How Ørsted, the Danish energy giant, plans to revolutionize the US grid
Wind energy naysayers complain the technology isn't sufficiently reliable. New offshore wind systems aim to change that.
Rahul Yarala put on a white hard hat, stepped through the doorway of his hangar-size testing bay, and gazed up at the biggest wind turbine blade he, or anyone, had ever seen. Without its final coat of white paint, it looked pinkish, almost intestinal. The grain of its balsa wood peeked through the epoxy, shot-through by spars of dark green carbon fiber.
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Over the next few months, Yarala's team at the Wind Technology Testing Center in Charlestown, Massachusetts, would bend and twist this giant Haliade-X blade — the latest model from GE — working to physically validate the predictions of computer models, to "de-risk" this new technology. "The problem is, it's got to work for 20 years," says Yarala, the center's executive director. "Offshore wind is not like other applications. The longest flight is what, 20 hours? But every 20 hours you can check. Here, once the turbine blades are up, they're up."
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The Haliade-X is GE's bet on the future: a 260-meter tall, 12-megawatt turbine that can generate more power with less air than its smaller predecessors. If the gripe against wind and solar is that they can't be counted on to supply a steady baseload to the grid — because of calm weather, clouds, or darkness — the next generation of offshore wind technology is a compelling rejoinder. Giant turbines have a higher "capacity factor," meaning they generate more electricity more of the time. And they cost less because you need fewer of them: fewer foundations to build on the ocean floor, fewer towers to erect above the waves, fewer things to maintain and repair far from shore. On land, 80-story-tall turbines are tough to install a few hundred at a time (the neighbors complain); but on the open water, bigger has been shown to be better. The steady supersizing of turbines — from 2-megawatt models in 2000 to 12-megawatts today — has helped bring down the cost of offshore wind, with no bottom in sight. No wonder GE pitches the Haliade-X as a "platform," engineered to grow; future models might be as powerful as 20-megawatts.
Offshore wind developers build, own and operate turbines, and sell the power they generate to utilities at an agreed-upon price. At present, there is a clear global market leader among them: Ørsted, a legacy Danish energy giant that has reinvented itself by going from "black to green." Over the past 20 years, it has dismantled its fossil fuel business and built in its place a growing portfolio of wind and other renewables — driving growth by eagerly adopting the latest technology.
So far, this has almost all taken place in Europe. But now Ørsted is getting ready to build in America. The stakes for its success here are high — both for its stockholders and for us. The U.S.'s energy grids are so big and broad that one region's astounding success with renewables is easily countered by another's abject delay. But, especially for the population centers of the Northeast, offshore wind has become the favored technology of coastal states eager to meet ambitious climate goals. Earlier this month, the federal government's Bureau of Ocean Energy Management said it would not issue any permits for new projects until December, pushing back the timeline for "steel in the water" until next year. But the backlog of contracted projects only grows. The Haliade-X blade arrives in Charlestown as a harbinger of thousands more blades to come.
This prototype was 107 meters when it sailed from the factory in Cherbourg, France, to the Wind Technology Testing Center's sturdy quay, on the banks of the Mystic River, just around the bend from downtown Boston. Its 107 meters is longer than the wingspan of a 747, and too long to fit inside the testing facility, which opened in 2011. So Yarala's technicians cut it down to 70 meters — still longer than the wingspan of a 747 — but short enough to be lifted into place by two 50-ton cranes. In preparation for several months of being tugged and turned by a phalanx of winches and pulleys, they wired it up with sensors and strain gauges, using rope ladders and safety harnesses to reach the ceiling of its hollow innards, like spelunking in a cave. One of the design challenges was allowing it to adapt to the differing wind conditions at the top and bottom of the blade's sweep, an altitude difference of more than 200 meters. The Haliade-X is so big that the entire offshore wind supply chain must be arranged in its image: ports need to be located away from even the tallest bridges, quays need to be structurally reinforced, "jack-up" ships (with towering cranes) must be built to new dimensions. (And built in America — as stipulated by the Jones Act, which has been protecting the U.S. shipping industry since 1920.)
Standing beneath it, the view is daunting. The political and economic calculus for offshore wind is nearly solved. But how will the U.S. create the infrastructure, build the factories, and develop the technical expertise, to not merely bring one big blade over for testing, but to wrestle with hundreds of them, tossing them from boat to port to installation vessel, until they click into place 700-plus feet in the air, to power a carbon-free future?
The Haliade-X is the biggest blade ever installed at the Wind Technology Testing Center. To prepare it for testing, technicians wire it with sensors and strain gauges. Photo: Toan Trinh
At the end of 2016, following years of painstaking development and bureaucratic delay, the first offshore energy project in American waters became operational: the five turbines of the Block Island Wind Farm, off the coast of Rhode Island. Since then, the announcements have come quickly. Driven by a combination of climate-focused legislation, gubernatorial one-upsmanship, and forward-thinking energy utilities, eight coastal states have committed to offshore wind projects. Rhode Island plans to add 400 megawatts to Block Island's existing 30 megawatts of capacity. Maryland wants 1,568 megawatts, the first of which will come online in 2022. Connecticut is working toward 2,000 megawatts, nearly half of the state's daily demand. Virginia is aiming for 2,640 megawatts by 2026. And New Jersey and New York made successive dueling announcements in 2019, raising their respective targets to 7,500 megawatts and 9,000 megawatts. Taken all together, these targets amount to a staggering 26,000 megawatts, or 26 gigawatts, of capacity. That's around what all of New York state demands on a summer day.
In the context of the entire United States, none of this is exactly revolutionary: The Energy Information Administration expects to see 18.5 gigawatts of onshore wind and 13.5 gigawatts of solar capacity added in 2020 alone. Those are big numbers — enough to shock and delight a climate realist, while still being too little, possibly too late. But for the crowded and cloudy coastal states committing big to offshore wind, these giant turbines just over the horizon (geographically and temporally) are the smoothest path to decarbonization — if the federal permitting moves ahead smoothly, if the port infrastructure can be marshaled, if the logistical knot of erecting skyscrapers in the ocean can be untangled, and if all that can be done on time and for profit. Creating political will for these projects was the hard part; solving these logistical problems is, by comparison, a far easier task.
"You know, this could become — this will become — like the Gulf of Mexico but for renewable energy," says Charlie Donadio, a Rhode Island ferry boat owner with a burgeoning business transporting wind turbine technicians. "I mean, you've never seen industry like this in two lifetimes." Politicians, protestors, academics and economists may fret about cleaning up the electric supply — and despair at the likelihood of a climate catastrophe. But in coastal cities and disused industrial ports up and down the East Coast, a murmur is rising about what's about to happen. "I think it's the calm before the storm," Donadio says.
What that will actually mean out in the water is worth imagining. Block Island's five existing turbines, each 30 stories tall, are dramatic enough to draw tour boats of gawkers in the summer. The Haliade-X will be more than twice that height (and generate twice the power); at 853 feet, it is as tall as the Transamerica building. To build out the power capacity the Eastern states are planning, we'll need a lot of them: Imagine 1,700 Haliade-X turbines twirling above the ocean mist.
According to the Special Initiative on Offshore Wind, a research project at the University of Delaware, the supply chain for this renewables boom could total $70 billion over the next decade. (According to the IPCC, the next decade could see the global temperature rise 1.5 degrees, throwing human and natural systems into chaos.) The logistical and technological details behind that $70 billion — like the enduring structural integrity of the Haliade-X, or the fact that its tip had to be cut off to fit inside the testing facility — are not just details, but emblematic of all that has to happen to build out renewable energy in the United States, efforts that will in turn reshape the entire energy industry and our planetary future.
The expertise driving that has been predominantly imported from two overlapping realms: European offshore wind developers, who have spent the last two decades working the kinks out of their processes; and the offshore oil industry, resigned, if not happy, to be redeploying its skills. Ørsted, the Danish energy giant, sits at the center of this Venn diagram.
A renewables major
In 2018, UBS analyst Sam Arie described a paradigm shift in the electricity generation business. Historically, it had been dominated by regional utilities, dependent on their mastery of the regulations and politics of local markets. That made intuitive sense: Since the time of Edison, electricity was hard to move long distances, but relatively easy to generate locally (you just needed fossil fuels). But a new type of player was emerging: technology-driven companies adept at the challenges of building renewable energy. Crucially, their skills were geographically transferrable. In the energy business, the hard part used to be the politics, now it was the technology. That reminded Arie of the evolution of the oil and gas industry, in which mergers and acquisitions led to "a smaller number of larger companies competing for global market share," and relying heavily on technology for an advantage. He coined a term: these were "wind and solar majors," a play on the "oil majors" of the last century.
For the CEO of Ørsted, Henrik Poulsen, Arie's insight put a name to a corporate strategy that had begun to take shape long before he took over the Danish company in 2012. Even when Ørsted was known as DONG — or Danish Oil and Natural Gas — it had been a pioneer in offshore wind. In 1991, it built the world's first project, Vindeby, off the coast of Denmark. With 11 turbines producing a total of 5 megawatts of power, it was little more than a demonstration, alongside DONG's main business, which was focused on building up Denmark's oil and gas exploration in the North Sea.
But around the turn of the millennium, that began to change. DONG saw its main customers — namely the Danish government, and the United Kingdom — become restless about their energy supply. Their concerns were in part about climate change, as the European Union set the first carbon reduction goals. But they were also political, as both the U.K. and Denmark fretted about their dependence on Russian gas. Identifying offshore wind as its most accessible low-carbon resource, the U.K. began leasing blocks of seabed for its development and heavily subsidized the first installations. DONG jumped on the opportunity. Its first utility-scale farm opened in 2002, with 80 2-megawatt turbines spinning in the North Sea. More came quickly. The technological bloom of the North Sea oil industry provided new offshore capabilities that could be leveraged for wind, to improve efficiency and reduce cost. By the end of the 2000s, DONG and its competitors were installing hundreds of turbines at a time — like the 630-megawatt London Array, completed in 2013 — and producing gigawatts of carbon-free power.
We must both geographically and technologically build a much wider and bigger platform for the future. I think we will have something called renewable majors, in the same way as we now have oil majors. — Ørsted CEO Henrik Poulsen
In 2009, DONG's leadership codified this radical path forward as the "85/15 strategy": Rather than its business consisting of 85% fossil fuels and 15% renewables, the ratio would flip. Within a generation — defined by the company as 30 years — 85% of DONG's energy production would come from carbon-free sources. The transformation took less than a decade. In 2017, DONG jettisoned the "oil and natural gas" from its name and rebranded itself as Ørsted, after the 19th-century Danish physicist Hans Christian Ørsted, who discovered (among other things) electromagnetism. The next year, CEO Poulsen announced a plan to invest $30 billion in green energy. "We must both geographically and technologically build a much wider and bigger platform for the future," he said. "I think we will have something called renewable majors, in the same way as we now have oil majors."
"This has to be global," Thomas Brostrøm, the CEO of Ørsted North America, told me, sitting in the boardroom of Ørsted's newly opened New York City office, high above Madison Avenue, its white walls draped with dangling plants, like a Copenhagen cafe. "It has to be global so you can get the volume, and you can get the standardization. And that only happens if you can activate North America, Asia and other parts of the world. Which is happening now — at a fast pace."
Ørsted has built 5.6 gigawatts of offshore wind in operation, leading the world with 30% of the global total (excluding mainland China). It has another 4.3 gigawatts under construction. Yet nearly all of that — save for Block Island, and a small project off Taiwan — is in the relatively small pond of the North Sea. The geographic concentration of the offshore wind industry has been a logistical boon. The giant blades and turbines are manufactured at a series of factories rimming the sea. The specialized installation vessels — known as jack-up ships — can be redeployed easily among the different installations. The crew transfer vessels that ferry workers to the turbines, and the service operation vessels — their larger cousins, like floating hotels for technicians — can be moved from site to site. But Ørsted's ambition of 15 gigawatts of offshore capacity by 2025 supersedes those geographic bounds. It requires America.
To fit inside the Wind Technology Testing Center, the Haliade-X blade was cut down from its original length of 107 meters. Photo: Toan Trinh
The Wind Technology Testing Center validates blades of all sizes for both offshore and onshore turbines, but the Haliade-X is the largest ever. Photo: Toan Trinh
Brostrøm arrived in the U.S. in 2016, setting up first in Boston, part of a cadre of Danes eager to replicate their success across the Atlantic. His timing was fortuitous. Until that summer, the U.S. record with offshore wind had been one of failure. An energy entrepreneur named Jim Gordon had spent the previous 15 years trying to build Cape Wind, consisting of 130 turbines in Nantucket Sound. Technically, the site was mediocre; the water was shallow but the wind was only moderate. Politically, it was kryptonite. The turbines would have filled the ocean view of billionaires and politicians, most notably William I. Koch, the fossil fuel industrialist. Collectively, Cape Wind's opponents spent $30 million fighting it. Gordon finally gave up in 2017.
But 2016 brought a win with the opening of the Block Island Wind Farm. It was small by European standards, but its effect on the American market was immediate. "Block Island was not an end, it was designed to be the beginning," says Jeff Grybowski, a Rhode Island lawyer and political operative who led its development. That August, Massachusetts Gov. Charlie Baker signed legislation requiring utilities to contract 1,600 megawatts of offshore wind power, "a large enough scale procurement legislation to attract European companies," notes Liz Burdock, CEO and president of the Business Network for Offshore Wind, a nonprofit trade group.
In Europe, prices for new procurements were falling precipitously. The Cape Wind debacle may have held American offshore wind back for a decade, but the technological improvements wrought in Europe — where governments had heavily subsidized the first utility-scale installations — had loaded the spring. That December, about the time Block Island first started sending power to the grid, a federal lease auction of waters off Long Island went through 33 rounds of bidding. The winner was Statoil, the Norwegian oil giant (itself since renamed Equinor), and the price was $42 million — a leap, you might say, from the previous high of $280,000, a year earlier. (The buyer then: DONG.) The inevitability — and profitability — of East Coast offshore wind was coming into focus.
For Ørsted, the fundamentals were irresistible. "You start by looking at wind speeds, which are on par with the North Sea — so, strong, and also constant," Brostrøm explains in the New York City boardroom. "And they normally pick up in the afternoon and evening when they are needed the most, so that's pretty important."
That was the beauty of the ocean. Wind turbines can be 25 miles offshore, mostly out of view, but still close to power-hungry coastal cities.
The water depths on the continental shelf were workable for offshore foundations, at 100 to 150 feet. "So those two basically tick the boxes," Brostrøm says. Most importantly, the demand was there — for power, but not for power plants. "You could see there were a lot of retirements of nuclear and coal power plants, especially in the Northeast," Brostrøm says. "But in the very densely populated areas around Boston and New York, it's very hard, as you know, to build infrastructure projects."
That was the beauty of the ocean. Wind turbines can be 25 miles offshore, mostly out of view, but still close to power-hungry coastal cities. And unlike solar or onshore wind, offshore can be installed in thousand-megawatt blocks — about the capacity of a nuclear reactor. "Put it offshore, feed it right in. What can beat that?" Brostrom says. "Fundamentally it's such a compelling value proposition."
In 2018, Ørsted purchased — for $510 million—Deepwater Wind, the Rhode Island company that developed the Block Island Wind Farm and had won contracts for an additional 810 megawatts of capacity. At the time, the North American market looked like 7 or 8 gigawatts — not the 26 gigawatts currently planned. That leap in expectations is global: the 20 to 25 gigawatts installed today is likely to be 100 to 150 gigawatts by 2030. In October, the International Energy Agency raised eyebrows by suggesting that a full deployment of floating turbines — which can operate in deeper waters, farther from shore — could fully supply the global demand for energy, 18 times over.
That ongoing growth reflects not only the commitment on the part of governments and utilities to carbon-free power, but the technological advancements that have brought prices down faster than anyone expected. "What has happened is beyond expectations," says Eric Hines, an engineer who directs the offshore wind energy graduate program at Tufts University. "The turbines have gotten three times as big and the price has gotten three times smaller."
As blades get bigger, offshore wind loses some of its "intermittency," the bugaboo of renewables. GE boasts that on a typical North Sea site (East Coast winds are about equivalent), the Haliade-X has a gross capacity factor of 63%, meaning that over a year it generates that percentage of its theoretical maximum output of a constant 12 megawatts. It is an attention-getting stat in the utility world. Two decades ago, offshore wind had a capacity factor in the low 30s; today's highest-performing offshore wind farms in the U.K. are already above 50%. The comparison with other renewables is equally dramatic. In the United States, solar has an average capacity factor of 24.7% — but only 16.5% in Massachusetts (which lacks Nevada's sun). When load factors go up, meaning wind farms are generating power more of the time, revenues go up, too. In the competitive auctions for long-term contracts, prices go down. State-led procurements keep coming.
On paper, all that sounds good — which explains the 26-gigawatts worth of enthusiasm surging up and down the East Coast. But the thing about offshore wind is its literal scale, and the herculean logistical effort required to make it happen. "By 2030, that's $70 billion in capital investment and that's 1700 wind turbine generators," says Nancy Sopko, director of the Special Initiative on Offshore Wind. "That's 1,750 subsea foundations. That's 45 offshore substations, 16 onshore substations and 5,000 miles of cable."
How do you make it all happen?
In 2011, Greg Dolan and a small team of structural and geotechnical engineers went to Europe to look at docks. Massachusetts had recently established the Clean Energy Center, an economic development agency, and high on its wish list was a piece of "catalyst infrastructure" for the offshore wind industry. At the time, Cape Wind was still an ongoing concern, and MassCEC's plan was to invest in a port facility that could receive and process its turbines, preparing them for final assembly. Dolan and the other terminal designers visited Esbjerg and Grenaa in Denmark, and Bremerhaven in Germany, each busy with wind components feeding the North Sea boom. In some places, the aging infrastructure of the European ports had trouble supporting the weights and height clearances the turbines required. They had repeatedly rebuilt their quays, driving new foundation piles to handle the load.
"We tried to leapfrog all of that," Dolan recalls, sitting in a conference room at the New Bedford Marine Commerce Terminal, on the shore of the small Massachusetts city still famous for its 19-century whaling heyday. He canvassed the turbine makers, like Siemens and Vestas, about where their technology was going. "We had a sense that these things were going to be getting bigger. Back then it was hard to gauge, but all of them were looking at ten-megawatt-plus turbines as what the future would be bringing." After considerable environmental remediation, the terminal in New Bedford was finished in 2015, at a cost of $113 million, borne by the state. In 2016, Dolan became terminal manager.
Haliade-X blades are expected to spin for 20 years.Photo: Toan Trinh
On a cold day this January, with a severe clear sky and wind whipping in from Buzzards Bay, we went outside to take a look. The majority of the terminal's 29 acres is a single expanse of gray dirt and gravel, with tall lighting poles pushed to the edges — the better to steer clear of, say, a 107-meter long blade and the towering crane needed to lift it. The foundation system Dolan and his team settled on was a cellular cofferdam, which gets its strength from steel plates rolled into a circle, like standing on a soda can, topped by a concrete platform. At the far end, nearest the hurricane barrier, Dolan pointed out a visible piece of it, a literal foundation of offshore wind in America: a crescent moon of one of the 60-foot diameter coffers peeking out from underneath the platform, black water lapping against its edges. "This is just one tiny component of a larger wind industry," Dolan said. The structure is astonishingly strong, able to support 100 metric tons per square meter of concentrated load, right up to the sea wall, where turbines would be unloaded. (A fully loaded 747 weighs around 400 metric tons.) These extremes are unique to offshore wind; "heavy lift" ports typically support just a quarter of that load.
But more ports like New Bedford are coming. Just last week, Ørsted announced the finalization of a deal to revitalize an old port in New London, Connecticut, known as State Pier. The $157 million investment — drawn from a combination of public and private funds — will bring the port up to snuff for three of Ørsted's upcoming New England projects, totaling 1,700 megawatts of capacity. In Baltimore, Ørsted has an agreement with Tradepoint Atlantic, a major logistics port (including an Amazon fulfillment center), to use 50 acres for the construction of its 120-megawatt Skipjack wind farm — expected to be the first deployment of the Haliade-X, in 2022. In New York, NYSERDA, the state's energy R&D organization, will be soliciting proposals for up to $200 million in state funds for port infrastructure improvements.
For the state officials and advocates who have been waiting a decade or more for the arrival of American offshore wind, it is a heady moment. "Those millions and millions of dollars are really adding up to create a country that is equipped for the 21st century," Sopko says.
But the unabating paradox of offshore wind in America today is the sheer scale of the plans. The port in Baltimore may be big enough for 10 turbines, but is New London, or New Bedford, big enough for 100? At the scale of build-out on the table, the logistics all spiral out of control. For governors and utilities, the appeal of offshore wind is its ability — distinct from onshore wind and solar (at least in the Northeast) — to be built in multi-hundred-megawatt blocks. But construction at that volume is its own challenge.
"This is the thing that keeps us all awake at night," says Bruce Carlisle, managing director for offshore wind at the Massachusetts Clean Energy Center. "The thing is, we've got one port right now. And that one port does not equal demand at this point in time. Our assets don't equal demand — nothing really does."