Editor's note: This feature first appeared within the 2024 Offshore Wind Special Report and published within the July/August issue of Offshore magazine.
By Bruce Beaubouef, Managing Editor
The US offshore wind industry stands at a crossroads with regard to the supply chain and facility design, and decisions made now by state governments will play a key role in shaping the future structure and outlines of the marketplace. The cancellation of several projects that had been proposed off the Northeast coast have led some analysts to question the viability, or at least the potential future size, of the US offshore wind industry.
In response to this emerging crisis, DNV has issued a set of recommendations and a timeline to build a fully functional offshore HVDC transmission network to support US offshore wind power goals. Those recommendations and findings are outlined in a report entitled “2024 Offshore Transmission Technology Outlook,” which DNV developed in tandem with several developers and equipment manufacturers.
The offshore wind industry needs “near-term wins” to maintain support from the public, DNV commented in the report. It cited Ali Zaidi, National Climate Advisor to the White House, who observed that “the industry needs to execute now to reduce political risk.” For this reason, there is a short-term need to simplify project design to ensure the successful delivery of multiple projects, DNV says.
In the near-term, DNV is recommending that states focus on procuring 320 kV HVDC symmetric monopoles without AC or DC interlinks. This will reduce project risk due to the maturity of this technology and the larger number of vessels available to transport and install the offshore converter stations (relative to other design options).
According to the report, the rationale behind this recommendation is straightforward and stems from:
• In the near-term there are several barriers to the procurement of the 525 kV, 2,000 MW HVDC bipoles in the United States.
• US offshore wind projects are competing for supply of HVDC equipment in the global marketplace. HVDC equipment manufacturers may select projects based on certainty and simplicity. Adding complications to the design of the system, such as including a meshed network, reduces the attractiveness of projects to prospective suppliers.
• The AC mesh solution advanced by New Jersey (and by New York if developers elect to use a single offshore platform) results in heavier offshore substation platforms for which there are fewer capable installation vessels.
• The AC mesh solutions advanced by New York and New Jersey require additional engineering labor, which is the key bottleneck in the HVDC converter supply chain.
• Designing for future interlinks (whether AC or DC) is best done with knowledge of the project(s) to which one is interlinking; this information is not currently available to project developers.
The foremost recommendation from the report is for agencies, governor’s offices, developers, HVDC equipment manufacturers, and service providers to work together toward building an offshore transmission system that will unlock the full potential of offshore wind projects, meeting deadlines and budgetary constraints effectively.
Most imperative is an urgent need for states to focus on procuring 320 kV HVDC symmetric monopoles without AC or DC interlinks. DNV says that this strategy not only safeguards ongoing project success but also secures continued public backing for offshore wind development. By leveraging mature technology and a larger fleet of vessels for offshore converter station transportation and installation, DNV says that this approach minimizes risks, providing immediate benefits to existing and upcoming offshore wind projects while bolstering public trust in the industry.
The report also recommended a step-by-step build-up of infrastructure that takes into account the global HVDC equipment market and recent procurements and partnerships in Europe that are driving the market. The phased approach to procuring and installing an HVDC transmission network is intended to overcome current barriers and create a clear pathway to an offshore transmission network.
Besides DNV, participants in the joint industry report included executives with Atlantic Shores Offshore Wind; EDF Renewables; Equinor; GE Grid Solutions/GE Vernova; Hitachi Energy USA; and Offshore Wind Invenergy.
The report laid out short-, mid-, and long-term milestones for building a HVDC transmission network, starting with symmetric monopoles at 320kV, leading to a fully functional, 525 kV HVDC network with DC interlinks. Ultimately, the creation of a fully functional HVDC transmission network will maximize public benefits by increasing energy deliverability and enabling intra- and inter-regional power transfers.
“It is crucial to the success of the US offshore wind industry that state agencies and governor’s offices pay greater attention to market constraints and the evolution of offshore transmission technology,” said Richard S. Barnes, region president for Energy Systems North America at DNV. “The recommendations outlined by this consortium provide a clear pathway to a reliable, flexible, and cost-effective HVDC transmission grid which will enable states to achieve their offshore wind energy goals.”
Specific recommendations from the report included:
• Establishing a task force with industry and state participants to review the feasibility of AC mesh solutions given the significant supply chain constraints that have emerged since AC mesh solutions were first envisioned.
• Enabling the connection of 525 kV HVDC bipole circuits from the Northeast through the Mid-Atlantic.
• Investigating options to reduce the size and weight requirements of offshore platforms for 525 kV HVDC bipoles.
• Defining the planning, operational, and functional performance expectations for DC interlinks between 525 kV HVDC bipoles.
• Identify any points of interconnection and/or navigable channels that should be reserved for 525 kV HVDC bipoles.
The outlook report noted that the global offshore wind industry has evolved rapidly over the last few years. Global demand for offshore HVDC transmission equipment and resources now exceeds global supply. Consequently, designs that may have been possible three years ago (e.g., AC mesh solutions and 400 kV HVDC transmission) are no longer viable for the offshore market within the proposed timescales, DNV says.
Considering the above (and other factors), the signatories of the report are seeking to foster greater dialogue between the states and the offshore wind industry. The goals of this dialogue are to ensure:
1. Near-term deployment victories to ensure viability of the US offshore wind industry.
2. Development of cost-effective and highly capable offshore transmission networks.
Speaking more broadly, the report participants seek to raise awareness among state agencies and governor’s offices of critical issues facing the offshore transmission interlinks and networks.
The three goals of the report are to:
• Provide a technology outlook for the offshore transmission interlinks and networks that will maximize the public benefit from the development of offshore transmission infrastructure.
• Support the success of near-term projects that are critical for building public support for the offshore wind industry.
• Identify next steps needed at state and regional levels that would benefit from the support and/or direct involvement of state agencies and governor’s offices.
Recognizing market constraints
DNV says that it “is imperative to the success of the US offshore wind industry that state agencies and governor’s offices closely monitor and regularly assess market constraints and the evolution of offshore transmission technology.” The report notes that global demand for HVDC transmission converters, cables, and associated transportation and installation vessels has accelerated dramatically over the last few years. Demand now exceeds supply. Consequently, solicitation requirements from state agencies and installation timelines from Governor’s offices must carefully consider whether the solicitation requirements and installation timelines are aligned with (or divergent from) global market conditions. Undertaking this analysis is critical to the successful growth of the US offshore wind industry, DNV says.
To that end, DNV says that state agencies, governor’s offices, developers, equipment manufacturers, and service providers must work more closely together. It says that its offshore transmission technology outlook is a first step in that regard, and notes that the report was “heavily informed by market realities and insights from equipment manufacturers.”
Technology outlook
The report placed its recommended steps in the context of a near-term, mid-term, and long-term outlook.
In the near term, defined as the next 5-8 years, the report indicated that offshore transmission networks should predominantly use 320 kV HVDC symmetric monopoles without AC or DC interlinks.
In the mid-term, defined as the next 8-12 years, the report suggests that 525 kV HVDC bipoles with DC interlinks (likely intra-regional) will become the predominant offshore transmission technology as a direct result of the large number of such projects that are being procured by TenneT and others in Europe.
However, the deployment of 525 kV HVDC bipoles in the United States will require addressing several barriers which prevent their use, including:
• Most severe single contingency (MSSC) requirements
• Availability of suitable installation vessels and transportation barges, especially considering the Jones Act
• Large size and weight of the 525 kV platform design developed in Europe.
DNV says that the participants in the report “feel confident” that these barriers can be overcome quickly and that 525 kV HVDC bipoles with DC interlinks can be delivered by the mid-2030s.
In the long term, defined as beyond the next 12 years, DNV says that progress on HVDC circuit breakers and multi-vendor interoperability should remove the technical barriers to the creation of a fully functional offshore HVDC transmission network. In 2023, key European market participants made a clear commitment to the use of HVDC circuit breaker technology, DNV noted. Six different projects have initiated early engineering studies and HVDC converter manufacturers have made strategic acquisitions and partnerships. DNV says that the first HVDC circuit breakers should be deployed in Europe by the early to mid-2030s, and that “rapid adoption could occur as soon as the mid-2030s.”
Regulatory barriers
Addressing regulatory and business model barriers will also be critical to maximizing the value of offshore wind investments, DNV says. Key barriers include: the development of an appropriate FERC cost allocation methodology; the application of NERC reliability standards to offshore transmission networks; the resolution of who will own and operate a given offshore transmission network; and the creation of new market rules. Collectively, the regulatory, business model, and technical barriers are expected to limit the deployment of a fully functional offshore grid prior to 2035, according to the outlook report.
Next steps needed
The DNV report outlined five steps designed to support the cost-effective and timely development of offshore transmission infrastructure. Each of these would benefit from the support and/or direct involvement of state agencies and governor’s offices, DNV added. The next steps needed, as recommended by the report, are outlined below.
1. Establish a task force with industry and state participants to review the feasibility of AC mesh solutions given the significant supply chain constraints that have emerged since AC mesh solutions were first envisioned. The report recognized the need to prevent the sharing of competitive and proprietary information in a market with “essentially three HVDC suppliers.” It also noted the need to ensure full compliance with all anti-trust laws and regulations. With these stipulations in mind, DNV recommends that this task force should conduct a high-level assessment of US and global supply chains (including transportation and installation vessels) and their ability to achieve established offshore wind goals.
2. Enable the connection of 525 kV HVDC bipole circuits from the Northeast through the Mid-Atlantic. This could include:
• Support the potential transition to a 2,000 MW MSSC from the Northeast through the Mid-Atlantic.
• Work with NERC and regional reliability coordinators to treat a 525 kV HVDC bipole as two separate N-1 contingencies (at half of the full rating of the bipole).
• Work with grid operators to investigate potential solutions to mitigate the loss of an HVDC export cable (including cost-effective storage and/or demand response resources).
3. Investigating options to reduce the size and weight requirements of offshore platforms for 525 kV HVDC bipoles.
4. Define the planning, operational, and functional performance expectations for DC interlinks between 525 kV HVDC bipoles. The report noted that the North Sea Wind Power Hub Programme has started on this work.
5. Identify any points of interconnection and/or navigable channels that should be reserved for 525 kV HVDC bipoles.
