This is an extract from a recent report “Global Offshore Wind Report 2023” published by Global Wind Energy Council

Last year saw significant strides in North American offshore wind with advancements and incentives introduced at federal and state level in the US, along with Canada announcing its first offshore wind target and auction. Autumn 2022 saw the Canadian Province of Nova Scotia set a target to auction off 5 GW of offshore wind energy by 2030. This is the first move towards planned offshore wind development in a country that has seen significant activity in the marine energy sector over the past several years, as well as an offshore wind moratorium that led to legal actions from affected developers. The US is on the verge of rapid expansion for offshore wind. A leap in governmental support and investment, along with ambitious plans for nationwide leases, means the industry is getting ready to unleash its true potential.

The US Inflation Reduction Act (IRA), which came into effect in August 2022, is aimed at alleviating some of these concerns by supercharging domestic energy investment and production, and ultimately changing the path for clean energy in the US. Alongside the Department of Interior’s $300 million investment, the act marked a leap in political support for offshore wind and a turning point for the United States’s journey to meeting the Biden administration’s goal of 30 GW by 2030.

The United States

The US boosts one of the most ambitious project pipelines at over 50 GW with 32 leases in active development. Most of this capacity is in early development but more than 15 GW is in advanced development. New York State has the largest capacity – almost 4 GW – in the pipeline. The 132 MW South Fork project is currently under construction. The Bureau of Ocean Energy Management (BOEM) convened two large lease auctions in 2022, one on the East Coast and the first on the West Coast generating nearly $5.4 billion in federal revenue from winning bids. In the New York Bight, BOEM’s auction of six leases lasted three days, drawing winning bids totalling nearly $4.4 billion. Further south, an auction for two leases in Carolina Long Bay generated $315 million. Finally, a much-anticipated sale of five leases off the coast of central and northern California drew winning bids totalling $757 million.

Sale prices ranged from a low of $6,147/acre to as much as $9,933/ acre, averaging $8,313/acre across six leases. High lease prices in the New York Bight can be explained by increased demand for offshore wind from two nearby states, New York and New Jersey, and well-defined offshore wind goals and procurement schedules. The lease auctions in Carolina Long Bay and California saw lower prices: $2,657/ acre on average in the former and just $1,910/acre off California. In 2018, the auction of three leases off the coasts of Massachusetts and Rhode Island yielded lease prices ranging from $1,021/ acre to $1,060/ acre.

Federal initiatives – Inflation Reduction Act

The US took a significant step forward in supporting the energy transition with the passage of the IRA last year. This comprehensive legislation aims to make clean energy more affordable and attractive; it also includes a range of measures to achieve this goal. The package provides tax incentives, grants and loans that prioritise US manufacturing and clean job creation. One of the major highlights of the IRA is its impact on the US offshore wind industry.

Recognising the need for a robust domestic supply chain, the bill allocates $386 billion in funding to reduce greenhouse gas emissions and invest in clean energy. This investment is crucial, as the US currently lacks the necessary infrastructure to meet its federal offshore wind target of 30 GW by 2030. Additionally, the global supply chain for offshore wind components and construction is expected to face constraints. To address these challenges, the IRA includes several tax credits specifically aimed at offshore wind manufacturing and infrastructure. The IRA opens up new areas for offshore wind development in the country. It lifts the previous ban on offshore wind projects in the Southern Atlantic and Eastern Gulf of Mexico, allowing for their development. Furthermore, the bill enables the development of offshore wind off US territories.

The IRA also aims to streamline the planning, permitting and execution of offshore wind projects. It provides increased funding for staffing at the BOEM and the National Oceanic and Atmospheric Administration. Furthermore, the bill includes an agreement to pass comprehensive permitting reform legislation, which will expedite the approval process for major offshore wind projects. Additionally, it stipulates that an offshore wind lease can only be finalised if an offshore oil and gas leasing sale has occurred in the previous year. Overall, the IRA plays a vital role in establishing the necessary foundations for the realisation of offshore wind energy in the US.

Planning and permitting reform

Slow permitting still remains a huge challenge in the US, for renewable projects and also for grid infrastructure. Attempts by Senator Joe Manchin to change the way big infrastructure projects that involve federal funds are approved by enacting permitting reform legislation alongside the IRA was rejected. The defeat of federal permitting reform takes place in the shadow of the passage of the IRA, perhaps Congress’s signature achievement. But as it stands, the IRA will be hard-pressed to accomplish its stated goals, primarily due to the 50-year old law National Environmental Policy Act (NEPA). NEPA mandates that all federal agencies consider environmental factors in their decision-making and involve the communities where projects are taking place. The act covers not only public infrastructure but extends to any project that requires a permit from the federal government or receives federal funding.

Despite the valuable role played by NEPA over the years, there is now a conflict between its objectives and the need to develop clean energy infrastructure. Given the urgency of the climate crisis, a diverse coalition spanning the political spectrum is raising concerns about the necessity of reforming the law.

For offshore wind, the DOI and BOEM have announced reforms to streamline processes that developers will have to navigate. However, considering that offshore development in the US is still in its early stages, only time will reveal the effectiveness of the overall process involving BOEM and state-level authorities.

Grid access and Investment

In the US, the responsibility for network investment lies primarily at the state level. However, there are federal mechanisms in place to support national infrastructure needs. For instance, the IRA includes funding provisions to assist with transmission projects – $2 billion in loan funds, covering up to 80% of the construction costs for transmission lines, and $760 million in grants to facilitate the siting of transmission lines or promote economic development in communities where such lines are planned.

Despite past instances of increased federal funding, it is important to note that grid issues, often stemming from coordination and planning challenges between Regional Transmission Organizations and Independent System Operators, have not been fully resolved. To fully leverage the benefits of the IRA, it has been estimated that there needs to be a doubling in electricity transmission infrastructure across the country. However, in the last decade, more projects have been cancelled than completed, highlighting the complexities involved in the process.

BOEM leases

In October 2021, the Secretary of the Department of the Interior, Deb Haaland, announced BOEM’s offshore wind leasing ‘Path Forward 2021–2025’, which paved the way for the offshore wind lease auction held in the NY Bight in February 2022. Following that, the agency held an auction in the Carolina Long Bay region in May 2022 and finished the year with a lease auction for two areas off California in December 2022.

State Activity

New York Bight: BOEM conducted an offshore wind lease sale on 23 February 2022, as part of its Path Forward initiative. This lease sale focused on six areas situated in the New York Bight, which refers to the oceanic area between New York and New Jersey. Remarkably, the auction resulted in winning bids from six companies that amounted to approximately $4.37 billion.

Carolina Long Bay lease sale: In its second lease sale of the year, BOEM held an offshore wind auction for two lease areas in the Carolina Long Bay on 11 May 2022. The 18-round auction lasted one day and resulted in winning bids totalling $315 million. Combined, the leases total 110,091 acres.

California lease sale : In its third and final lease sale of the year, BOEM held an offshore wind auction for five lease areas off California on 6 December 2022. The auction included two leases off the coast of northern California, near Humboldt Bay, and three leases off the Central Coast, near Morro Bay.

BOEM intends to conduct lease auctions in the Gulf of Mexico (2023), Central Atlantic (2023), Oregon (2023) and the Gulf of Maine (2024) as part of the Path Forward initiative. However, these dates could change due to possible delays.


Canada has a massive offshore wind technical potential of around 9.3 TW.48 Canada’s power grid benefits from significant amounts of clean electricity primarily hydropower while oil and natural gas energy sources dominate the total energy supply mix. In the medium to long term, harnessing the huge wealth of offshore wind energy offers significant opportunities for the country to not only achieve its own target of net zero electricity grid by 2035 and a net zero emissions economy by 2050 but can also support neighbouring countries in their clean energy goals through electricity exports. As per an NREL 2021 study, Canada would need 150 GW of wind power capacity for net zero, against a current total of 15.26 GW installed onshore wind and zero offshore.

Offshore wind projects could potentially stretch along Canada’s Atlantic and Pacific Coasts as well as the Great Lakes, since Canada has the longest coastline in the world. Most sites are suitable for floating offshore wind, with the province of Nova Scotia enjoying the world’s most competitive offshore wind resource of 10.3 m/s at 100m water depth. Other potential areas are Newfoundland and Labrador, New Brunswick, the Gulf of Saint Lawrence, and offshore British Columbia in western Canada.

Nova Scotia has made strides to kickstart offshore wind and a green hydrogen industry. In 2022, it announced it would offer 5 GW of offshore wind seabed leases through a competitive bidding process between 2025 and 2030 to support green hydrogen production. Offshore wind bids will be based on market opportunities after 2030.

The draft Nova Scotia offshore wind roadmap module 152, released in May 2023, plans a ‘request for information’ for offshore wind project developers in 2023 followed by a ‘request for proposals’ for seabed leases in 2024. Version 2 of the roadmap will address supply chain development and version 3 will address the concerns of indigenous communities, the fishing industry and other interested parties are expected in 2024 and 2025, respectively.

Nova Scotia has offshore wind resources that are ideal for floating and fixed wind. For all these reasons, Nova Scotia is a sought-after location for large scale green hydrogen production and export. It aims to release a green hydrogen action plan in 2023.

In Newfoundland and Labrador, the Canadian government awarded funding in 2021 to a project using floating wind turbines to power oil and gas assets, with the aim of reducing their carbon footprint. For informed offshore wind planning and decision-making, the governments of Canada, Newfoundland and Labrador and Nova Scotia have now initiated the Regional Assessment of Offshore Wind Development to assess future impacts.

To prioritise offshore wind and green hydrogen production commercially, Canada introduced a suite of investment tax credits in its March 2023 budget, to offset the US IRA and similarly competitive European support mechanisms. The budget includes investments made by Canada Infrastructure Bank and Canada Growth Fund. Atlantic Investment Tax Credit is another addition to support new energy generation. These are important and promising first steps to kickstart Canada’s offshore wind industry.

However, an increasingly competitive global environment for private investment means that the federal and provincial governments will have to step up and accelerate efforts to support the sector and the local supply chain. This includes identifying potential sites through offshore wind resource measurements, setting a national offshore wind target that includes commitments from all potential provinces, followed by offshore wind auctions/seabed leases pipelines. Additionally, it will be necessary to create permitting, policy and regulatory frameworks, analyse grid and port infrastructure readiness, introduce incentives to gradually reduce the higher cost of offshore wind, and finally promote coordination and collaboration between provinces, the fishing sector and offshore wind industry players.

Access the complete report here