California regulator finalises plan for 7.6 GW of floating offshore wind capacity

As highlighted by OWJ, in what was described as a groundbreaking vote on 19 July 2024, the CPUC proposed a target of 7.6 GW of offshore wind procurement by the state in the next decade, a proposal that was adopted on 22 August 2024. Windfarms off the coast of California will be floating windfarms, due to water depths.

Responding to the decision, Oceantic Network founder and chief executive Liz Burdock said the CPUC’s decision has given ‘major momentum’ to the state’s offshore wind market. She highlighted the fact that the plan also involves a predictable timeline of demand that will boost supplier confidence in the market and foster investment in infrastructure. “This is a critical step towards creating a supply chain capable of meeting California’s ambitious target of 25 GW of floating offshore wind,” she said. “This decision – along with other important actions taken recently by California’s executive branch agencies – signals a firm commitment to develop floating offshore wind. This action will help attract investment and resources to ensure the state can build offshore wind out by its desired timelines and at a cost that will provide ratepayer stability over the long term.”

Also responding to the decision, Offshore Wind California executive director Adam Stern said, “We welcome the CPUC final decision to set an initial need determination of 7.6 GW for purchasing offshore wind energy at scale, to go online between 2031 and 2037. 

“This is great news for California residents, workers and ratepayers, and sends an important market signal that will help jumpstart the industry. The CPUC’s action will drive the creation of new jobs, spur needed investments, and keep California on course to deliver on its commitment to deploy a nation-leading 25 GW of offshore wind by 2045.”

Mr Stern said the CPUC’s 7.6 GW interim target to procure offshore wind at scale will help the state establish a robust supply chain and drive the economies of scale needed to make floating offshore wind an important part of California’s clean energy future.

The target is well within the 7 to 10 GW of power-generating potential that experts and the industry estimate for the five initial offshore wind lease areas off California’s Central and North Coast. 

The CPUC’s final decision recommends solicitations for offshore wind at scale begin by 2027 for delivery no later than 2037 and will enable the implementation of AB 1373 legislation approved by California lawmakers in 2023, which established a mechanism for the state to procure large-scale, long lead-time clean energy resources such as offshore wind.

Last month, the California Energy Commission approved the state’s final strategic plan to deploy offshore wind at scale, as directed by the AB 525 law signed by Governor Newsom in 2021. The plan outlines key next steps, including investments in a multi-port strategy and new transmission, efficient and timely permitting, a robust supply chain and workforce training, engaging key stakeholders, and identifying suitable sea space to reach 25 GW.

California lawmakers also approved a US$10Bn climate bond measure, SB 867, including US$475M to invest in upgrades for port infrastructure to assemble floating offshore turbines, which will go before voters as Proposition 4 in November.

A representative of the National Resources Defense Council (NRDC) agreed that the decision sends a strong signal to the market, but said it stops short of authorizing procurement of offshore wind at any price.

“The CPUC has taken initial steps to put in place conditions to achieve cost reductions,” said the NRDC. “It schedules three phases of procurement over 2027-2030 to allow learnings and cost reductions to be incorporated into bids later in the process. Additionally, the CPUC intentionally chose an amount of wind energy resource below the full lease area capacity in order to encourage competition and leave room for further cost reductions through learning and increased deployment.”