Peter Kelly-Detwiler, Contributor
I cover the forces and innovations that shape our energy future.
In August of 1924, hundreds of people gathered on the shores of New Bedford Harbor to see the last wooden whaling ship – the Wanderer – depart on what all knew to be its final voyage. It didn’t last long. Two days out to sea, the Wanderer was caught in a storm, and the last living vestige of American whaling was wrecked on the shores of Cuttyhunk Island.
In earlier and better times, New Bedford had been the undisputed whaling capital of the world. In its heyday in the 1840s the New Bedford fleet comprised over 60% of the world’s whaling vessels. The oil from leviathans hunted in all oceans of the world was used principally for lamps and candles. Globally renowned, New Bedford was one of the wealthier cities in theUnited States, known as ‘The City that Lit the World.’
But technology changed. In 1859, ‘Colonel’ Edwin Drake drilled his successful oil well in Titusville, Pennsylvania. The discovery of cheap and widely available oil quickly led to the widespread use of kerosene in lamps, displacing the whale oil that had built New Bedford, and gradually bringing death to the whaling industry.
Now, nearly a century later, a new energy technology is being developed, and New Bedford seeks to claim its rightful place in this new energy era. In a strange evolution, those abundant winds upon which the whalers sailed have themselves now become the source of energy. And unlike the whales – hunted into nearly irreversible decline – the offshore wind resources are inexhaustible. So the Commonwealth of Massachusetts plans to harness the wind to meet today’s demand for electricity. With the help of the Port of New Bedford, the Commonwealth intends to build a Marine Commerce Terminal – costing as much as $100 million – to support a budding offshore wind industry that will be worth tens of billions of dollars for equipment manufacturers likeGeneral Electric, Siemens and American Superconductor, when mature.
It will not be an easy task. Yesterday’s wooden ships and whaleboats will give way to towers soaring hundreds of feet into the sky, carbon fiber blades the length of football fields, and turbines the size of small trucks. The turbines and blades being considered for the job will probably be in the neighborhood of 6-10 MW each (this compares with the turbines in offshore Europe which typically range between 3-6 MW today, and averaged 4 MW last year). These new windmills will be leviathans themselves – current wind turbine blades are maxed out at 75 meters, but the technology will soon be pushing 100 meters. Put another way, when three blades are combined with a tower, they will eclipse the Washington Monument in height by 50%.
These turbines have to be large. Since offshore costs are 2 to 3 times those on land, one needs to put in the biggest turbines possible to take advantage of the constant winds offshore. Both blades and turbines will have to get bigger, better, and stronger in order to harvest the maximum amount of energy at the lowest cost. For example, increasing the rotor diameter from 150 m (today’s largest blades) to 200 m (currently in development by at least one competitor) the blades will increase in length by 33%, but the swept area, which captures the wind energy, will increase by 78% (R2). The move towards bigger turbines is clearly accelerating. In 2012, 31 companies announced plans for 38 turbine models. Of these, 76% were for turbines larger than 5 MW, and a few were as large as 10 MW or greater.
With these types of improvements, the DOE’s National Offshore Wind Strategy looks to lower costs to 10 cents per kilowatt-hour by 2020, with a long-term goal of 7 cents by 2030. Significant technological developments will clearly need to happen for this to occur. Each windmill will cost in the tens of millions of dollars. However, the energy extracted from thin air by these wind farms could well be worth billions, and create thousands of new jobs in the Commonwealth.
It’s an alluring story. And so, on a cold day this past January, I visited the Port of New Bedford at the invitation of Richard K. Sullivan, Jr., Massachusetts Secretary of the Executive Office of Energy and Environmental Affairs, to learn more about the Commonwealth’s ambitious plans for the Marine Commerce Terminal and the offshore wind industry as a whole. As we strolled the pier with his staff and clambered down onto the beach, a seal swam just offshore between us and the silk curtains deployed to prevent winter flounder from spawning near the construction site.
Walking the shoreline, Secretary Sullivan and his team explained the aims of the Commonwealth and the specific details of the project. Massachusetts Governor Deval Patrick has articulated a goal of developing 2,000 megawatts of wind energy by 2020, with most of it offshore. The offshore wind resource is considerable: A recent US Department of Energy survey indicates there is enough offshore wind to equal four times current US electric consumption, with 25% of that off the Northeastern US. In an effort to streamline the permitting process, the Federal Bureau of Ocean Energy Management hasidentified two formal wind energy areas off the Massachusetts coast covering nearly 1,000 square miles, with leases to be offered for sale by competitive auction in 2013. Secretary Sullivan explained that these two areas alone contain the potential for 9,000 MW of wind energy. To put that number in context, New England’s highest peak demand for electricity tops out at just over 28,000 MW.
Turning that wind into energy will require the development of multiple wind farms and hundreds – if not thousands – of turbines. And if the European experience is anything to go by, it requires a significant investment in onshore infrastructure and supporting industries to make it happen. Massachusetts intends to position itself at the crux of this development, and is therefore moving ahead with the infrastructure to make this happen. The Commonwealth has already developed the Massachusetts Clean Energy Center’s Wind Technology Testing Center in Charlestown, MA, just outside of Boston, where they are testing the enormous blade technologies necessary for offshore. The next step is to develop the requisite port facilities.
To that end, the Commonwealth recently issued a tender for construction of a 28-acre terminal, as well as dredging 47 acres of the harbor to the necessary depth. The actual terminal will be multi-duty, able to handle both the highly specialized needs of the offshore wind industry, as well as more generalized merchant shipping. Three bidders responded in time to meet the February 15th deadline, and selection of the contractor will occur shortly. The 1,000 foot extension to the existing South Terminal bulkhead will be the only one of its kind on the East Coast, reinforced with specialized steel, and built to withstand a pressure of 4,000 lbs per square foot. The affiliated crane will also be specialized as well to handle heavy and cumbersome loads.
The planners are not merely building for the needs of today’s industry, but rather for the requirements of the offshore wind industry in the decades to come. Everything is being supersized in anticipation of technology which may be on the drawing board but which does not exist today. They are also building with an eye to our possible climate future – in anticipation of projected sea level rise, the bulkheads will be 11’ (rather than 9’ of the surrounding piers) above sea level.
In order to allow passage for the required vessels (which are likely to cost up to $100 million each – base on the experience of offshore wind in Europe), the adjoining channel will be dredged to a depth of 30 feet. The avoidance of surprise is critical here: to ensure they know the level of work involved, and whether blasting would be required (probably not), over 60 borings have already been taken to ascertain both the strength of the bedrock upon which the bulkhead will be constructed as well as the material to be removed from the harbor. The bulkhead will be long enough to accommodate two ships plus two jack-up barges.
In the immediate future, it is probable that the ships arriving will be from European companies, carrying blades, towers and nacelles for the projects. The Europeans have been working offshore for years, and are currently the only ones with the expertise and know-how at this point. At the end of 2012, they have installed 1,662 turbines in 55 offshore wind farms, totaling 4,995 MW. Last year alone, 293 turbines were installed, totaling 1,166 MW, and representing investments estimated to be in the range of $4.5 to $6 bn. Many of these turbines have been installed in the unforgiving and harsh environment of the North Sea.
All of this equipment will be offloaded at the terminal. The value-added work taking place on shore will largely involve the electrical integration of the pieces. Once ready for assembly, the towers, blades, and nacelles housing the generators will be carried to sea on jack-up barges. These vessels are technological marvels themselves, involving a combination of buoyant hulls and movable legs that allow them to ascend to a desired height (as high as 150 feet above sea level). They are also expensive – the biggest of them go for nearly $100 million. Jack-up barges create the stable platforms necessary to drive the pilings for the towers 80 feet or more into the seabed, and secure the wind turbines.
Longer-term, if and when the industry gets a secure foothold, it is expected that the offshore wind companies will bring investments to the local area. Secretary Sullivan expressed optimism: “We think, from experience in Europe, that the tipping point is 2,000 MW in the pipeline. After that, the imported components will start to decrease and more manufacturing would take place here.” The result would be to establish the New Bedford and neighboring Fall River area as a core area for production of the various necessary inputs. Everybody from local shipbuilders to machine shops could benefit from the economic ripple effects.
Bob Mitchell, CEO of the Atlantic Wind Connection, a company looking to build out the transmission backbone linking the windfarms off the coast of New Jersey, feels that this on-shoring of the manufacturing capability is critical in the long run. “We need to get manufacturing on US soil. The range of cost saving, if that were to happen, is somewhere between 18 and 25%. That’s pretty dramatic.”
There is some ‘Field of Dreams’ aspect to the project: if you build it, you hope the offshore wind developers will come. The underwater trunk transmission line carrying the power from the wind farms to shore has to be built. The supply chain must be developed and deepened, and skills sets developed from scratch. Critically, financing must be obtained for a largely unproven technology – the first of the giant turbines necessary to drive the costs down are just now being installed in Europe. The Independent System Operator that coordinates the grid and schedules power will have to be able to accommodate thousands of megawatts of wind.
So far, at least some of these pieces appear to be coming together. Secretary Sullivan noted that ten wind developers have already expressed interest, and many attended the EPA permitting hearings. Furthermore, Jim Gordon, the CEO of Cape Wind, has expressed his intent to stage out of New Bedford in 2014. This will provide initial impetus to the project – Cape Wind alone will involve erecting 130 3.6 MW Siemens turbines for the 468 MW project in nearby Nantucket Sound. Based on the experience of European offshore wind developers, this single project will likely take several years to complete
I spoke with Gordon about the project and he noted that one strong reason for developing wind in New England was the simple fact that “we are at the end of the energy pipeline. But we also have some of the greatest wind resources. Governor Patrick is positioning us to be a global leader in offshore wind with the investment in the New Bedford Marine Commerce Terminal.”
Gordon further commented “Government understands that prosperity comes to regions that develop their own energy resources. With whaling, New Bedford used to be the energy capital of the world. New Bedford banks financed the trans-continental railroad. We have the opportunity to develop an expertise in offshore wind that takes its rightful place with other Massachusetts industries like biotech, education, and computers.”
Gordon did express some concern about the tight timeline. Bids for the Terminal just came in this week February 15th, for project completion next year. “We’re hoping upon hope that the terminal is ready for in time for the Cape Wind project. If not, we have contingency back-up plans. But we need it ready in 2014.” Gordon points to all the jobs that will be created for the region if all goes according to plan “We’ve already done geo-tech work out of New Bedford. We had a four-month project with over 50 scientists and engineers. And don’t forget, these are 30-year wind projects, with long-term maintenance requirements and the jobs that come with that. It will take several years and several projects for the wind industry to feel confident enough to establish itself in the New Bedford area. That’s the experience in the UK. And of course, the more of these projects we do, the more the costs will fall dramatically.”
Some industry players are already taking the first steps to locate in the area. Siemens has set up its US offshore wind office in Boston, and offered assistance in specifying the technical requirements of the industry participants expected to use the port. Meanwhile ISO New England is “working on a series of wholesale market reforms that pertain to or impact wind power in New England.”
Other spinoff opportunities abound as well. It takes a significant number of vessels to service the offshore wind fields, and local boat builders are already looking to get into the game. Blount Boats in Rhode Island recently reached agreement with South Boats Special Projects to build US-flagged catamarans to service offshore wind facilities. Last June, Gladding-Hearn, a SE Massachusetts boatbuilder, signed a licensing agreement with Incat Crowther for an 18 meter service vessel. President Peter Duclos was quoted as saying “at this point, there are no wind farms approved or are fully funded or have sold their power.” Until all that happens, no one’s likely to order a boat, but “once contracts are signed, I think it’s going to bust open.”
It’s a bold undertaking, and a costly one. Part of the impetus to start now is to seize the high ground. Who gets there first wins. If the Marine Commerce Terminal gets built in New Bedford, the immediate incentive to construct competing terminals in nearby states falls dramatically, though the potential resources is so large that more ports could eventually be accommodated as the industry grows. At the same time, the Terminal needs to meet Cape Wind’s schedule and be ready for 2014. Assuming that project takes several years to deploy, the Terminal will need other companies lining up behind it to avoid a potential boom-bust scenario. Atlantic Wind Connection CEO Mitchell believes large wind will be in full-scale development off New Jersey by around 2019. If the same holds true for Massachusetts, there may be some gap between the end of Cape Wind deployment and the first activity related to offshore wind development. To partially hedge its bets in this area, the Commonwealth is designing the Marine Terminal to serve as a commercial port as well. Specifically, it is being designed to be able to handle high-volume bulk and container shipping, as well as large specialty marine cargo
Clearly, the success of the first Marine Terminal is not a sure thing. In order for the investment to be a long-term success, the delivered cost of wind energy will have to drop significantly. The developers will have to line up and make huge investments. Yet the economic potential may be enormous. As Secretary Sullivan commented “There are two ways to move forward in our energy policy. One way is to do nothing. The other approach is to accept some risk and try and create your own future.”
Two hundred years ago, New Bedford put itself on the world map with its investment in a whaling fleet. At its height, hundreds of whaling ships crisscrossed the globe on voyages that could last three to five years, and sometimes longer, fraught with enormous risks. Investors, captains and crew accepted these challenges because they deemed the rewards to be worth it. Once again, New Bedford is putting itself on the map, and Massachusetts is taking a financial risk investing in the Marine Commerce Terminal. If the offshore wind strategy falls into place, the rewards – clean energy, cleaner air, jobs, technology development, and profit – may be quite significant.