifically been allocated to advance offshore wind in deeper waters, such as the West Coast, as "quietly, over the past several years, over $100 million in DOE research and development has gone into advancing the floating turbine technology," Gina McCarthy, White House national climate advisor, said during a press call.

The Biden administration's offshore wind deployment goal also contributes to a goal to decarbonize the electricity sector by 2035.

As part of the floating wind R&D, ARPA-E has a fleet of projects focused on offshore wind, including with GE.

"While we continue to focus on fixed bottom platforms for our Haliade-X offshore turbines during the near term - including for all our existing contracts - we are also taking steps to position ourselves to serve the market for floating wind over the mid to long term as it evolves," a GE Renewable Energy spokesperson said over email.