Last year, China’s renewable energy sales and investments hit a record 13.6tn yuan ($1.9tn), dwarfing the global fossil fuel funding total of $1.12 trillion. China’s installed capacity for renewable energy, including wind and solar, reached 1,410 gigawatts, surpassing coal. China has become especially dominant in solar energy manufacturing, having invested 10 times more than Europe in wafer-to-solar panel production lines and controls ~95% of the world’s polysilicon and wafers. China is, however, equally dominant in wind energy and currently operates almost half of the world’s installed offshore wind turbines, with 26 GW of a total of 54 GW worldwide.
It is, therefore, hardly surprising that Asia’s largest economy is also home to some of the most impressive feats of engineering in the renewable energy sector. China’s Dongfang Electric Corporation has rolled out a 26-megawatt (MW) offshore wind turbine, the world’s largest in both capacity and size. The state-owned manufacturer says the turbine boasts a blade wheel diameter of more than 310 meters (1,107 feet) and a hub height of 185 meters (607 feet). This offshore wind turbine is designed for areas with wind speeds of 8 meters per second and above. One of these giants is capable of generating 100 GWh of power annually with average winds of 10 meters per second, enough to power 55,000 homes. That’s enough to cut standard coal consumption by 30,000 tons and reduce CO2 emissions by 80,000 tons.
The project marks a turning point in the global energy transition. Offshore wind turbines can be built far out at sea, where winds blow harder, making them an ideal solution to the clean energy mix that doesn’t take up valuable land.
Trump’s offshore wind energy freeze
Unfortunately, America’s wind energy sector is now officially in limbo in Trump’s second term in the Oval Office. In a highly controversial move that sent shockwaves through the clean energy sector, Trump issued an executive order on his first day back in the White House that effectively halted the growth of wind energy in the U.S. The sweeping order freezes approvals for both onshore and offshore projects, pauses offshore wind lease sales and calls for a comprehensive review of existing wind energy leases. This move has created significant uncertainty about the future of wind energy in the U.S., and drawn widespread criticism from environmental groups, industry stakeholders and renewable energy advocates.
The uncertainty is further compounded by the potential economic fallout. Wind power currently supplies 10% of U.S. electricity, and is currently one of the most cost-effective energy sources at approximately $27 per megawatt-hour. In comparison, gas plants have a levelized cost of electricity (LCOE) of ~$45 per megawatt-hour, while coal plants generate electricity at $69 per megawatt-hour. A suspension of wind energy development is likely to jeopardize this cost advantage, leading to higher energy and electricity prices.
Trump’s disdain for wind energy is well documented. Previously, Trump went on a bizarre tirade, labeling wind turbines as ‘windmills’ and the biggest bird slayers, so his latest stance against wind energy might not have come as a surprise.
That said, offshore wind energy has been a somewhat tough sell in the U.S. The country’s first offshore wind auction in the Gulf of Mexico by the Biden administration in 2023 ended with a paltry $5.6 million winning bid, highlighting just how tough it can be for renewables to gain traction in oil and gas strongholds. Germany’s RWE was the winner of rights to 102,480 acres (41,472 hectares) off Louisiana. This marked the lowest winning bid for a federal offshore wind lease at auction since the Obama administration. The other two lease areas on offer off Texas received no bids. The Biden administration had set a goal to deploy 30 gigawatts (GW) of offshore wind by 2030, and the three Gulf leases combined had the potential to deliver more than 10% of that amount.
Although the Gulf’s waters haven’t sprouted any wind turbines yet, there are several reasons why the Gulf of Mexico is a perfect fit as an offshore wind hub.
First off, the Gulf Coast also has an abundance of companies and workers with decades of experience in producing energy offshore. According to the Energy Information Administration, Gulf of Mexico federal offshore oil production accounts for 15% of total U.S. crude oil production. Major fields include Eugene Island block 330 oil field, Atlantis Oil Field, and the Tiber oilfield (discovered 2009) while notable oil platforms include Baldpate, Bullwinkle, Mad Dog, Magnolia, Mars, Petronius, and Thunder Horse.
“We have a really mature base for energy. We’ve got the know-how,” Lefton said. The people, the companies, the manufacturers that know how to do [Outer Continental Shelf] energy development are in the Gulf of Mexico,” the Interior Department’s Bureau of Ocean Energy Management director Amanda Lefton has told Politico.
According to Hayes Framme, government relations manager for North America at Danish wind giant Ørsted A/S (OTCPK:DNNGY), the Gulf’s existing oil and gas infrastructure represents “a historic expertise.”
“One of the things that makes the Gulf area attractive is the fact that you’ve got a workforce that is accustomed to working on rigs in the ocean. It’s not like you have to build an industry. What you have to do here is basically help an existing industry evolve,’’ Dennis Arriola, CEO of the renewable energy company Avangrid Inc. (NYSE:AGR), has said.
Michael Hecht, the president and CEO of Greater New Orleans, says jobs in the Gulf’s traditional oil and gas industry have declined during the past decade, creating a sense of urgency to make a transition that allows people to retain their skills.
The Gulf could also become an important hydrogen hub, with wind power being used to generate green hydrogen to reduce greenhouse gas emissions from industries such as long-haul trucking, fertilizer manufacturing and aviation.
By Alex Kimani for Oilprice.com
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