Building the Foundation: How Offshore Wind Projects are Developed

Anatomy of a Wind Turbine

From CESA's December 2023 OWA Newsletter

    1. Foundations are enormous steel or concrete structures that anchor the turbine to the sea floor. The specific type of foundation used depends on the turbine’s depth and the composition of the seafloor. Fixed-bottom turbines typically use monopiles (large steel tubes), gravity foundations (wide and heavy concrete bases), or jackets (three- or four-legged steel structures) as a platform for the turbine. Monopiles are hammered into the seafloor using a piledriver, while gravity and jacket foundations typically use suction to stay in place. Foundation technology for floating turbines is less standardized but are often ballasted concrete tubes or very wide concrete platforms that float in the water. They usually use one or a series of heavy lines or cords that are moored to the seafloor to keep the foundation in place. Foundations are always the first structures installed at a wind farm.

    2. Transition Pieces are large steel tubes that connect foundation to the turbine’s tower. In addition to connecting the underwater and above-water components, they also serve as a platform for wind turbine technicians to get onto the structure. They are the second piece installed after the foundation, and they are often painted yellow or another bright color.

    3. Towers are the extremely tall steel tubes that give the turbines their height, often soaring taller than the Statue of Liberty. Since it’s impossible to build and transport such a tall structure in one piece, towers are typically three steel tubes connected together with rivets. The pieces are connected onshore, loaded onto the wind turbine installation vessel, and then brought out to the installation site.

    4. Nacelles sit atop the tower and convert the rotation of the blades into electrical power. The spinning turbines rotate gears in the nacelle that turn a powerful set of magnets, generating an electrical current. Nacelles on offshore wind turbines are large enough for a person to fit inside them.

    5. Blades, the most recognizable part of a wind turbine, spin as wind flows cross their surface, driving the gears in the nacelle. Blades are made of carbon fiber or other plastic-composite materials molded into shape using heat. Unlike towers, blades cannot be assembled in pieces—this makes transporting them a delicate and expensive part of the process. Each blade is typically longer than a football field, and at their base, they are wide enough for a person to fit inside them.

Check out these resources to learn more about how wind turbines work and how they are engineered:

• Ørsted – How Do Offshore Wind Turbines Work? (article)
• Iberdrola – Offshore Wind Turbines Foundations (article)
• NREL WINDExchange – Technology Below the Water (webinar)
• NREL WINDExchange – Technology Above the Water (webinar)

Who decides where we build offshore wind?

Given its size and output, offshore wind is a great way for coastal states to meet their clean energy targets and ambitions. If a state is interested in building offshore wind, its first step is to ask the Bureau of Ocean Energy Management (BOEM)—housed within the U.S. Department of the Interior—to form an Intergovernmental Task Force. The purpose of the Task Force is to gather stakeholders from relevant territorial, Tribal, local, state, and federal government agencies to identify which areas in federal waters might be best suited for offshore wind development. BOEM has established 15 Intergovernmental Task Forces to date in California, Delaware, Florida, Guam, Hawaii, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Oregon, Rhode Island, South Carolina, and Virginia.

Intergovernmental Task Forces typically meet periodically over several years. Meetings focus on identifying which areas of ocean might be good for offshore wind development, and what areas of ocean should be excluded for a variety of economic, cultural, scientific, military, or other purposes. The Task Force will also hold meetings with outside stakeholders, such as representatives from industries like fishing or shipping, marine scientists, and environmental groups to gather additional input.

The Task Force continues to meet throughout the offshore wind planning and leasing process.

The linked summary outlines the activities undertaken by the BOEM California Intergovernmental Renewable Energy Task Force to do outreach with relevant stakeholders: Outreach Summary Report California Offshore Wind Energy Planning.

How are potential offshore wind sites identified? Pt. 1: Call Areas

From CESA’s November 2022 OWA Newsletter

After the Intergovernmental Task Force has established certain areas for or excuded certain areas from offshore wind power

development, BOEM publishes a “Call for Information and Nominations” about a specific region, the “Call Area,” in the outer continental shelf (OCS). The OCS is an area that begins 3-9 nautical miles out from the shoreline. This call helps BOEM determine whether there is interest from the private sector in developing offshore wind in that Call Area, and whether there are any objections from stakeholders to developing specific portions. States can also nominate areas that they have studied for their offshore wind energy potential and ask BOEM to designate them as Call Areas, once BOEM has conducted its own review. In our next newsletter, we will discuss how Call Areas become Wind Energy Areas, the next phase of the offshore wind leasing process.

What are Wind Energy Areas?

From CESA’s May 2023 OWA Newsletter

A Wind Energy Area (WEA) is a portion of the outer continental shelf that BOEM identifies for future offshore wind development. Starting with a Call Area, BOEM uses its own analysis, as well as public comments from its Call for Nominations to narrow the area into a Draft WEA. Factors that BOEM considers in the creation of a Draft WEA include density of fishing activity, levels of current or future maritime traffic, U.S. Department of Defense designated uses, and recommendations by offshore wind developers regarding the wind resource. The WEA is then subject to a National Environmental Policy Act (NEPA) review. After BOEM finalizes a WEA, the leasing process can begin. If there is significant enough interest from developers, BOEM may carve a WEA into multiple “leasing areas.” In our next installment, we’ll discuss how BOEM leases WEAs to offshore wind developers.

To learn more about the process of identifying WEAs, you can check out these documents and videos from BOEM and NYSERDA:

• Regulatory Framework and Guidelines (boem.gov)
• Wind Energy Commercial Leasing Process (boem.gov)
• Siting and Leasing Offshore Wind Energy Areas (Learning from the Experts)

The Environmental Assessment Process

From CESA’s July 2023 OWA Newsletter

When BOEM leases a portion of the Outer Continental Shelf (OCS) to an offshore wind energy developer, it gives the developer the exclusive right to study the area for its wind energy potential. Before leasing, BOEM is required by the National Environmental Policy Act (NEPA) to conduct and publish an Environmental Assessment (EA), determining whether the study of the lease area would significantly impact the area’s human and environmental activity. The EA is the first of several analyses that take place over the course of a project’s development that are required by NEPA. When creating the EA, BOEM considers only the potential environmental effects of studying the lease area—called “site assessment”—not the effects from construction of the project itself. These activities typically include the construction of meteorological towers and buoys and geological, geotechnical, biological, and archeological surveys by a developer.

In the EA, BOEM considers effects of site assessment activities on the area’s physical resources, biological resources, land use and coastal infrastructure, and socioeconomic resources. In addition, BOEM must consult with other US government agencies and consider laws with jurisdiction over the same area. These agencies include the U.S. Fish and Wildlife Service and the National Marine Fisheries Service, and laws include the Endangered Species Act, the Magnuson-Stevens Fishery Conservation and Management Act, the Coastal Zone management Act, the Marine Mammal Protection Act, the National Marine Sanctuaries Act, the Native American Graves Protection and Repatriation Act, and the National Historic Preservation Act. During these consultations, BOEM may reach out to additional entities, including Tribes, state and local governments, and non-profit organizations. Once BOEM has completed its assessment and consultations, the agency will issue a Draft EA, subject to a public comment period, before revising and issuing the Final Environmental Assessment, which determines the conditions under which the leasing areas can be studied by developers. In the next newsletter, we will discuss how BOEM auctions portions of a WEA to developers.

For an example of a BOEM Environmental Assessment, you can skim through their Revised Environmental Assessment of the Atlantic Continental Shelf Offshore North Carolina.

How does BOEM prepare for an offshore wind energy lease sale?

From CESA’s September 2023 OWA Newsletter

At the same time that BOEM conducts its Environmental Assessment, the agency also determines whether one or multiple developers are interested in bidding for leasing areas within the WEA, which is called Competitive Interest. If only one developer or agency is interested in a lease area, BOEM makes a declaration of “No Competitive Interest.” This does not typically happen with commercial leases, although it can occur. More frequently, non-competitive leases are issued for “research areas,” such as the WEA developed for the Coastal Virginia Offshore Wind Pilot Project or the State of Maine’s Gulf of Maine Research Array.

If Competitive Interest does exist, BOEM prepares a Proposed Sale Notice (PSN)—a document alerting developers and the general public that the government intends to lease portions of the WEA. See an example PSN pertaining to the Gulf of Mexico here. Lease sales are typically held as competitive auctions, where developers bid for the sole right to seek government approval to develop a portion of the WEA. Included in the PSN are the WEA boundaries, fiscal terms for leasing, auction details, proposed leasing terms, and any nonmonetary factors that BOEM will consider during the auction. Following BOEM’s release of the PSN and a 60-day public comment period, BOEM releases a “Final Sale Notice,” containing a list of developers qualified to participate in the auction. Critically, a lease that results from a Final Sale Notice is not an approval for any offshore wind energy project. Instead, lessees will continue to be subject to BOEM’s approval process for project-specific plans and will have to go through other environmental and public reviews before project development is authorized. Before such project-level plans are evaluated though, a developer needs to win the auction. In our next newsletter, we will dive into BOEM’s competitive auction process.

How does BOEM conduct offshore wind auctions?

From CESA’s December 2023 OWA Newsletter

As we covered in September, BOEM’s last action before an offshore renewable energy lease sale is to release a Final Sale Notice, which spells out the conditions under which the lease sale will take place and a final list of qualified bidders. All bidders must be vetted by BOEM and pay a bid deposit.

While auctions have typically focused on monetary bids, BOEM has inserted non-monetary conditions into recent offshore wind auctions in the form of “bidding credits,” which are worth a certain percentage of a developer’s cash bid. Bidding credits for past auctions have included plans for workforce training, domestic supply chain development, fisheries compensatory mitigation funds. To qualify for a bidding credit, the bidder must develop a plan showing how they fulfill one of the above bidding credits requirements. Before the auction, a BOEM-appointed panel determines whether the plan meets such requirements. Read more about BOEM’s bidding credit system here.

Before the official auction takes place, BOEM conducts a mock auction with all qualified bidders to familiarize participants with the auction process. The auction then takes place online and is completely anonymous. Bidding occurs over multiple rounds. In each new round, BOEM increases the asking price for the lease area, and bidders indicate whether they are willing to pay the asking price. Rounds continue until only one bidder is left. When a bidder is eliminated, they may submit an “exit bid,” which falls somewhere in between the asking price of the last round and the asking price of the next round. It may be the case that BOEM raises the asking price beyond what any bidder is willing to pay. If that happens, the bidder with the highest exit bid is the provisional winner of the lease sale.

Historically, there has been a wide range of winning bids for different lease areas in the US. On the low end, Vineyard Wind purchased OCS-A 0501 for just $166,886 in January 2015. In December 2018, Beacon Wind, SouthCoast Wind (formerly Mayflower), and Vineyard Wind purchased OCS-A 0520, OCS-A 0521, and OCS-A 0522 respectively for roughly $135 million each.

The Site Assessment Process

From CESA’s January 2024 OWA Newsletter

When an offshore wind lease area is auctioned to a developer, the developer does not own that area of the ocean. Rather, the developer owns the right to develop that area, subject to BOEM’s approval.

With an offshore wind area lease in hand, a developer cannot simply begin building their project. The developer must first study the area in a process called “site assessment” to understand the precise oceanographic and meteorological conditions of the site. These data will help developers determine what types of foundation to use, the best size and configuration of turbines, and other essential engineering details. Developers typically use high-tech buoys and meteorological towers to measure waves and currents, monitor weather conditions, map the sea floor, and learn about soil composition in a process that can take up to five years.

Before conducting the site assessment, the developer must submit a Site Assessment Plan (SAP) for approval by BOEM within 12 months of winning the lease. In the SAP, developers provide a highly detailed explanation of the survey activities they plan to perform, including the equipment used, installation of the equipment, and decommissioning and removal of the equipment once the site assessment period is complete. Additionally, developers must demonstrate how they will avoid wildlife and protected species and respond to accidents such as oil spills. Lastly, the developer may need permits from other government agencies, such as the Coast Guard, Amy Corps of Engineers, Department of Transportation, Environmental Protection Agency, National Oceanic and Atmospheric Administration, and state agencies.

In reviewing an SAP, BOEM may approve, approve with modifications, or disapprove. If approved, a developer can begin installing its monitoring equipment and studying the lease area. For a more detailed timeline of the SAP process, see BOEM’s site assessment webpage. For an example SAP, see Equinor’s 2018 SAP for Empire Wind.

How are offshore wind projects financed?

From CESA’s April 2024 OWA Newsletter

Offshore wind projects are very large, typically running into the hundreds of millions or sometimes billions of dollars over several years. Given those costs, project developers in the United States do not want to take on the costs of building projects unless they know that someone will buy the power once the project is complete.

This is where states come in. To incentivize developers to build offshore wind projects, states can direct a utility, utilities, or a state agency to enter into a contract promising to buy power for a set number of years from an offshore wind project. This allows the developer to move forward with their project, knowing that they will have a customer once the project is built. If the state has a clean energy mandate, it also ensures that the state is receiving clean power. These contracts help developers “de-risk” offshore wind projects by guaranteeing a steady revenue once the projects are producing power. When a developer feels that a project’s risks have been sufficiently managed, they say the project is “bankable”—meaning that a bank would feel comfortable loaning money for the project.

This guaranteed revenue is a foundational element of project finance, which is how most large-scale infrastructure projects get financed.

For offshore wind projects, the contract with states typically entails one of two mechanisms: a Power Purchase Agreement (PPA) or an Offshore Renewable Energy Credit (OREC) contract. In a PPA, the state directs one or more utilities to buy power at a specified price per Megawatt-hour (MWh) over a certain period of time, usually 20 years. Note that these are longer than typical onshore wind PPAs. Connecticut, Massachusetts, and Rhode Island, for instance, use PPAs to buy offshore wind power. In an OREC contract, the state does not direct the utility or utilities to buy power from the offshore wind project; rather, the utility or utilities are required to purchase ORECs produced by the project at a certain price over a similar timeframe to a PPA, creating a long-term revenue stream. An OREC is created when the project generates 1 MWh of electricity. New York, New Jersey, and Maryland all use OREC contracts.

Regardless of the mechanism, without state contracts, offshore wind would be too risky for developers to build in the United States. Note that entering into these state contracts is not a requirement for developers; however, banks that invest in these projects would not otherwise agree to take on the risk of developing projects without a guaranteed buyer. To learn more about how each state’s approach differs, read NREL’s Comparing Offshore Wind Energy Procurement and Project Revenue Sources Across U.S. States.

How do states buy offshore wind power?

From CESA’s June 2024 OWA Newsletter

As we’ve established, a project developer will enter into a contract with a state (or states) to buy power over a set number of years. In most cases, a state law will require the state’s energy agency to secure a certain amount of power through these contracts, in order to meet the state’s offshore wind goal.

To meet their goal, states typically ask for bids from project developers in a competitive process called “procurement.” Under this process a state energy agency will publish a document called a “solicitation” or “request for proposals” (RFP). These documents specify the rules and standards that developer’s bid must follow to be considered by the state energy agency. States leave their procurements open for several months to allow developers time to submit bids. After the procurement period closes, the state energy agency will assess the bids according to the price per megawatt hour (MWh) that the different developers are offering.

Things that states typically look for in a developer’s bid are experience building large offshore wind projects, commitments from manufacturers to supply major equipment like turbines and cables to the project if selected, and progress securing federal, state, and local permits. The primary goal of any offshore wind procurement is to secure the lowest possible price per MWh of electricity for a project; since developers are bidding against each other, they are incentivized to offer the state the lowest price that they reasonably can.

However, the contract does not simply go to the lowest bidder, as states consider both the costs and the benefits of proposals. States often consider factors such as benefits to ratepayers, developers’ investment in local economies, plans to build a manufacturing facility in the state, or commitments to train and hire local workers. For instance, in New York, a Public Service Commission order requires that proposals be evaluated so that 70% of a bid’s grade rests on price considerations, while 20% is attached to economic benefits to New Yorkers, and 10% to project viability.

Recently, state solicitations and RFPs have gotten more complex in an attempt to deal with inflation. Many states now allow developers more flexibility to meet certain standards and include mechanisms to increase the per MWh price if inflation remains high.

Once a state has selected a winning developer, they may take several more months to negotiate the details of the contract. To meet their procurement target, a state will often select multiple developers’ projects in a single round of procurement. Once the contracts are finalized, the developers must adhere to the contract terms, which may include requirements to make certain payments to state institutions, create economic or workforce development programs they have committed to, and report their progress to the state.

As an example, you can view all of the New York State Energy Research and Development Agency’s (NYSERDA) offshore wind power procurements here: Offshore Wind Solicitations - NYSERDA

Construction and Operations Plans

From CESA’s October 2024 OWA Newsletter

To get permission from BOEM to build an offshore wind project, a developer must first submit a Construction and Operations Plan (COP), a critical step in moving the project forward within a lease area. A COP must demonstrate that the project is being conducted in a manner that conforms to responsible offshore development.

The COP is meant to give BOEM as much information as possible about the project so that it can conduct its environmental, technical, and socio-economic reviews. Chiefly, this document helps BOEM’s staff understand the potential impacts of the project on the local environment and nearby communities.

A typical COP contains details on how a project will be built and operated until its eventual decommissioning. This includes a description of all planned offshore and onshore facilities necessary to build and operate the project, and in practice may include a range of design parameters under a so-called “project design envelope” instead of final designs for the project. This means that COPs will often include more cable routes, turbine locations, and grid interconnection points in a proposed project than in the final project design.

A COP will use data about the offshore wind lease area that the developer used to inform the preferred design of their project. COPs typically run hundreds of pages long and include several appendices, tables, and attachments, including:

• Data from all of the project’s site assessment surveys, studies, and investigations
• A project’s design and layout, including the number, location, and orientations of turbines, substations, and cables
• Information about any land-based infrastructure needed to support the project
• Plans to mitigate potential hazards to wildlife, marine and coastal ecosystems, national landmarks and cultural heritage sites, coastal communities, fishing communities, and more
• All of the permits that the project must secure before beginning construction
• A list of all equipment the developer will use to build the project
• A detailed timeline and schedule for when the project will be completed

A comprehensive list of the regulatory requirements for COPs is available in the Code of Federal Regulations, under 30 CFR 585.626 (a) and (b) and 30 CFR 585.627.

To learn more about COPs, we have added two helpful resources, along with one bonus resource:

• BOEM’s 2020 guidelines to develop a COP
• Example COP – Empire Wind
• BONUS: Recent COPs have also included extensive photo simulations of what projects will look like from different onshore vantage points once completed. Here is the simulation from Atlantic Shores South’s COP: 20043_VIA_Attachment E - Photosimulations (boem.gov)

In the next newsletter, we will investigate how BOEM reviews COPs and determines whether to approve an offshore wind project.

State Siting and Permitting

From CESA’s June 2026 OWA Newsletter(opens in new tab)

Here, we focus on the role that state governments play in siting, permitting, and approving key offshore wind infrastructure.

While an offshore wind project pursues construction permits from federal government agencies, it must also get permission to site key project infrastructure in state waters and lands. Within three nautical miles from shore, state governments have jurisdiction over how their waters and lands are used. Key offshore wind infrastructure falls within state boundaries, including undersea and underground electric transmission cables and onshore electrical substations that adjust the voltage and frequency of offshore wind power so that it can be used on the electric grid. In some instances, electric transmission cables might pass through multiple states’ boundaries before making landfall, meaning that the project will need to get approval from multiple states before beginning construction.

To get permission to construct infrastructure within state boundaries, offshore wind developers must go through several state-level siting and permitting processes. While every state’s processes differ, projects are typically required to get the following approvals from state government agencies:

• Permission to construct and operate transmission cables and onshore substations from a Public Utility Commission or siting board.
• Certification that infrastructure complies with state environmental rules from a state’s environmental protection agency.
• Permission to dig, dredge, and fill areas on the seabed and bury electric transmission cables from a state’s environmental protection agency.
• Confirmation that construction will not interfere with sensitive habitats or endangered species in state waters or on state lands from a state wildlife protection agency.
• Permission to conduct undersea surveys from a state archaeological resource protection agency.
• Confirmation that federal project approvals do not interfere with state law from a state’s office of coastal zone management.

Like federal siting and permitting processes, state siting and permitting processes typically provide opportunities for public education, engagement, and comment.

For state-specific information about offshore wind siting and permitting processes in Massachusetts, New Jersey, and Rhode Island, check out the Special Initiative on Offshore Wind’s Public Participation Guides(opens in new tab).