Dive Brief:

• Deepwater Wind broke ground Monday on the first U.S. offshore wind project — a five turbine, 30 MW installation off Rhode Island’s Block Island. Construction, which will create an estimated 300 jobs, is expected to be finished by the end of 2016.
• The Block Island project, proposed in 2009, has a power purchase agreement with National Grid. The turbines will provide electricity to all the island’s homes and businesses in place of diesel generators. Excess generation will go into the mainland grid via a new undersea cable.
• The Bureau of Ocean Energy Management has designated an area off the Rhode Island and Massachusetts coasts for wind development that has a 9,000 MW potential and could create 43,000 New England jobs, according to industry estimates.

Dive Insight:

There were about 7 GW of offshore wind installed globally at the end of 2014, most in Europe, where 6.6 GW were in construction and development, according to the report "Offshore Wind Market and Economic Analysis" from the Department of Energy (DOE) and Navigant Research.

DOE funding for offshore wind has been substantial but hasn’t broken the U.S. logjam. None of the 14 DOE-funded projects in development, representing 4.9 GW of capacity, have started construction. With the demise of the 468 MW U.S. flagship Cape Wind project, the Block Island project is the only one on the horizon in the U.S.

After overcoming obstacles for twelve years, Cape Wind was stopped late last year when its failure to meet contractual deadlines caused National Grid and Eversource to cancel their power purchase agreements for 77.5% of the project's output, stalling financing and development.

“The argument against Cape Wind is that offshore wind is still too expensive,” said Navigant Consulting Director Bruce Hamilton, co-author of a whitepaper on offshore wind that proposes regional collaboration to drive down costs.