[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
RENEWABLE ENERGY TRANSITION: A CASE STUDY
OF HOW INTERNATIONAL COLLABORATION ON
OFFSHORE WIND TECHNOLOGY BENEFITS
AMERICAN WORKERS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON EUROPE, ENERGY, THE ENVIRONMENT AND CYBER
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
July 29, 2021
__________
Serial No. 117-72
__________
Printed for the use of the Committee on Foreign Affairs
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available: http://www.foreignaffairs.house.gov/, http://
docs.house.gov,
or http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
45-495 PDF WASHINGTON : 2021
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COMMITTEE ON FOREIGN AFFAIRS
GREGORY W. MEEKS, New York, Chairman
BRAD SHERMAN, California MICHAEL T. McCAUL, Texas, Ranking
ALBIO SIRES, New Jersey Member
GERALD E. CONNOLLY, Virginia CHRISTOPHER H. SMITH, New Jersey
THEODORE E. DEUTCH, Florida STEVE CHABOT, Ohio
KAREN BASS, California SCOTT PERRY, Pennsylvania
WILLIAM KEATING, Massachusetts DARRELL ISSA, California
DAVID CICILLINE, Rhode Island ADAM KINZINGER, Illinois
AMI BERA, California LEE ZELDIN, New York
JOAQUIN CASTRO, Texas ANN WAGNER, Missouri
DINA TITUS, Nevada BRIAN MAST, Florida
TED LIEU, California BRIAN FITZPATRICK, Pennsylvania
SUSAN WILD, Pennsylvania KEN BUCK, Colorado
DEAN PHILLIPS, Minnesota TIM BURCHETT, Tennessee
ILHAN OMAR, Minnesota MARK GREEN, Tennessee
COLIN ALLRED, Texas ANDY BARR, Kentucky
ANDY LEVIN, Michigan GREG STEUBE, Florida
ABIGAIL SPANBERGER, Virginia DAN MEUSER, Pennsylvania
CHRISSY HOULAHAN, Pennsylvania AUGUST PFLUGER, Texas
TOM MALINOWSKI, New Jersey PETER MEIJER, Michigan
ANDY KIM, New Jersey NICOLE MALLIOTAKIS, New York
SARA JACOBS, California RONNY JACKSON, Texas
KATHY MANNING, North Carolina YOUNG KIM, California
JIM COSTA, California MARIA ELVIRA SALAZAR, Florida
JUAN VARGAS, California JOE WILSON, South Carolina
VICENTE GONZALEZ, Texas
BRAD SCHNEIDER, Illinois
Jason Steinbaum, Staff Director
Brendan Shields, Republican Staff Director
------
Subcommittee on Europe, Energy,the Environment and Cyber
WILLIAM R. KEATING, Massachusetts, Chairman
SUSAN WILD, Pennsylvania BRIAN FITZPATRICK,
ABIGAIL SPANBERGER, Virginia Pennsylvania,Ranking Member
ALBIO SIRES, New Jersey ANN WAGNER, Missouri
THEODORE DEUTCH, Florida ADAM KINZINGER, Illinois,
DAVID CICILLINE, Rhode Island BRIAN MAST, Florida
DINA TITUS, Nevada DAN MEUSER, Pennsylvania
DEAN PHILLIPS, Minnesota AUGUST PFLUGER, Texas
JIM COSTA, California NICOLE MALLIOTAKIS, New York
VICENTE GONZALEZ, Texas PETER MEIJER, Michigan
BRAD SCHNEIDER, Illinois
Leah Nodvin, Staff Director
C O N T E N T S
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Page
WITNESSES
Dickson, Giles, CEO, WindEurope.................................. 6
Zichal, Heather, CEO, American Clean Power Association........... 13
Pedersen, Lars, Thaaning CEO, Vineyard Wind...................... 17
APPENDIX
Hearing Notice................................................... 39
Hearing Minutes.................................................. 40
Hearing Attendance............................................... 41
STATEMENT SUBMITTED FOR THE RECORD
Statement submitted for the record from Representative Pfluger... 42
RENEWABLE ENERGY TRANSITION: A CASE STUDY OF HOW INTERNATIONAL
COLLABORATION ON OFFSHORE WIND TECHNOLOGY BENEFITS AMERICAN WORKERS
Thursday, July 29, 2021
House of Representatives,
Subcommittee on Europe, Energy, the
Environment and Cyber,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:09 p.m., via
Webex, Hon. William R. Keating (chairman of the subcommittee)
presiding.
Mr. Keating. The House Foreign Affairs Committee will come
to order. Without objection, the chair is authorized to declare
a recess of the committee at any point, and all members will
have 5 days to submit testimony and statements, extraneous
materials, and questions for the record subject to the
limitations of our rules. To insert something into the record,
please have your staff email the previously mentioned address
that we forwarded or contact the full committee staff. Please
keep your video function on at all times, even when you are not
recognized by the chair.
Members are responsible for muting and unmuting themselves,
so please remember to mute yourselves after you have finished
speaking. Consistent with House Resolution 965 and the
accompanying regulations, staff will only mute members and
witnesses, as appropriate, when they are not under recognition,
to eliminate background noise.
I see that we have a quorum present, and I will recognize
myself for an opening statement. Pursuant to notice, we are
holding a hearing today entitled, ``Renewable Energy
Transition: A Case Study of How International Collaboration on
Offshore Wind Technology Benefits American Workers.'' I will
now recognize myself for an opening statement.
On May 10th, in the 9th District of Massachusetts, we
welcomed the long-awaited final Federal approval of Vineyard
Wind 1, the Nation's first commercial-scale offshore wind farm
and a linchpin to offshore wind all down the eastern coast of
the United States. The Biden administration's announcement
means that wind turbine construction can finally begin as soon
as next year off the coast of Martha's Vineyard, heralding a
new era of wind energy across the United States.
I am incredibly proud to represent the district that is on
the cusp of such technological innovation and work force
innovation. It is this anticipation of a burgeoning, clean, and
job-creating energy industry that inspired the organization of
this hearing today where we will seek to better understand the
current State of the United States and European offshore wind
markets, as well as how we might cooperate and more work
together more closely with our transatlantic allies to ensure
that our citizens are able to make the most of the economic
benefit of renewable energy transition.
Before I continue with my opening statement, I would like
to offer my sincere thanks to Ranking Member Fitzpatrick for
participating in this hearing. His presence here today
underscores the bipartisan support of American work force--
supports the American work force in the hope that we can
continue to work together to highlight transatlantic
cooperation as an avenue of support to our constituencies.
Now let me now turn to the topic we are all here to discuss
today, the rapid growth of the American offshore wind industry
and the lessons we can learn from the maturation of the
European market. The Vineyard Wind project is crucial and it is
the first step in the United States offshore wind, but I can
confidently say it is only the beginning. In late March, the
Biden administration announced a set of bold actions that will
catalyze offshore wind energy, strengthen the domestic supply
chain, and create good-paying union jobs.
Specifically, the administration set a goal to deploy 30
gigawatts of offshore wind in the United States by 2030.
Meeting this target will trigger more than 12 billion per year
in capital investment and create tens of thousands of good-
paying union jobs with more than 44,000 workers employed in
offshore wind by 2030, and nearly 33 additional jobs in
communities supported by offshore wind activity that the
administration hopes to generate enough power to meet the
demand of more than ten million American homes for a year and
avoid 78 metric tons of CO2 emissions.
The Biden administration's commitments to the offshore wind
industry will support an already burgeoning market. There are
currently 34 proposals for offshore wind development, which
includes 27 projects in various stages of planning and
development. The U.S. is set to see a huge growth in offshore
wind which will help mature the industry and continue,
importantly, to continue to drive costs down.
While I am incredibly optimistic about the potential growth
in the U.S. market, we must not forget that this would not be
possible had it not been for the monumental achievements of our
European partners. The first European offshore wind farm was
installed in 1991 in Denmark and since then, Europe has become
the world leader in the industry. The European offshore wind
sector attracted almost 32 billion dollars, U.S. dollars, of
investment last year, a record amount, and today, roughly
77,000 Europeans have access to high-paying union jobs in the
offshore wind industry alone.
Europe's offshore wind industry is expected to continue to
grow, in part, because of the favorable governmental policies
that exist there. The EU sees renewable energy in general, and
offshore wind in particular, as key to meeting their greenhouse
gas reduction targets and related goals.
Declining costs are also contributing to Europe's offshore
wind growth. With that being said, as we consider Europe's
progress in the offshore wind industry, we must also explore
how we here in Congress can facilitate our own nation's growth
in this critical green energy sector by understanding lessons
learned by our friends across the Atlantic.
As a proud representative of a coastal district pioneering
technological innovation and renewable technologies, I want to
do everything I can do to support the development of this
industry. That is why I have introduced legislation that
creates a Federal grant program to assist colleges and
universities, State and local governments, unions and
nonprofits, to advance an offshore wind work force.
We also have been able to secure appropriation funding for
curriculum development at the Bristol Community College's
National Offshore Wind Institute, as that is located in my
district as well. And as the chair of this subcommittee, I am
committed to exploring ways that the transatlantic alliance can
help both Europe and the United States reach their climate
goals and I hope to continue that exploration with today's
hearing.
The question now is, how can the United States and Europe
can coordinate and cooperate to maximize the growth of this
vitally important and the U.S. burgeoning industry? To answer
this critical question, my colleagues and I have invited a
group of incredibly knowledgeable experts with a diverse range
of professional experiences. They include CEO of WindEurope,
Giles Dickson; the American Clean Power Association's Heather
Zichal; and Vineyard Wind's CEO Lars Pedersen.
As longstanding experts in this field, you will be able to
give concrete recommendations on how the U.S. and the EU can
bolster cooperation in areas such as supply chain development,
foreign direct investments, and work force training. We thank
you for being here and working through, you know, seven
different roll calls occurring in the midst of this committee.
Transitioning to renewable energies presents yet another
opportunity for the American economy to lead the world on
innovation and job creation for the domestic and global work
force as well. I am honored to be working on this issue and I
welcome everyone's participation in the House Foreign Affairs
Committee's first hearing ever, first hearing ever on offshore
wind.
Now I trust we have been joined by the ranking member as he
is trying to work around his scheduling. I believe he is here.
I recognize Representative Fitzpatrick. If he is not here, we
will take Representative Fitzpatrick as he arrives given the
circumstances we are working with.
I will now introduce our witnesses, and I want to thank you
again for being here. Giles Dickson is the CEO of WindEurope,
the leading association and voice of the wind industry in
Europe. Ms. Heather Zichal is the CEO of American Clean Power
Association, the leading federation of renewable energy
companies expediting the advancement of clean energy as a
dominant power in America. Mr. Lars Pedersen is the CEO of
Vineyard Wind, a leading developer of offshore wind projects on
the outer continental shelf of the United States.
I will now recognize the witnesses for 5 minutes each.
Without objection, you have prepared a written statement and
that will become part of the official record and your remarks
can play off of that. Mr. Dickson, you will now be recognized
for your opening statement.
STATEMENT OF GILES DICKSON, CEO, WINDEUROPE
Mr. Dickson. Thank you very much, Chairman Keating, for the
invitation to testify before your subcommittee and for the kind
words that you have said about offshore wind in Europe.
Offshore wind is now 3 percent of all of the electricity we
consume in Europe. Europe has 120 operating offshore wind farms
in total, 5-1/2 thousand offshore wind turbines. It is 26
gigawatts of operating capacity today. From that number we
expect to rise by 2030 to 114 gigawatts. Beyond that the EU has
set a target of 300 gigawatts by 2050.
Why is there so much interest in offshore wind in Europe?
Of course, climate change is a key political driver, but there
is a strong recognition among governments and society that
offshore wind makes economic sense. As you have said, the costs
have come down markedly. It is now cheaper to build new
offshore wind in most of Europe than it is to build new coal,
gas, or nuclear power plants.
There are wider economic benefits as well as falling energy
bills for consumers. As you said, 77,000 jobs in Europe today.
That number is rising, we expect, to 200,000 jobs by 2030.
Every time we build an offshore wind turbine that generates, on
average, 18 million dollars of economic activity. And as you
have noted already, sir, last year, Europe invested 31 billion
dollars, despite COVID, in new offshore wind farms.
The technology continues to develop. The average size of
the turbine we are installing at the moment is around 8
megawatts. By 2030, it will be 15 megawatts. That means the
turbines are more powerful, more efficient, generating now the
capacity factors of new offshore wind farms are around 50
percent, so it is an increasingly stable form of electricity
generation.
What are the lessons we have learned? What are the
challenges we still face? And if you were to ask us what advice
would we give to you, I have five quick observations. First,
maritime spatial planning is very important. The 300 gigawatts
that the EU wants by 2050 will take up 7 percent of all of the
EU's sea space, so it is important that countries--in your
case, States--take a very long-term approach to maritime
spatial planning.
It is important also that we move away from the silo
approach to maritime spatial planning. By the silo approach, I
mean the approach whereby you do fishing activity in a certain
area, the shipping lanes are somewhere else, military activity
somewhere else, then environmental protection zones, and then
energy in some other areas. There is scope for multiple use of
the sea space between the different economic and societal
interests. Two examples: fishing. It is possible to fish inside
offshore wind farms provided it is passive or pelagic surface
fishing.
A few wider observations about fishing communities, the
offshore wind industry routinely consults fishermen about the
location and layout of offshore wind farms. We pay compensation
to them where necessary. In many countries of Europe, we, in
fact, agree up front with the fishing industry where we should
be building offshore wind farms and how much we should be
building.
We are also striving for happy coexistence with military
activity. On offshore wind turbines there are many sensors and
cameras, which are accumulating invaluable data and images, and
in some countries in Europe, we are exploring with the military
authorities how we can share this data and images with them.
My second main observation would be the importance of
investments in electricity grids. If we look how much money do
we need to spend over the coming years in Europe in offshore
wind, actually we will be spending more money on the grids than
on the offshore wind farms themselves. It is important not only
to spend money on the offshore grids, but also the
reinforcements of the onshore grids.
Third, it is so important that the permitting rules and
procedures should be as simple as possible. We try and have
one-stop shops in Europe wherever we can so the developer only
needs to deal with one single authority. Of course, in the
United States, there will always be a role for both Federal and
State authorities. I think our advice to you would be always to
ensure clear demarcation lines between their respective
responsibilities in the permitting process.
Fourth, investment in the supply chain and support for the
supply chain. The best support any administration can give to
the offshore wind supply chain is clarity about how much you
want to build in the future, and where and when the options of
the leasing rounds will take place.
With that clarity, the industry then invests in new
factories in the supply chain. And the supply chain is not just
the companies building the offshore wind farms and the
turbines, it is the shipping industry, it is the crane
manufacturers; crucially, it is the ports as well. It is so
important to invest in port infrastructure and, of course, to
invest in skills development.
Fifth and final observation, a major challenge for us in
Europe is coordinating the activity of the different national
administrations; coordinating the investments they are making
in new grid infrastructure; coordinating their rules and
regulations, for example, on health and safety, certification
of vessels, the lightings and the markings for aviation that
you put on the turbines; and coordination also of when and
where different national auctions are taking place. Thank you
very much.
[The prepared statement of Mr. Dickson follows:]
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Mr. Keating. Thank you for your remarks. Thank you for
telling what an impressive level of achievement already, and
the things that you outline we are--are issues we are dealing
with here in the U.S.
I now recognize Heather Zichal for your opening statement.
Thank you for being with us.
STATEMENT OF HEATHER ZICHAL, CEO, AMERICAN CLEAN POWER
ASSOCIATION
Ms. Zichal. Chairman Keating, Ranking Member Fitzpatrick,
members of the House Foreign Affairs Subcommittee on Europe,
Energy, the Environment and Cyber, thank you for the invitation
to testify at today's hearing. My name is Heather Zichal and I
am the CEO of the American Clean Power Association, the
national renewable energy trade association that unites the
power of offshore wind, land-based wind, solar storage, and
transmission companies.
Today we released our first Clean Power Annual, which is a
testament to the record growth in investment in the renewable
energy sector. The data shows our industry employs more than
415,000 Americans and has invested more than $334 billion in
the U.S. economy since 2005. I appreciate the House Foreign
Affairs Subcommittee's focus on the offshore wind industry.
Collaboration with Europe will allow domestic market
participants to draw from lessons learned and best practices
from a more mature European market. Smartly growing our
domestic offshore wind market and supply chain will create
hundreds of thousands of jobs in the American offshore wind
industry and unlock billions of dollars of investment allowing
to meet our climate and economic goals.
The American offshore wind industry is on the verge of
becoming a substantial source of clean energy close to the
largest population centers on the U.S. East and West Coasts.
ACP members are committed to building a thriving, successful
domestic offshore wind industry, but the American offshore wind
industry is playing catch-up to Europe and Asia. At the end of
2020, there were over 24 thousand megawatts of installations in
the Europe and the U.K., over 10 thousand megawatts in Asia-
Pacific.
While there are just 42 megawatts of domestic offshore wind
in operation today, the U.S. market has tremendous potential
with over 14,000 megawatts of offshore wind currently in
permitting and pre-construction phases. In addition to creating
jobs, to date offshore wind companies have proposed investing
at least 2.9 billion dollars across manufacturing, ports,
vessels, work force development, and research areas.
States have encouraged some of this localization of jobs
and economic benefits through the offshore wind energy
procurement process. In fact, some States such as New York, New
Jersey, Massachusetts, and Virginia are requiring offshore wind
developers to detail how hiring and sourcing of goods and
services locally would drive economic development, with an
emphasis on disadvantaged communities. These investments will
increase as more projects advance and as regulatory certainty
continues to improve, bringing enormous economic benefits to
communities across the country.
To realize these jobs and investments, Congress can help
the offshore wind industry by fully resourcing permitting
agencies, supporting work force training programs, and creating
incentives to build a domestic supply chain and offshore wind
vessels. Offshore wind investments and jobs depend, in part, on
a timely and predictable Federal permitting process. Led by the
Bureau of Ocean Energy Management, many different cooperating
agencies participate in the permitting process.
Certainty around auction timing and volume of additional
lease areas in Federal waters also provide developers and
manufacturers with the necessary confidence to make long-term
domestic supply chain decisions. To help create more market
certainty, ACP asks that Congress increase funding for BOEM and
other agencies that permit offshore wind projects, fully fund
the Port Infrastructure Development Program, and reauthorize
Title 41 of the Federal Permitting Improvement Steering Council
that helps with interagency coordination.
Manufacturing of large offshore wind components and
construction at sea requires a specialized work force. Bills
such as the Offshore Wind Jobs and Opportunity Act, which
creates a grant program to spur offshore wind work force
training, can help expedite that process. Before the completion
of a domestic supply chain and construction vessels, the
American offshore wind industry will have to use foreign
components and some specialized foreign-flagged construction
vessels. There simply is not enough time to ramp up domestic
capacity prior to an initial wave of offshore wind facilities
being constructed. And, companies were understandably not
willing to invest the billions of dollars to build vessels or a
domestic supply chain, previously given the lack of certainty
about whether offshore wind projects would ever successfully
get through the Federal permitting process to establish a
market to serve.
Additional policy levers can help drive an even greater
degree of domestic manufacturing of offshore wind components
and vessels on a more ambitious timeline. The size and cost to
transport offshore wind components makes the U.S. an attractive
market, but it will require capital-intensive manufacturing
facilities and a substantial upgrade of American port
infrastructure to accomplish.
Congress can help spur these investments by creating
incentives for facilities, equipment, vessels, and domestic
production, updating trade policy, leveraging complementary
financing pathways, and funding research and development. Thank
you for the opportunity to testify today during this historic
time for the offshore wind industry and I look forward to
answering your questions.
[The prepared statement of Ms. Zichal follows:]
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Mr. Keating. Thank you very much. Great segue in between
our witnesses. And now I am going to pass the chair to
Representative Vice Chair Spanberger, who will recognize
Representative Fitzpatrick now for his opening statement.
Ms. Spanberger [presiding]. I will now recognize
Representative Fitzpatrick for his opening statement and then
we will be continuing on with our witnesses. Thank you.
Mr. Fitzpatrick. Thank you, Madam Chairwoman and also to
Chairman Keating. Thanks to our witnesses for joining us today
to discuss ways to collaborate with our transatlantic partners
on offshore wind technologies that we hope will provide
sustainable energy resources and significant benefits to
American workers in the future.
As was alluded to earlier, wind energy is not a new concept
in the United States, but offshore wind energy is still very
much in its infancy. And while European nations are undeniable
leaders in offshore wind energy, the United States has a long
history of advancing energy development and making significant
technological strides, both individually and through
partnerships, with our European allies.
The development of offshore wind technologies is no
different, but it is vital that it not come at the expense of
other energy industries and jobs. The United States has a
strong interest in supporting research and development of
offshore wind technology. The United States not only has
tremendous wind energy potential, but it is also an important
area which we need to be a leader in in order to effectively
compete with the CCP and other entities around the world. We
need to be upfront on this technological development, not
fighting to keep up with our adversaries.
Investments in these technologies will establish the United
States presence in the competitive landscape of sustainable
energy and position us better to compete with the PRC moving
forward. However, we must remember to keep the interests of the
American workers and industries among our top priorities. We
must ensure that we have the necessary vessels and
infrastructure in place to safely and effectively develop and
install offshore wind farms and we must also be sure that we
are taking into account any potential implications on other
industries like fishing and shipping.
To that end, we must carefully evaluate the effects of
scaling this industry and the effects that it would have on our
port infrastructure and the fisheries that may be impacted by
these installations. It is my hope that our witnesses can
detail what has been done and what can be done in the private
sector to better prepare the United States and our European
partners to develop these new technologies. Thanks for being
here. I yield back.
Ms. Spanberger. Thank you. The chair now recognizes Mr.
Pedersen for his opening remarks.
STATEMENT OF LARS PEDERSEN, CEO, VINEYARD WIND
Mr. Pedersen. Chairman Keating, Ranking Member Fitzpatrick,
and members of the House Foreign Affairs Subcommittee on
Europe, Energy, the Environment and Cyber, my name is Lars
Thaaning Pedersen and I am the CEO of Vineyard Wind. I
appreciate the opportunity to testify today on how
international collaboration on offshore wind benefits American
workers.
I have been fortunate to work on commercializing offshore
wind since the early days of this industry and have worked on
more than 15 offshore wind projects in all stages throughout my
career. In the mid-2000's, offshore wind was an expensive,
niche technology in Europe and now it is the lowest cost,
fastest expanding energy sector in much of northern Europe.
What we learned in those early days was in order to drive
down costs we needed to scale up the industry in terms of
project size and technology while ensuring that bottlenecks
were addressed early on to create predictably and project
delivery. Boom-bust cycles would negatively impact the ability
for companies to make long-term investments in infrastructure
as its supply chain and work force.
Scaling up is directly tied to technology and nowhere is
this more evident than in offshore wind. Wind turbine generator
size has increased by a factor of almost six over the last 15
years. Vineyard Wind 1 will be built with a 13-megawatt
Haliade-X turbine from General Electric, the largest
commercially available wind turbine in the world. Similarly,
the liftboats have increased significantly in size, cables are
deployed with higher electrical ratings, and foundation sizes
have increased to be installed in deeper waters. Importantly,
scaling up also means expanding the pool of highly skilled,
dedicated workers engaged in developing and building safe
projects, in addition to manufacturing the needed components.
While there is certainly much that should be learned from
the experiences elsewhere, I want also to be clear that, in my
opinion, the future of the U.S. offshore wind industry is
poised to be thoroughly and uniquely American. A great example
of this, our project labor agreement with the Southeastern
Massachusetts Building Trades which was signed just 2 weeks ago
in New Bedford, Mass. It will now set the benchmark for
building offshore wind projects in the U.S. The PLA ensure us
that 500 of the 1,000 construction jobs that will be created as
a result of Vineyard Wind 1 will be good-paying, local union
jobs.
The Agreement also includes aggressive targets for
diversity, equity, and inclusion to ensure that the work force
resembles the communities where we are building the project.
Equally important to the many jobs in construction, a
significant opportunity in the long term to maximize job
creation in this industry remains in the supply chain, and for
the first project we have sought to work with U.S.-based
suppliers wherever possible. We have partnered with a company
called Linxon, headquartered in North Carolina, to provide a
substation that will connect our first project to the ISO-New
England grid, and with Southwire, headquartered in Georgia, to
manufacture and install the onshore cabling.
It is impossible to talk about offshore wind without
mentioning the Jones Act. Vineyard Wind fully supports the
Jones Act and will comply with its transport requirements;
however, as was mentioned before, due to the infancy of the
industry in the U.S., there are currently no U.S.-flagged jack-
up installation vessels large enough to install the components
for our first project.
For Vineyard Wind 1, we sought to turn these installation
challenges into opportunity. We have worked with our
international contractors to ensure that logistics other than
the specialized transport and installation vessels will be
provided by companies like FOSS Maritime, headquartered in
Seattle. FOSS Maritime will also be using union labor that will
ensure U.S. mariners get valuable experience working on the
first large-scale wind project in the U.S.
Leaning on my personal experiences from Europe growing the
industry, I see three areas where the Federal Government
working with State and local stakeholders can make a
significant impact on the future of this industry. The U.S.
offshore industry will grow at a much faster rate than the
European industry did in the early 2000's and, therefore,
addressing these challenges early on will be key.
One, offshore wind is fundamentally a marine construction
industry and the components being manufactured are such large
dimensions that they can only be transported by sea. Currently,
the eastern seaboard where most of the projects are located do
not have a significant number of ports, sufficient number of
ports with the right specifications, and significant
investments are needed to bring these port developments forward
in due time to be ready for project construction and not least
to attract manufacturing. Similarly, significant investments in
vessel capacity will also be needed which will provide
opportunities for the yachts in the Mexican Gulf with
experience from the oil and gas industry.
Two, the electrical grid needs to redesigned for a
significant inflow of power produced on the outer continental
shelf so the power can get from the coastline to the load
centers. Grid development is inherently complex to permit,
timelines are long, and regulations are complex with State and
Federal agencies overseeing permitting, access to
interconnection points, and funding of which operates off the
grid.
Three, educating and training a work force for this new
industry is essential. Thousands of workers need to be trained
for this industry in the coming years and it represents a
significant opportunity to provide well-paying jobs for coastal
communities that will eventually become lifelong careers.
The Vineyward Wind 1 project represents a giant step
forward for the U.S. offshore wind industry but it is only the
beginning. Thank you and I look forward to answering any
questions.
[The prepared statement of Mr. Pedersen follows:]
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Ms. Spanberger. Thank you very much, Mr. Pedersen. And I
now turn the chair back to Chairman Keating.
Mr. Keating. I would like to thank the vice chairman.
I will now recognize--and we are trying to do this to
accommodate voting and since she hasn't voted on this yet, we
will recognize--the chair recognizes Representative Titus, and
we will check with Representative Schneider, where he is.
Representative Titus, you have 5 minutes for your
questions.
Ms. Titus. Thank you very much, Mr. Chairman, and thank you
for holding this interesting hearing. I think we have a lot to
learn from our European neighbors about how to develop this
source of energy. We seem to be trying to move forward in
renewable, but we seem to put most of our focus on solar. That
is certainly true for Nevada. We have got lots of big, wide
open spaces and we have wind, but the wind comes in short
gusts. It is not this steady breeze that you find in some
places where the industry is so successful.
First, I wonder if there are any companies or organizations
or research and development that is looking at technology that
will accommodate those kinds of weather conditions like we have
in Nevada, and second, what can we do to partner and help
countries like Kosovo, for example? I met with some people from
there today. They are getting the political will to move off of
coal and onto renewables, but they do not have the resources to
do it. And we know if we are not there to help, China is only
too willing to step in and build infrastructures. So if you
could answer those two things, I would certainly appreciate it.
Anybody?
Ms. Zichal. Sure. I am happy to answer. I saw the chairman
was speaking and I didn't want to speak over him.
Ms. Titus. I am sorry. I didn't hear him.
Ms. Zichal. Yes. So let me answer your second question
first, and your first, and we will go from there. You know, I
think the point you make about partnering with other countries
that are committed to pursue clean energy economies is
something that is near and dear to our heart. In fact, we have
opened a dialog with the Biden administration to look at what
can they do through the international funding mechanisms,
whether that is at the EXIM or DFC, how can we make sure to--
how can we work together constructively to help other countries
decarbonize.
So I think there is obviously the, you know, like our
industries will do what we can as we have a global footprint to
help countries deploy clean energy, but I also think there is
an important opportunity to work with this administration and
that is certainly something we have prioritized at ACP. And I
think, you know, that those foreign dollars in investments can
go a long way toward meeting our broader climate goals.
And, you know, for your question about technology, I mean
the exciting thing about working in the renewable space is that
there is just ongoing, whether it is storage, whether it is
wind, solar, there is ongoing R&D, the technology continues to
get better, and part of what we released in our report today
was the significant decreases that we have seen in the costs of
wind and solar, over 70 and 90 percent, respectively.
So we are going to continue on that trajectory, but to your
point, we also know that we need to keep investing in research
and development and our companies absolutely do that. I think,
as I think about the challenge, the specific challenge in
Nevada that you pose, you know, you are right that the wind
doesn't always blow and the sun doesn't always shine, but I
also think that is really what is exciting about the storage
work that we are doing at our association, because those
storage units and the projects that we can deploy with them can
help create and store that energy so that you are evening out
your ability to deploy the electrons when and where you need
them.
So, you know, I would be happy to engage in a broader
dialog with you, Congresswoman, but that is kind of where I see
the big opportunity and the big play, frankly, coming down the
pike.
Ms. Titus. Great, thank you.
And was the chairman speaking? I didn't mean to speak over
him.
[Inaudible.]
Ms. Titus. Well, thank you then. I will yield back, Mr.
Chairman.
Mr. Keating. Thank you, Representative Titus. Just trying
to determine if Representative Schneider has voted already in
this series. Representative Schneider?
The chair recognizes then Representative Deutch for 5
minutes.
Mr. Deutch. Thanks very much, Mr. Chairman. I appreciate
it. Thanks for calling this hearing and thanks also to the
witnesses for your thoughtful and interesting testimony.
As the founder and co-chair of the bipartisan House Climate
Solutions Caucus and a Member of Congress from south Florida, I
know how, firsthand, how important it is that we embark on this
transition to renewable energy with realism as much as with
urgency. And I believe strongly--I believe strongly that
pricing carbon will help us move forward along that path.
That is why I am proud to reintroduce the Energy Innovation
and Carbon Dividend Act. By placing a price on carbon
emissions, the U.S. can reach net zero carbon emissions by 2050
and turn a hundred percent of the net revenue back to American
families. Legislation will help families afford any increase in
energy costs. But the development of green technologies is also
inextricably linked to energy security, so I am a strong
supporter of clean, renewable offshore wind energy and I
appreciated the witnesses' informative testimony.
I wanted, Ms. Zichal, I think, for you, I wanted to ask,
given that a significant portion of clean energy technologies
are manufactured using rare earth minerals, the market for that
is monopolized by China. I am hopeful that the U.S. and EU can
work to forge secure supply chains, recycling environmentally
sound domestic development of these critical minerals. So I
would ask, if I may, about the stance that EU-member countries
in supply chain, with regard to supply chain monopolization of
China and how the U.S. and EU can work together to secure
supply chains and foster domestic development of rare earth
minerals.
Ms. Zichal. Well, thank you for your leadership,
Congressman, on the broader climate agenda. As head of a trade
association that thinks about energy and climate policy every
day, we wouldn't be in the lucky place that we are without
leadership from you and others on this subcommittee. Your
question is obviously something that I wake up every day
thinking about, which is how do we both address the challenge
with China but also take advantage of this opportunity to
create jobs. And I think there is a robust dialog happening
with the administration about, you know, how do we--what is the
set of incentives that we need to build a domestic supply
chain.
And, you know, you are a thousand percent correct that, you
know, critical mineral concerns are not going away overnight.
So to that end, I think there is a couple things that we are
doing. First and foremost, looking at creating domestic supply
chains once the projects are permitted. So, you know, offshore
wind companies are looking at this opportunity and saying, OK,
how are we going to, you know, avoid the challenges that we
have today in solar and wind and make sure that we are being
really directive about our existing U.S. manufacturing
presence.
And part of what is exciting to me is that there is this
conversation happening in Congress and with the White House
about those supply chain issues and I think we have a real
opportunity with, you know, sort of some of the core elements
in the bipartisan infrastructure framework as well as some of
the components being considered for reconciliation, creating
those incentives for facilities, equipment, and vessels,
domestic production incentives; there is a suite of trade
policies as well that we are working on with the
administration.
And then funding in research and development. As you know
well, you know, thinking about what are alternatives to these
critical minerals, how do we invest in recycling, all of those
pieces of the puzzle are things that our industry is investing
on and obviously looking to leverage the important opportunity
that we have sort of with the reconciliation package to make
sure that the R&D piece of this as well as the domestic supply
chain components are front and center as we are considering our
priorities in the broader reconciliation package.
Mr. Deutch. Thanks very much. I appreciate the thoughtful
answer. And this is, for all of the broad conversations we have
about energy and renewables, this is a piece that we have to
address as we go forward if we are going to do this in a really
sustainable way.
So I appreciate the opportunity, Mr. Chairman, to engage in
this conversation. This is a really important hearing. I am
glad you are holding it. And I yield back.
Mr. Keating. Thank you, Representative Deutch.
The chair will recognize Representative Cicilline for 5
minutes.
Mr. Cicilline. Thank you very much, Chairman Keating, for
calling this hearing. And as you all know, my home State of
Rhode Island was home to the Nation's first offshore wind farm,
helping to really diversify Rhode Island's energy grid and
providing Rhode Islanders with clean and reliable electricity.
So Rhode Island is really happy to be serving as a model with
what offshore wind can mean for our future, a future free from
fossil fuels, and I know it will help inform work in other
places like Massachusetts and all throughout our country.
And as I think you know, Mr. Chairman, we are really far
behind our European counterparts in terms of installation and
China not far behind them. In 2020, the U.S. had under 50
gigawatts generated from offshore wind, while the U.K. and
China each had approximately 10,000. So we have to make real
investments and a real commitment to renewable sources of
energy and this is an opportunity, I think, for those of us in
the Northeast, particularly, to really maintain a leadership
position.
So I thank you, our witnesses. I mean Rhode Island, I
think, has a great experience with respect to balancing this
wonderful new energy source and the fishing industry. And I
think we had a really good process that listened very carefully
to the folks in the fishing industry, and I would love to know
from you, Mr.--I am not sure of the best person to answer this.
But, really, what has Europe done to work with commercial
fishing interests to ensure that they can work responsibly
while also expanding offshore wind installations, and are there
things we have to be worried about beyond commercial fishing in
terms of the broader impact to marine wildlife?
Mr. Dickson, you can----
Mr. Dickson. Yes, indeed. Thank you very much, sir, for the
question. So European offshore wind farm developers routinely
consult the local fishing industries about the location and the
layout of offshore wind farms. And there are examples of where
we have changed the layout so that they can sail their fishing
vessels between the rows of turbines to do passive and pelagic
fishing. We talked to them also about compensation for any loss
of catch that they might suffer.
But, in fact, our experience has been with offshore wind
because there are so many mollusks growing on the turbines,
there are four tons of shellfish on the foundations of each
individual offshore wind turbine. Also the seabed is
undisturbed because there is no bottom trawling, there is no
dredging going on inside the offshore wind farm, so it is good
for fish stocks, and many fishing communities end up welcoming
the presence of an offshore wind farm.
What is crucial is that there should be, in the European
case it is nationwide and perhaps in your case Statewide,
agreements between the offshore wind industry and the fishing
industry about how much offshore wind there is going to be,
where it is going to be blocked, and what the deal will be for
the fishermen. To give you one concrete example, the Dutch
Government recently invited the Dutch fishing industry and the
Dutch wind industry to a hotel on the coast of the Netherlands
for 3 days, and they did not let them out until they had
reached an agreement on the plan for offshore wind and its
coexistence with the fishing industry for the next 10 years.
Mr. Cicilline. Thank you. You know, I think one of the
other things that has been remarkable is the support in the EU
for offshore wind and for renewable energy products broadly
comes really from all across the political spectrum. And I am
wondering whether you have any advice for us, either you or Mr.
Pedersen, on how we might be more successful at managing this
kind of investment and developing, really, nonpartisan support
so that it doesn't become a partisan issue.
I mean it seems like one of the reasons the Europeans have
been so successful is, you know, everyone understands the value
of creating energy this way and we sure could use some advice
how to make this more of a bipartisan issue.
Mr. Dickson. Plugging the economic benefits especially on
job creation and proactively engaging communities that are
worried that they might be losing out from the energy
transition, thinking people working in the oil and gas
industry, coal miners, engaging those communities, re-skilling,
retraining so they can work in wind and offshore wind. We are
doing this actively in Poland, Romania, other countries in
Europe. The oil and gas industry brings a natural set of skills
and experience which serves very well in the offshore wind
industry.
But it is through engaging communities, people who fear
that they might miss out. In Europe we have this concept of the
just energy transition where we go in, in the wind industry, to
the shipbuilders in northern Poland, for example, to the coal
miners in Poland, and say, ``Look, you can come and work in our
industry,'' and this is yielding success.
Mr. Cicilline. Thank you.
And I know, Mr. Pedersen, that Vineyard Wind will have an
opportunity to access some of the great talent in Rhode Island,
particularly in the building trades, and we look forward to
making sure your project is a success. And again, I hope you
will be able to follow the example that Rhode Island set in the
way to balance the importance of renewable energy and wind with
protecting the rights of our fishing industry to continue to
thrive. So I thank you again for being here.
And thank you, Mr. Keating, for calling this hearing and I
yield back.
Mr. Keating. Thank you, Representative. The chair
recognizes Representative Pfluger for 5 minutes.
Mr. Pfluger. Yes. In lieu of making everyone listen to my
voice and the way that it sounds right now, I do have something
to submit for the record. But I will say that I want to make a
point that my district in West Texas has more wind energy in my
congressional district than the entire State of California, yet
the source, and I have talked to many European ambassadors,
this source of energy is not always reliable.
Now that may not be the case when it comes to offshore, but
onshore wind energy does not provide baseload capacity. Former
Secretary of State Kerry said that in the hearing that we had
with him recently when I asked him that question. And so I
think it is important that as we develop an all-of-the-above
approach to energy, in every European country that I talked to,
especially those that are on the front lines of Russia, are
very interested in affordable, reliable, consistent energy.
And so I appreciate this hearing, Mr. Chairman. I do have
something to submit for the record, but I said that I would
keep it short so I do not make it painful for people to listen
to me. I feel much better than I sound. So again, thank you for
holding this hearing. I do want to continue to focus on
reliability, something that we struggle with in this sector. So
I will yield back at this time. Thank you.
Mr. Keating. Thank you, Representative Pfluger. And as you
are aware, you will have the ability to submit questions for
the record in writing and get responses as well and that can be
helpful and save your voice on this subcommittee, so I
appreciate your effort.
The chair recognizes now Representative Phillips for 5
minutes.
Mr. Phillips. Thank you, Mr. Chairman, and greetings to our
witnesses. My home State of Minnesota is home to the Boundary
Waters Canoe Area. Some of you may know it is the most visited
wilderness area in the entire United States. And sulfide-ore
copper mining is proposed for the wilderness's edge and it has
the potential to flow directly into the heart of the Boundary
Waters.
And while I am deeply concerned about the possible harm to
habitats that support fish and game and thousands of jobs, I am
equally concerned about the families that have relied on high-
wage mining jobs for many generations. It is indeed a way of
life in northern Minnesota. And I do not want to dismiss the
threat that adoption of cleaner technologies poses to the
economic livelihoods of residents in my State and in many parts
of the country despite the importance of our migration to clean
energy which I wholeheartedly support.
So my question to the witnesses is, in your respective
experiences, how have you seen this change affect communities?
What steps do you think our U.S. Congress can take along with
private companies to ensure that communities who are displaced
by climate initiatives, trade, and the transition to clean
energy can be kept whole and actually prosperous in the future?
And whichever witness wants to start, I would welcome it.
Ms. Zichal. Well, Congressman, I actually worked in
Babbitt, Minnesota for four summers.
Mr. Phillips. Oh, wow.
Ms. Zichal. And know every 21-mile long shoreline of Birch
Lake, so this issue is very near and dear to me and it is also
something that I have a lot of respect for you on, right. I
understand, you know, in northern Minnesota the challenges
around identifying new job opportunities. But as I think about
what we are doing in this country today by standing up offshore
wind for the first time in this country, the kinds of the
component parts, right, I mean if you just even think about the
tens of thousands of pieces in an onshore wind turbine, we know
that pieces of those are fractured and manufactured in 48
States today.
And then you think about what the opportunity looks like
for offshore wind and it is really exciting to me because it is
not just the wind turbines. It is the fact that we are going to
need to train an entire new work force to be able to go out to
sea and build these turbines. And I think in that process we
are going to have to figure--we are going to have to do things
like the Offshore Wind Jobs and Opportunity Act so that we have
the ability to train up and create those jobs and
opportunities, whether that is, you know, in the middle of the
country or on the coasts where these offshore wind turbines are
going to be built.
Mr. Phillips. Right.
Ms. Zichal. And that is what our industry is very focused
on. I think, as I said previously, we have great opportunity
with the conversation around the reconciliation package this
year, and some of the incentives, tax policies as well as the
training programs that are going to be so, so important as we
are transitioning our work force.
And just as a random aside, I will be in your congressional
district in approximately a week and a half, so----
Mr. Phillips. Well, visit.
Ms. Zichal [continuing]. Looking forward to it.
Mr. Phillips. We are supposed to be there too, but who
knows at this stage.
Ms. Zichal. Exactly.
Mr. Phillips. I appreciate your response and I couldn't
feel--I feel exactly the same.
Mr. Dickson or Mr. Pedersen?
Mr. Dickson. Yes. And thank you very much, sir. In Europe,
onshore wind farms pay taxes to the local municipal government
so local communities are benefiting directly in a financial
way. There are some models in some parts of Europe also whereby
local citizens can take a financial share of the local wind
farm. That works in some instances, not in all instances. But
the key thing is to show the local communities as Heather has
said that, you know, they benefit from this. It brings jobs. It
brings investments. It brings revenues. And we like to think in
Europe at least that there are not many industries that are
investing in rural communities.
Mr. Phillips. Yes.
Mr. Dickson. Globalized industries tend to invest in the
large metropolises.
Mr. Phillips. Exactly.
Mr. Dickson. And the wind industry is one of the few that
is going out there into the often overlooked rural communities
around Europe creating jobs and growth and that is very
positive.
Mr. Phillips. I appreciate it. And I see my time is running
out, unfortunately, Mr. Pedersen. But I did want to raise that
issue because I know that the miners and those who are being
displaced do not want to work in call centers or work in the
local supermarket. They want jobs of a similar dynamic and a
similar interest, and I think we have a responsibility to
elevate that and ensure that we provide those opportunities.
With that I yield back, Mr. Chair.
Mr. Keating. Thank you, Representative. I now turn the
chair to our vice chairman, Ms. Spanberger.
Ms. Spanberger [presiding]. Thank you.
Thank you. The chair now recognizes Mr. Schneider for 5
minutes.
Mr. Schneider. Thank you. And I want to thank the chair and
vice chair for holding this hearing and I want to thank our
witnesses for joining us to share their experience in this
important topic. And I just want to very briefly build on what
others have already talked about and that is to make sure we
are training our work force. The investment in wind energy has
potential to create a very large number of quality jobs. We
have to make sure that the right skills trained and the people
in the right places.
And given your experience, and I will open it up to anyone
on the panel, as Europe has gone through this process, what are
some of the most important lessons we could learn as far as
overcoming obstacles and clearing pathways for people to get
the skills they need to succeed in the industry?
Mr. Pedersen. I can maybe offer just a few sort of
observations from trying to put together the supply chain and
the supplies from the first project. I think as Ms. Zichal also
alluded to, I think the ecosystem of offshore wind supply chain
is actually extremely diverse. Even for the first project, I
think we have more than 50 American companies from 21 States
responding to RFPs and delivering services and products to the
first wind farm.
And I think once this industry becomes a truly American
industry with manufacturing and engineers and scientists, et
cetera, there is a lot of industries already that have similar
and adjacent skill sets, but do not have the specific skill
sets, so I think making sure that the projects move forward,
making sure that manufacturing puts down roots in the U.S. is a
key component in doing that. And then I think there needs to be
a public-private partnership for a manufacturer of any
component to make sure that they can get assistance and quickly
getting a work force and getting a trained--I am sure Mr.
Dickson can also speak to in Europe, which I also think will be
replicated here.
We have seen a lot of ex-servicemen entering this industry
because they are used to working in, you know, cross-
disciplinary skills. They know electrical. They know
electronics. They know mechanical. And you can then fit them
into this industry because we need and then we can train them
for the specifics of offshore. So I think No. 1 is getting the
industry off and going and then the public-private partnerships
to quickly transition, because a lot of the skill sets are here
but we need to build on those and then make it specialized.
Mr. Schneider. OK, thank you.
Ms. Zichal or Mr. Dickson, any thoughts you want to expand
on that?
Mr. Dickson. If I could add to that, that it is very
important that there are clear vocational qualifications
frameworks for renewable energies and for the different
industries within them. It is important that they should be
designed with industry input and that the training and
educational establishments should be following those
frameworks. Yes, so that training people to have the skills
that the industry needs.
I would echo what Mr. Pedersen has said, ex-servicemen and
women or former coal miners make very good wind farm
operatives. It takes us only 6 months in Europe to train a coal
miner to be an onshore wind farm operative. Slightly longer for
offshore wind. But we find with people who have come from the
offshore oil and gas industry, they can be very effective in
the offshore wind industry very quickly.
Mr. Schneider. Thank you. And I do not want to--Ms. Zichal,
do you want to add something or?
Ms. Zichal. Well, the only thing that I would add quickly
is that it is not, what we are seeing early days is it is not
just the coal jobs that are transferable but, you know, for oil
and gas workers a lot of whether that is the construction of
the actual Jones Act-compliant ships that are going to go and
install these offshore turbines or the, you know, the
opportunity that basically that there is a lot of skill overlap
between the industries, and we very much as ACP are focused on
engaging with labor unions to figure out like where can we find
that sweet spot to partner together.
And I think the, you know, as things like establishing a
grant program to spur offshore training, those kinds of
policies as we are thinking about, you know, what we really
need to do to stand up this wind industry is keeping in mind
that it is a specialized work force but, you know, if we can
build from what we have today, we are going to be better off.
Mr. Schneider. Great, thank you. I am out of time. I may
submit some questions for the record, Mr. Chairman. But we
talked about service members. We have a bill we are working on
separately is Boots to Business, teaching service members to be
entrepreneurs. One thing we would like to explore is the role
of small businesses in developing Europe's offshore wind and if
there is opportunities for U.S. small businesses to take
advantage of that. And with that I yield back.
Ms. Spanberger. Thank you very much, Mr. Schneider.
The chair----
Mr. Keating. Thanks, Madam Chairman. And as it happens, now
I am going to send it back to you for your questioning, 5
minutes. Thank you for all the work you do in making this flow
so smoothly, actually.
Ms. Spanberger. Thank you.
Thank you so much. OK, perfect. Thank you so much to our
witnesses and to Chair Keating for arranging this important
hearing. It is clear that offshore wind energy can be a job and
clean energy creator and it presents a real opportunity for
transatlantic cooperation. As we approach this issue, how we
approach this issue will really shape American competitiveness
on the world stage including any relations in China.
I am proud to represent Virginia's 7th congressional
district, and while my district is not coastal, I am well aware
of the opportunity offshore wind presents to my commonwealth.
In June 2020, Virginia became the first State in the Nation to
stand offshore wind turbines in Federal waters and our State is
expected to be one of the Nation's leaders in terms of
megawatts produced. Researchers also estimate that the offshore
wind industry can create thousands of jobs in Virginia. These
are high-paying jobs and the benefits will not only be felt on
the coast.
So to followup on that point, Ms. Zichal, I was wondering
if you could speak a bit to the fact that, you know, investment
in offshore wind will certainly benefit coastal communities,
but the potential economic benefit really can extend much
farther beyond the coasts. How else can American workers and
businesses benefit from the focus on offshore wind energy and
could you briefly describe some of the downstream impacts that
will be felt throughout the United States?
Ms. Zichal. Great. Thank you for your question. I also
think it is--I want to thank you for acknowledging the
important role that States like Virginia can play when it comes
to not only solving for clean energy but also creating new
economic opportunities. That is obviously our sweet spot and
something we focus on every day.
And, in fact, we as the American Clean Power Association
did a recent analysis in looking at what if you were to deploy
30 gigawatts of offshore wind, you know, you have the
opportunity to generate about 400,000 job-years over the next
decade. And so you pair that with smart decarbonization policy
and then kind of the investments we are talking about in worker
training as well as support for, you know, manufacturing and
development in our ports, then you can really think about the
economic, those economic opportunities, you know, really taking
a meaningful role in our port communities.
But we are also as some of the other witness mentioned,
focus on what we can do to create jobs and focus on a just
transition. You asked sort of how--what other benefits are
there beyond economic benefits, and as I think about the
ability to deploy clean energy, the ability to, you know, do
that in a way that is not only looking at CO2 emissions, but in
many instances our port communities have some of the most
aggressive air quality challenges. So as I think about it,
there is the economic piece of it, but then there is the public
health and environmental aspect that I think are going to be a
real win for Americans across the country.
Ms. Spanberger. Thank you so much.
OK, perfect. Thank you so very much.
Well, Mr. Zichal, it is too bad that Mr. Cicilline was not
here to hear the wonderful shout-outs that you had for Virginia
as he spoke so lovingly about his own State.
But I was wondering in the brief amount of time that we
have left, if you could just be--you or Mr. Dickson could speak
briefly to China's rapid growth in offshore wind and how we can
ensure that the United States and Europe are best competing to
ensure that the international market is diversified. Certainly,
we see strides forward in wind energy as important, but I do
want to ensure that we are watching potential international
markets or some of the challenges that we might see with the
rise of other powers in this space.
Ms. Zichal. Absolutely. And the United States should take a
backseat to no one when it comes to the deployment of offshore
wind energy. And, you know, but the fact of the matter is we
are behind, which is why the decisions that are being made
today are so important. Because if we want to build that
domestic supply chain, if we want to be the leader we know
America can be, we are going to have to get really clear and
focused on what are the policies that we need in order to build
that opportunity out.
But also equally important is the fact that we need
certainty and predictability in the permitting process. We
cannot wait 9 years to permit a single offshore wind proposal,
right, like that is not a workable solution. So we want to
focus on working with the administration as well to figure out
how do we put in place like the permitting and leasing
processes that are going to help us lay the strong foundation
and create that certainty and predictability for this to be an
attractive place for industry to invest and build out offshore
wind.
Ms. Spanberger. Thank you very much.
Mr. Chairman, I yield back.
Mr. Keating. Again, thank you for--this has actually gone
through quite seamlessly. I put myself at the end trying to
work this through in terms of questions, so I now recognize
myself for some questions and I am glad I did. It gives me an
opportunity sometimes that I do not always have.
I would like to try this and see if this helps. If there
has been one common thread, particularly Mr. Dickson, Ms.
Zichal, you emphasized time and time again today the need for
certainty, predictability going forward. So what I would like
to do, because I know these were tough waters to cross in our
own domestic, you know, offshore wind project in Vineyard Wind,
I know a lot of things happened. I mean you mentioned certainty
of permitting. There is certainly a certainty in terms of some
of the governmental tax credits and other things that are there
to keep your capital investors together. Then unintended
consequences, whether they be legislation or legal challenges
that occur, it is very difficult.
So what I want to do is ask Mr. Pedersen, you have gone
through this and continue to go through some of these
challenges. Can you, you know, share with us some of the
challenges in terms of certainty that we will fix? This is the
first major project, commercial project, and we want to use it
not to just get through but to learn from it. So if you could
share with us some of the things you have had on your project
or some of the things you encounter going forward to get to
this point, and we have gone to a good point, and then I would
like to ask Mr. Dickson and Ms. Zichal to react to the issues
that you brought forward and maybe lessons learned.
So, first, I would like to ask Mr. Pedersen and then
hopefully have Mr. Dickson and Ms. Zichal followup.
Mr. Pedersen. Thank you, Chairman Keating. Yes, it is true
that especially the Vineyard Wind 1 project that has been
through a challenge in making sure we got through the Federal
permitting process, in particular. And I think as an example,
and I think this is well-known that originally we were put into
a Federal program that would yield an answer after 18 months
and right before the finish line there was a decision to study
a wider group of projects that then for this project meant that
we ended up taking three and a half years.
And I think solutions need to be found that there is more
predictability. No one can determine the outcome of a
permitting process or stakeholders need to be consulted and/or
voices need to be heard, but the timing is very key. And as an
example, the Vineyard Wind project in the summer of 2019 was
fully contracted. We had booked vessels because you need to do
them ahead of time. We had bought raw materials as steel and
contracted manufacturing slots. And of course that is a
significant impact both in the financials of any project, but
also for the confidence of the industry if there is not a
predictable way of getting to a decision.
So I think permitting is absolutely key. I think great
strides have been made in ensuring that the permitting is
moving forward, but it is clear that with the growth of the
industry, also stakeholder outreach, both the fishing community
that has been raised here but I would also say other
stakeholders living along the coastlines, thinking about how we
can avoid that these stakeholders that may not have as many
resources as the companies like I am representing can be heard
in a meaningful way and that hearings are not overly
repetitive, but we can also ensure that we get a meaningful
dialog across projects, across States. I think that is a key
lesson as we scale up this industry.
Mr. Dickson. One observation, Chairman, about China, if I
may. China will build a lot of offshore wind and there is
nothing we can do about that. That is what they want to do,
fine. Good. The key thing is that we remain ahead of China in
the quality of the technology and in the technology that we
apply also to integrate wind power in the wider energy system.
And there has been much discussion about the question of
reliability. Congressman Pfluger raised it. Congresswoman Titus
raised it. The offshore wind turbines now have capacity factors
of 50 percent or more so they are much more reliable than they
used to be when wind energy started. In addition, we are
investing in grid technology that helps us balance variable
supply with variable demand. And the grid investments have a
key role to play in managing the variability of wind power,
whether offshore or onshore. The wind is always going to be
blowing somewhere and the key thing is to ensure that the grid
infrastructure allows us to transmit the wind where it is
blowing to where it is needed by consumers, both household and
industrial.
Mr. Keating. Now before Ms. Zichal answers, it is just
interesting to note to the importance of domestic supply and
reliability there, because modification is necessary as
certainly there was in the Vineyard Wind project. Modification
is necessary and sometimes with China there is a history of not
being that adaptable to that modification. And that is why I
think one reason that is important to have a domestic supply is
to have that potential too, because delays could be more costly
in dealing with it. Particularly, as you were saying, Mr.
Dickson, the interfacing with the grid and some of the other
issues, it is not always a set program. So, Ms. Zichal, your
thoughts?
Ms. Zichal. Well, I think, Mr. Chairman, you are a thousand
percent spot on. As I think about what we need to do to stand
up offshore wind in this country, there is sort of three legs.
The first is supply chain incentives. How are we going to build
the supply chain here in America and create those good jobs?
The second is permitting and leasing. As I said, we need
certainty and predictability. We need to make sure that the
agencies are working together making timely decision and that
those agencies are well-funded in order to deliver against that
mandate. And then the last piece of it is that we need a
trained work force. We do not have that today, so how are going
to build that. What are the, you know, what is the role of
Congress in identifying those new opportunities and, you know,
looking at, you know the Offshore Wind Jobs and Opportunity Act
and other programs like that.
So those are the three core components and, you know, I
think that the challenge for us is whether we are in industry
or in government, is trying to figure out like what are the
collective solutions that we can bring to the table to make
sure we do not miss this opportunity or that we outsource this
opportunity to other countries like China. And that is what we
are focused on and, you know, we are really happy to have this
conversation with you today because we are not going to fix
this overnight and it is a complicated sort of 3D chess game,
but something that we are as an industry really looking forward
to working with you on going forward.
Mr. Keating. And also, I mean that is an excellent way to
summarize as we get near the end. But it also draws it into the
importance of that kind of those three-legged stools are being
in place, because I look at the Vineyard Wind project which I
am most familiar with, and just in the course of that project
technology changed and it changed dramatically. The size of the
blades, they were able to adapt. So there is not reason to
think the technology is not going to continue to change and
make things more efficient. But that requires a support system
in place as you are going through those changes.
So I mean you went through it, Mr. Pedersen, with the
change in technology, and again Europe has been ahead of the
U.S. in dealing with this and the technology changes that are
there. But how important, what do we need for a basis knowing
that technology is going to change as we go through? It is
going to be changing in Europe too going forward, but it is
going to be changing here. So what are some of the lessons
learned there?
Mr. Pedersen. Technology development is a key component in
maturing this technology and continues to drive down cost to
the benefit of ratepayers, but also making sure that we utilize
that valuable resource that is the outer continental shelf in
the most efficient way. I mean I have worked in the European
offshore wind industry and what I have seen in the U.S. over
the last 5 years is all the skills are available, you know,
there are some of the best universities in the world, some of
the most high-tech companies' manufacturing capabilities are
available, so I think if we can get a concerted effort on
putting the pillars in, and I fully agree with what Ms. Zichal
said, and then I would mention the ports, it is a marine
construction industry. We are building very large, heavy, bulky
components, and if we do not have those ports, we can't unlock
the potential that this industry has for ratepayers and also
for jobs and economic development.
So there is nothing that is missing. I am sure the
technology will transfer because the market size is large
enough and there will be a friendly competition with companies
developing technologies on both sides of the Atlantic. And I
think that is going to be the benefit of Europe and for the
benefit of the U.S. in the long run.
Mr. Keating. And I think that when you look at what has
occurred in your project, in our project in New Bedford, one of
the significant things, the Commonwealth of Massachusetts made
a major investment too in that terminal on the port to be able
to handle that ahead of time. So it shows how different levels
of government working together are important. And you have had
not just different levels of government in Europe, Mr. Dickson,
you have also had different countries involved in cooperation
in these areas. How important is that and what have you learned
from your experience?
Mr. Dickson. So one very small example, every country in
Europe has different rules, different certificates for the
health and safety of workers involved in offshore wind. That is
inefficient. It means that companies that are operating in
several countries cannot deploy their workers in all of those
countries. Each time they have to find local workers who have
the relevant health and safety certificate. And we are working
very hard with the national governments on this, ``Please align
your health and safety rules.'' Yes, it would save us a lot of
money.
One other small observation on the permitting, it is so
important that is always possible that the permitting rules
always allow the most updated recent technology to be deployed,
even if that is different from the technology that was
specified in the original permit application. If the permit
application has many years to go through, you may find yourself
lumbered with an old technology that is much less efficient
than the latest technology. You may even struggle to find
manufacturers still making those turbines. So the permitting
rules must allow that flexibility.
Mr. Keating. That is a terrific point. And when you look at
artificial intelligence and other changes that occur that is
going to be a situation.
Just to followup and close the questioning with perhaps
either Ms. Zichal or Mr. Pedersen reacting to what Mr. Dickson
had just said in terms of any analogies to State or municipal
governments and the importance of cooperation beyond the one I
cited with the Commonwealth of Massachusetts making a major
investment in that terminal in New Bedford.
Ms. Zichal. Yes, so I guess I almost, one big step back and
say, you know, look at the history of the clean energy sector.
We are a very nimble industry. Right now, today, we are putting
projects on the books that are hybrid, you know, wind plus
storage projects, and those wind turbines that technology
continues to advance. Battery technology is changing like
almost on a daily basis.
So, but what we have seen is, if we have got our, you know,
Federal regulations and our State regulations aligned and we
are able to, you know, let industry bloom because we are only
going to continue to see cost decrease and technology
improvements, it truly is about how do we take advantage of
this opportunity across the board. How do we make sure we
continue to create a nimble space for, you know, in the
regulatory environment for new technology. Those are the things
that are going to make or break us going forward.
And I guess I would just point to the very rich history of
our being able as an industry to step up and to succeed in this
space.
Mr. Keating. Any closing thoughts, Mr. Pedersen, on that?
Mr. Pedersen. So, I mean I have hardly been part of any
industry with as much excitement as the U.S. offshore wind
industry is seeing right now. I think we see tremendous
interest from global companies that want to work in this space
and I think the opportunity is here and it is now. And I think
if I take what Mr. Dickson says, I think really looking to
those small things, trying to break down the barriers that have
and can create massive inefficiencies both in terms of cost,
but also in timing to move these forward and also while still
allowing for the valuable input from all the stakeholders who
will change to their ocean environment and a changed
waterfront. I think if we can do that, I think U.S. offshore
wind is an industry with an extremely bright future. It is just
one of the best places in the world to build offshore wind.
Mr. Keating. Yes, part of my business school background is
still relevant, as old as it may be, and that is the concept of
project teams with different jurisdictions all sitting down
together in the planning stage so that you are not having one
regulatory agency or one jurisdiction make a decision and it is
not sequential, you know, so that they are waiting for that to
happen and then they are moving forward. If you can work as a
project team going forward as I saw in some instances in
Massachusetts where the State and the commonwealth was working
with Federal officials and communication and timing things, it
really could be, you know, a game changer in terms of giving
more certainty.
So on that note, I want to thank you all. This is really, I
must tell you the panel that we had just complement each other
from different perspectives in giving advice is something I
hope that we can call on in our committee in the future, the
three of you, because I found through this hearing working
through a challenging time of balancing other duties here on
Capitol Hill, I found it extremely informative as to where we
are, where to look in the future, what we can do to make things
smoother going forward.
But I hope we can count on you too to continue to give this
guidance. I think it will be extremely helpful. We have someone
going through it in the U.S. right now, someone who has a U.S.
perspective and an understanding of the Hill and politics as
well, and someone in Europe that, you know, the trailblazers in
this industry are in Europe and the similarities are there what
we can learn from that experience and hopefully what we can
cooperate together.
We mentioned at the outset, we will not have the ability,
clearly do not have it now and will not have it in the near
term of having a project, you know, having a production chain
in personnel, trained educated personnel and in certain pieces
of equipment available to us, so there is going to have to be
cooperation across the Atlantic in this regard as we build our
own production chain here in the U.S. on many of these things.
So there is great opportunities for jobs, great mutual
benefit moving forward on this, and I know that it was
important some of our members brought up the idea of China and
a reminder to us, if we stand still they continue to go
forward. And all those production chain issues that we might
have seen through the COVID pandemic, all those port issues
where they are trying to vertically integrate owning the ports,
doing this, having greater control, we are going to face those
problems if we do not move ourselves forward. And the greatest
partners to have in this are our transatlantic partners. And if
we work together on this, we will put ourselves, and when I say
ourselves, I do not just mean the U.S., the U.S. and Europe in
a much stronger position.
So I think that is one of the messages going forward as we
look at things on an international sense. And I want to thank
you. I want to thank the vice chair, if you have any closing
remarks, you are welcome. But thank you for making this a
seamless hearing, turning out much better. I even had members,
by the way, on the floor as we tried this for the first time
say, we should do this more often. This is easier. So thank you
so much for being a part of this and I hope we can count on
your wisdom and experience going forward. With that this
committee is adjourned.
[Whereupon, at 3:31 p.m., the subcommittee was adjourned.]
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