U.S. Offshore Wind Manufacturing and Supply Chain Development Prepared for: U.S. Department of Energy Navigant Consulting, Inc. 77 Bedford Street Suite 400 Burlington, MA 01803-5154 781.270.8314 www.navigant.com February 22, 2013 U.S. Offshore Wind Manufacturing and Supply Chain Development Document Number DE-EE0005364 Prepared for: U.S. Department of Energy Michael Hahn Cash Fitzpatrick Gary Norton Prepared by: Navigant Consulting, Inc. Bruce Hamilton, Principal Investigator Lindsay Battenberg Mark Bielecki Charlie Bloch Terese Decker Lisa Frantzis Aris Karcanias Birger Madsen Jay Paidipati Andy Wickless Feng Zhao Navigant Consortium member organizations Key Contributors American Wind Energy Association Jeff Anthony and Chris Long Great Lakes Wind Collaborative John Hummer and Victoria Pebbles Green Giraffe Energy Bankers Marie DeGraaf, Jérôme Guillet, and Niels Jongste National Renewable Energy Laboratory David Keyser and Eric Lantz Ocean & Coastal Consultants (a COWI company) Brent D. Cooper, P.E., Joe Marrone, P.E., and Stanley M. White, P.E., D.PE, D.CE Tetra Tech EC, Inc. Michael D. Ernst, Esq. Notice and Disclaimer This report was prepared by Navigant Consulting, Inc. for the use of the U.S. Department of Energy – who supported this effort under Award Number DE-EE0005364. The work presented in this report represents our best efforts and judgments based on the information available at the time this report was prepared. Navigant Consulting, Inc. is not responsible for the reader’s use of, or reliance upon, the report, nor any decisions based on the report. NAVIGANT CONSULTING, INC. MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED. Readers of the report are advised that they assume all liabilities incurred by them, or third parties, as a result of their reliance on the report, or the data, information, findings and opinions contained in the report. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. This report is being disseminated by the Department of Energy. As such, the document was prepared in compliance with Section 515 of the Treasury and General Government Appropriations Act for Fiscal Year 2001 (Public Law 106-554) and information quality guidelines issued by the Department of Energy. Though this report does not constitute “influential” information, as that term is defined in DOE’s information quality guidelines or the Office of Management and Budget's Information Quality Bulletin for Peer Review (Bulletin), the study was reviewed both internally and externally prior to publication. For purposes of external review, the study benefited from the advice and comments of a panel of offshore wind industry stakeholders. That panel included representatives from private corporations, national laboratories, and universities. Acknowledgments For their support of this report, the authors thank the entire U.S. Department of Energy (DOE) Wind & Water Power Program team, and in particular Cash Fitzpatrick and Gary Norton. For reviewing elements of this report or providing key input, we also acknowledge: Walt Musial, National Renewable Energy Laboratory (NREL); and Robin Newmark, NREL. Navigant would also like to thank the following for their contributions to this report: Matt Aldeman, Illinois State University; Tim Axelsson, Fishermen’s Energy; Rick Bergman, Aquilo Wind Development; Jessica Bowling, Baltimore Helicopter Services; David Bradley, Lake Effect Energy; Randy Brown, Metal Trades, Inc.; Kyoo Sung Byun, LS Cable America, Inc.; Guy Chapman, Dominion; Fara Courtney, U.S. Offshore Wind Collaborative; Michael Crist, Moffatt & Nichol; Alexander DePillis, Wind Energy Systems Engineering, Inc.; Timothy D. Downey, Saint Lawrence Seaway Development Corporation; Heinrich Duden, ep4 offshore GmbH; Dennis Duffy, Energy Management Inc.; Juan Lopez-Doriga Escalante, Rockford Berge; Fort Felker, NREL; Patrick Fullenkamp, Global Wind Network; Alice Fuchs, Mishilsolarplus; Russ Germick, Vestas Americas; Ryan Greenfield, Schaeffler Group; Parveen Gupta, Bosch Rexroth; Kim Gyr, Green Millennium; Christopher Hardy, U.S. Offshore Wind Collaborative; Christopher Haugen, ITW WindGroup; John F. Hill, GE Energy Converteam; Matthias Hofmann, SINTEF; William L. Hurley, Jr., The Glosten Associates, Inc.; Mike Ireland, Larkin Enterprises, Inc.; Philip Jacobs, Alstom Grid Solutions USA; Andrew Jacus, Dillinger Hütte GTS; David L. Jansen P.E., Janseneering, Inc.; George Kendrick, Stantec Consulting; Paul J. Kerman MS; Bradley Kerr, Detyen’s Shipyards, Inc.; Steven Kopits, Douglas-Westwood; Kerman Consulting Services; Kenneth L Kraemer, University of California, Irvine; Doug Lindsey, Lakeshore Technical College; Hao Ling, The University of Texas at Austin; Simon Mahan, Southern Alliance for Clean Energy; Todd Main, Illinois Department of Natural Resources; Christian Mertens, Bosch Rexroth; Lawrence H. Mott, SgurrEnergy Inc.; Gary Murphy, Case Western Reserve University; Natalia Nagree, Douglas-Westwood; Dennis L. Nielson, DOSECC Exploration Services, LLC; John Nikoloff, PA Energy Resources Group, LLC; Brian O'Hara, North Carolina Offshore Wind Coalition; Kris Ohleth, Atlantic Wind Connection; Rick Palmer, Weeks Marine, Inc.; Katherine Peretick, Vestas; Raoul Raffagli, Siemens Wind Power A/S; Bonnie Ram, Ram Power LLC; Jay Robison, Arkansas Economic Development Commission; Tim Ryan, Apex Offshore Wind, LLC; Stephane Sanchez, Consulate-General Kingdom of the Netherlands; Hans-Christian Schimmelmann, ABB; Philipp Schmid, SKF; Bob Schubert, Siemens; Stephan Schwab, Siemens Energy, Inc.; Geoff Sharples, CPE; Steve Sheik, Baltimore Helicopter Services; Robert Sherwin, EAPC Wind Energy; Benjamin B. Smith, Stevens Towing, Inc.; Larry Shirley, NC Department of Commerce; Duncan Sokolowski, Global Marine Energy, Inc.; Larry Viterna, Nautica Windpower LLC; Andreas Wagner , German Offshore Wind Energy Foundation; Lorry Wagner, LeedCo; Carl F. Wegener, Signal International, Inc.; Dale Williamson, Alstom Power; Chris Wissemann, Freshwater Wind; Thomas Zirngibl, TUV SUD America Inc. Table of Contents Abbreviations .......................................................................................................................................................... vii Introduction ............................................................................................................................................................ viii Executive Summary ................................................................................................................................................. x Chapter 1. Offshore Wind Plant Costs and Anticipated Technology Advancements ........................ xi Chapter 2. Potential Supply Chain Requirements and Opportunities ................................................ xiii Chapter 3. Strategy for Future Development ......................................................................................... xvii Chapter 4. Analysis of Market Entry Pathways ...................................................................................... xx 1. Offshore Wind Plant Costs and Technology Advancements ........................................................ 1 1.1 Offshore Wind Plant Cost Breakdown ............................................................................................. 2 1.1.1 Methodology ......................................................................................................................... 2 1.1.2 Plant Capital Cost Breakdown ............................................................................................ 3 1.2 Technical Trends and Anticipated Advancements ........................................................................ 4 2. Supply Chain Needs to Support U.S. Offshore Industry ............................................................. 17 2.1 Overarching Considerations ............................................................................................................ 18 2.1.1 U.S. Suppliers’ Role in the Global Wind Market ............................................................ 18 2.1.2 Regional Considerations for Offshore Wind Plant Design and Supply ...................... 20 2.2 Assumptions for Estimating Supply Chain Requirements ......................................................... 24 2.2.1 Regional Deployment Scenarios ....................................................................................... 24 2.2.2 Component and Material Requirement Assumptions ................................................... 29 2.2.3 Market Value Assumptions ............................................................................................... 30 2.3 Component-level Requirements and Opportunities .................................................................... 30 2.3.1 Framing the Potential Opportunities ............................................................................... 31 2.3.2 Offshore Wind Turbine Generators.................................................................................