Three Questions with Matt Shields, Researcher at the National Renewable Energy Laboratory

In May 2023, the National Renewable Energy Laboratory (NREL) published a report titled A Supply Chain Road Map for Offshore Wind Energy in the United States. Combined with its sibling report from 2022, titled The Demand for a Domestic Offshore Wind Energy Supply Chain, the two reports looked at the pathways for developing a domestic offshore wind supply chain and map out multiple scenarios for building 30 GW of offshore wind power by 2030.

CESA’s Sam Schacht spoke with Matt Shields, the lead author of the reports, to discuss NREL’s motivation for writing the reports and some of their findings.

CESA: What motivated NREL’s two-part supply chain report and how did your team go about putting such a large study together?

Matt: The project was primarily funded through the National Offshore Wind R&D Consortium (NOWRDC). Maryland also contributed some additional funding, and the Department of Energy (DOE) put in some more funds to refine and expand the scope. In 2019, the Business Network for Offshore Wind (BNOW – recently rebranded as the Oceantic Network) led a conference with a bunch of industry leaders and asked them about the key questions for the industry. Industry said that the number one thing they need is a pathway for the supply chain. They need to understand how we’re actually going to build these components.

The supply chain means many different things to different people. We had to keep our eye on the prize in this study, which is looking at the national scale. We really want to understand at a very broad level what the major challenges and opportunities are for the supply chain. The first step was understanding the demand side. We and BNOW talked to industry experts—project developers, tier one manufacturers, supporting suppliers—and regulatory bodies to get an understanding of what scenarios were realistic and how that shapes demand for many different components. Our partners, DNV, did a great job putting together the pipeline and some of the assumptions that were associated with that. They put together a really thorough breakdown: project by project and year by year, here are some assumptions for technology choices, turbine ratings, and things like that. And that’s what mapped to the overall demand that we look through in the project.

The last piece that I would talk about is the analysis in the report. Adding in analysis that NREL can do to answer questions like, “What’s the total investment?” “How many jobs could you create?” “What are some of the impacts if you don’t invest in the supply chain thing?” adds value. People can start to wrap their head around the challenge. NREL actually wrote some new models to do some of the analysis work, and we were able to build up some of the existing strengths we have at the lab. It was a really collaborative exercise, and it was nice to be able to put some numbers out there. Hopefully, in 2030, we can say this was something that catalyzed decision making, investment, and equitable processes.

CESA: Something that stands out about these reports is the way that you talk about building principles of equity and community engagement into the supply chain. Why was it important to you to include that piece in the studies?

Matt: It was a long process to get here. DOE encouraged us to include equity in the report, and they provided some additional funding so that we were able to. In the last few years, NREL has been ramping up its work on equity. We’ve always done stakeholder engagement work, but now we’re diving into some of the Justice 40 initiatives and what the impact of this broad clean energy deployment could mean for local communities, so I was really happy that we were able to include that. Liz Gill did an awesome job leading the study and, basically, developing a whole new framework for how to even consider equity for projects.

There has been equity work for renewable energy projects historically, but offshore wind is a little different, because you’re not building it in someone’s backyard. Because I think the some of the things you tend to hear about with offshore have to do with seeing the turbines from the shore, where the cable lands, and the coexistence with fishing and marine mammals, which are all very important questions, but the supply chain is different. You’re building a factory or you’re building a port.

When we started looking into it, one of the first things that really jumped off the map is that port communities where all this investment is going to be taking place are historically very disadvantaged in the US. There’s been a lot of inequitable treatment of these communities because industries come and go. The perfect example is at Trade Point Atlantic or Sparrow’s Point in Maryland where Bethlehem Steel used to be there. That’s a huge steel industry that went away. And now US Wind is coming back in there and is putting a monopile facility there and is trying to revitalize that industry. I think the opportunity is there for offshore wind.

A big question we asked was, “How do you maximize benefits to these communities and minimize harm as well?” You are still, to some extent, making top-down decisions. You’re bringing in an industrial facility which has pros and cons in a community. Yes, it creates jobs, yes, you’re creating clean energy components, but you might still be doing heavy steel work or you’re clearing construction land. There may be Tribal communities, for example, that have cultural sites in those areas.

CESA: Besides inflation, what would you say are some of the biggest bright spots for and challenges to the offshore wind supply chain right now in the US?

Matt: I think there are a lot of positives that are really, really encouraging, just in the last couple of years. I would start with the work that the Bureau of Ocean Energy Management (BOEM) is doing for the project pipeline. One of the most impactful things we can do for the supply chain is to try to convey certainty about how many projects there will be and when they’re coming online. A second thing is the number of announcements about manufacturing facilities that even happened before the IRA passed. And there are also other incentives, like state procurement agreements. The third thing that I would mention is the coordination between the federal government and state governments. One example is the White House-initiated federal state offshore wind implementation partnership, which is a collaborative group looking at collaborative supply chain solutions.

Some of the things that worry me the most are ports and vessels. I think they’re a massive challenge. We’ve probably identified most of the right marshaling ports on the East Coast that we need. I think that if all of those ports come online and get to their capabilities in a reasonable timeframe, we’re probably in good shape, at least for 2030-2040 timeframe. But the funding remains a challenge, and there’s not necessarily a clear path for where we’re going to get that funding. Same thing for vessels—it’s expensive to build the vessels. There’s increased complexity in terms of how you actually finance them in the first place, which leads many of them to be built on short-term contracts. It’s hard, given the uncertainty about when the projects will be built, to go to a bank and justify a return on investment or an equity investor.

Lastly, I think ongoing technology uncertainty is a challenge. Turbines are getting bigger, and I think that really stresses the supply chain. And, of course, that trickles down to the manufacturing facilities, to the ports, the vessels, the project installation, and to operations and maintenance. Technology choices drive a lot.