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Construction of the first large-scale offshore wind project in the United States approved

The Vineyard Wind 1 project, which will generate 800 megawatts (MW), took a big step forward in the US offshore wind sector on Tuesday, when authorities approved its construction and operation.

The US Department of the Interior characterized the project as "the first large-scale, offshore wind project in the United States" in a statement. It will be built in waters off the coast of Massachusetts.

The Vineyard Wind project was projected to create 3,600 jobs and “enough power for 400,000 homes and businesses”.

The DOI added that a Record of Decision had granted Vineyard Wind “final federal approval to install 84 or fewer turbines off Massachusetts as part of an 800-megawatt offshore wind energy facility.”

The Vineyard Wind team claims that the facility will use GE Renewable Energy's massive Haliade-X turbines, which means only 62 will be required.

Copenhagen Infrastructure Partners and Avangrid Renewables have partnered to form Vineyard Wind, a 50-50 joint venture. The latter is a division of Avangrid, which is owned by the Iberdrola Group, a major Spanish utility.

Iberdrola expects to spend 2.5 billion euros ($3.03 billion) for the project. It will be operational in 2023 if everything goes according to schedule.

In a phone interview on Tuesday, Jonathan Cole, who is global managing director of offshore wind at Iberdrola, told CNBC that the project’s approval was “extremely significant.”

“This is the permit needed to now allow us to go ahead and build the project,” he said.

“This is the first of its kind in the U.S. and it’s expected to be followed by many other projects, so this is really the one which is going to kick off, in earnest, the U.S. offshore wind sector.”

“So it’s a huge moment for this project and for our companies, but it’s also a huge moment for the whole of the U.S. offshore wind sector.”

A number of organizations, including the National Ocean Industries Association, shared Cole's sentiments.

Its president, Erik Milito, described the greenlighting of the Vineyard Wind project as “an American energy milestone.”

“American offshore wind is a generational opportunity, and its outlook is more certain with the Vineyard Wind Record of Decision,” he went on to add.

Elsewhere, Heather Zichal, who is CEO of the American Clean Power Association, hailed “a historic day for clean energy and for our country that has been over a decade in the making.”

“Now is the time to push forward on offshore wind, catch up to global competitors, and decarbonize our electric grid, so that the U.S. can deliver economic and environmental benefits to our citizens and combat climate change,” she added.

Tuesday's news is the next boost for America's fledgling offshore wind sector.

The Departments of Energy, Interior, and Commerce announced in March that they hoped to increase offshore wind capacity to 30 gigawatts (GW) by 2030, a step that the Biden administration expects would create thousands of jobs and unlock billions of dollars in investment over the next few years.

If this goal is met, it would mark a major expansion for the United States. While the onshore wind industry in the United States is well-developed, the country's first offshore wind plant, the 30 MW Block Island Wind Farm, only began commercial operations in late 2016.

According to preliminary estimates from the US Energy Information Administration, wind produced 8.4 percent of utility-scale electricity in 2020.

Natural gas and coal, on the other hand, had 40.3 percent and 19.3 percent shares, respectively. Fossil fuels accounted for 60.3 percent of the total, while nuclear and renewables accounted for 19.7 percent and 19.8 percent, respectively.

When it comes to offshore wind, the United States also has a long way to go before it catches up to more developed markets like those found in Europe.

According to data from industry body WindEurope, the sector attracted over 26 billion euros (roughly $31.5 billion) in investment last year, a record number. In Europe, 2.9 GW of offshore wind capacity was installed in 2020.


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