Offshore wind in the United States is seemingly a Catch-22. People tend to have ideas that are either radically for or radically against this maturing technology. Some on the left tend to think of renewable energy, like offshore wind, as a panacea for climate change, while some on the right see most renewable energy as cost-intensive eyesores. The reality is that renewable energy will not solve all our environmental problems, and it is just as wondrous an experience to gaze upon as any coal or natural gas power plant in operation. What can be said for offshore wind is that it isn’t going away and the energy security and robust job market that follow this energy source are here to stay and grow.
According to 2022 data from the Energy Information Administration, despite being a net petroleum exporter, the U.S. economy continues to rely on energy imported from foreign sources. This reliance on foreign energy imports is a gap in our national security picture that could be filled with sources of renewable energy like offshore wind, bringing energy production home. As EVs grow in popularity, it’s even more critical to have sources of energy that are domestic and less susceptible to problems originating abroad.
It’s of course important that we do not eliminate all of our sources of energy from the equation. Offshore wind generation, for example, is dependent on wind strength at sea. We still will need other forms of energy generation, but offshore wind, as part of a more diverse energy mix, will make us more secure helping to safeguard the U.S. against everything from cyberattacks to physical attacks.
This is all not to mention the expanding job market across offshore wind. The job market that the industry is creating would make naysayers blush, with most facilities made to support offshore wind in deep red states, such as Nexans’ subsea cable manufacturing plant in Charleston, South Carolina and the maritime industry also benefiting, with shipbuilders in Louisiana, Florida, and Texas all hopping on board. The kicker is that these companies in red states are supporting wind farms in New York, Rhode Island, and New Jersey all deep-blue strongholds.
Offshore wind isn’t just another left-vs.-right issue. It’s something that could unite the country and allow us to become global leaders in an ever-growing industry. We are leaders in so many other fields, such as technology, healthcare, and artificial intelligence. We need to become leaders in offshore wind.
Achieving net zero is a goal that can and must be accomplished, but we cannot ignore that it will take a lot of innovation and willpower to make it happen. If every organization can contribute a piece at a time, then we will start to see real impact in reducing carbon emissions on a global scale. While some companies can reduce their emissions through direct means, the energy industry is uniquely poised to create immediate change. With the development of renewable energy sources come several challenges and opportunities, the largest being delivering sustainable energy from the locations with the highest generation potential to the areas with the highest demand. Interconnectors, massive high voltage cables that connect electrical grids, are the bridge between a carbon filled and a carbon free future.
The demand for electricity is rapidly increasing, especially with the onset of electric vehicles and the shift to global electrification of life’s daily activities. Interconnectors are like electrical super highways and can be found over land, underground, or on the sea bed. They bring enormous amounts of energy from locations experiencing a surplus to the areas that are seeing high demand. Fossil fuel-powered generation plants, which historically are the answer to high demand or diminished renewable capacity, can emit nearly a kilogram of CO2 into the atmosphere per kilowatt-hour. Two major hurdles face the grid’s advancement to a more sustainable future: the lack of large scale renewable generation sources globally combined with the lack of interconnectors.
In the United States, the electrical grid is built from the inside out. Most of the country’s natural gas and coal deposits, whose energy outputs nearly a kilogram of CO2 into the atmosphere per kilowatt hour, are found inland, creating a hub and spoke electrical grid. Offshore wind is the complete reverse, having all of its energy come from the coasts. There does not currently exist the infrastructure necessary to support large scale coastal generation and exchanging power from those regions to other regions of the country. Interconnectors are therefore crucial between states in the US and countries at a global level. The electrical grid must be rewired to adapt to the new technologies. Europe has been ahead of the game in building connections between these sources. By linking grids across international borders, energy generated carbon free can be used where it is needed.
The IFA2 interconnector between France and the UK, for example, has a total capacity of 1GW of renewable energy and decarbonizes nearly 750,000 homes on both sides of the channel; keeping more than 200,000 KG of CO2 out of the atmosphere per year. Another project, the NordLink interconnector was the first connection between the grids of Germany and Norway and exchanges nearly 1.4GW of renewable energy. In order to reach net zero, the world will require more than 40,000 miles of similar subsea cables to amplify global interconnections, as well as connections over land and underground.
In the UK, interconnectors are an essential part of the government's plans to increase the use of renewable energy sources and achieve net zero emissions by 2050. The planned North Sea Link interconnector between the UK and Norway will have a capacity of 1.4 GW and will be the longest subsea interconnector in the world when completed in 2021. The proposed Greenlink interconnector between the UK and Ireland will have a capacity of 500 MW and is expected to be operational by 2023.
Another challenge is the ability to balance a grid relying on renewable electricity. Fossil fuels, while being terrible for the environment, burn consistently and controllably. They are currently required so that the electrical grid can sustain a base load amount of generation, and to react quickly to demand changes necessary to electrify our daily activities. Consistent energy trading is the answer to this challenge, but is impossible without interconnectors. One of the key reasons for the existence of the NordLink interconnector was to exchange the excess power of Germany and Norway and as a result, the loads of the different countries were better balanced.
In all recent interconnector projects, the public and private sectors worked together to achieve a difficult, but crucial goal which showcased the importance of working together to reach net zero. Companies must be ready and willing to lead the path forward and create innovative new solutions specifically tailored for the UK market and globally. With the right investments and policies in place, we can unlock the full potential of interconnectors and move closer to a net zero future in the UK and around the world.
The free market is rushing to embrace environmental, social and governance (ESG) initiatives in an effort to both help the planet and improve the lives of billions globally. Institutional investors are also placing importance on ESG as a majority will only fund companies that primarily reflect the market’s ambition of a safe, ethical, and sustainable future. This is not a new trend that will change over the next few years, but a holistic answer to offset the impacts of the climate crisis experienced around the world.
Companies should make investments and project decisions by combining financial and environmental assessment with engagement. We need to establish a global approach rather than seeing growth and profits as impeding positive progress on climate issues. While there are several strategies that can help companies reach both financial and ESG success, both can be achieved by increasing operational efficiency while keeping employee engagement at the forefront, embracing the circular economy, and focusing on digitalization and innovation.
Companies can see immediate results towards their ESG goals by stopping the “Growth Rush.“
Increasing the customer base, product offerings, and volume doesn’t necessarily result in increasing profit. While decreasing the total number of customers, reducing the number of products, and downsizing volume seems like it would negatively impact your bottom line, it could be the opposite for your business, especially if your business is sensitive to complexity. Premium brands recognize simplification – the more complex a company, the more costs associated with production. These reductions can lead to several key ESG benefits. Increased complexity also means more CO2 output, and by scaling back, it is possible to reduce CO2 emissions. Even more surprising, making these changes can achieve better social performance results in terms of safety for example, where less products and less complexity will have a positive impact. From a social and governance perspective, simplification means better working environments for employees and more capital to deploy to boost internal engagement.
In addition to company operations, the circular economy is essential for building a sustainable future. Companies should look internally at what areas of their industry can be best solved through upcycling, recycling, and alternative product sourcing to avoid dire consequences in the future. We are facing a global strain on natural resources – including water, metal, and energy – while waste generation continues to increase. And although not all resources can be reclaimed, companies should strive to invest in recycling facilities today for the resources they’ll need tomorrow.