Changing Tides in Offshore Wind

Issue 9 and Volume 114.

By Sharryn Dotson, Online Editor

The U.S. is now making moves to get into the offshore wind business that the United Kingdom is currently leading in the number of installations and planned projects.

We all know NIMBY-ism played a big role in many offshore wind projects not being built in the United States. All that red tape, coupled with uncertainty of climate change legislation (although we now know there will not be anything in place in 2010) led to us falling behind the rest of the world. But it’s not too late to get in on the action.

With the Cape Wind project coming into fruition off the Massachusetts coast after a 10-year battle, other states say they now want to start offshore wind farms, especially with state mandated renewable portfolio standards looming. The Department of the Interior, the same department that approved Cape Wind, has signed an agreement with 10 East Coast states that establishes an Atlantic Offshore Wind Energy Consortium to promote the development of wind resources on the Outer Continental Shelf. The memorandum of understanding was signed between Interior Secretary Ken Salazar and the governors of Maine, New Hampshire, Massachusetts, Rhode Island, New York, New Jersey, Delaware, Maryland, Virginia and North Carolina.

According to the memorandum of understanding, the consortium will develop an action plan that will streamline offshore projects that span multiple states and optimize expertise across state boundaries. It will also try smooth out the process between state and federal permitting and approvals.

“By one estimate, if our nation fully pursues its potential for wind energy on land and offshore, wind can generate as much as 20 percent of our electricity by 2030,” Salazar said in a statement regarding the MOU.

The American Wind Energy Association (AWEA) thinks it is possible. Even though onshore wind installations in the first half of 2010 have dropped 71 percent compared to 2009, AWEA said the U.S. offshore wind market is growing.

According to AWEA, at the beginning of 2009, there were 5 offshore projects off the U.S. coasts but they were not in operations. At the end of 2009, there were 20.

AWEA’s U.S. Wind Industry Annual Market Report 2009 said there are 10 proposed offshore wind projects, including Cape Wind. Out of the remaining nine projects, three have been awarded exploratory leases from the Interior.

It will not be an easy battle. Two environmental groups have just filed a lawsuit against Cape Wind saying it will be harmful to the wildlife, specifically whales and the birds in the area.

To add to the fight for Cape Wind, Massachusetts Attorney General Martha Coakley in July asked Cape Wind’s developers to disclose cost and profit estimates for the project, saying that “underlying construction and operating costs of Cape Wind and profits to the project’s investors” will help officials assess the project. The Attorney General’s office is concerned that a contract signed between National Grid and Cape Wind could have customers coming out of pocket more than they should. Both sides have since agreed to cut proposed rates by 10 percent, from 20.7 cents/kWh to 18.7 cents/kWh.

Although the battle over Cape Cod is brewing, some states are still seeing the good side in offshore wind. On July 26, Rhode Island and Massachusetts signed a memorandum of understanding to work together on a plan for offshore wind off the coast of Rhode Island. The two governors signed the MOU to coordinate planning of offshore wind projects using a Rhode Island ocean-zoning plan, the Special Area Management Plan or SAMP, as a guide to development.

Several wind energy projects for the Atlantic Outer Continental Shelf have been proposed for East Coast states, positioning the region to tap into the 54,000 MW of potential wind power in the U.S., according to a report from DOE. Developing this resource could create thousands of manufacturing, construction and operations jobs and displace older, inefficient fossil-fueled generating plants.

Task forces have been formally established with Rhode Island, Massachusetts, New Jersey, Virginia, Delaware and Maryland, and are in process for New York, South Carolina and Florida.

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