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Offshore wind farm area cut in half by feds

OCEAN CITY – A federal report released outlining the future of offshore wind farms off the mid-Atlantic slashed the original area off the coast by half, citing concerns about the impact on shipping traffic, but the jury is still out on what the reduction might mean for Maryland’s project.

The federal Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), an arm of the Department of the Interior charged with identifying and leasing areas off the mid-Atlantic coast for the future development of offshore wind farms, this week released an Environmental Assessment (EA), outlining several alternatives for Maryland, Delaware, Virginia and New Jersey.

The EA’s preferred alternative would reduce Maryland’s original area off the coast of Ocean City by about half, from around 206 square miles to 94, or from an original total of about 175,000 acres to just under 80,000. The preferred alternative in the EA would put the western edge of the Maryland site about 10 miles from the coast of Ocean City, while the eastern edge would lie about 27 miles off the resort’s coast.

The reduction in the Maryland wind energy area (WEA) was made after the U.S. Coast Guard and other agencies weighed in with concerns about the possible impact on the heavy shipping travel coming out of the Delaware Bay from busy ports in Philadelphia and Wilmington, for example.

In its recommendations, the Coast Guard divided the area designated off the coast of Maryland into three major categories including areas that should not be developed due to existing and anticipated future increase in vessel traffic density, areas that require further study, and areas in which wind energy development would pose minimal or no detrimental impact on navigational safety. In the final analysis, enough of the area off the coast of Ocean City fell into the first two categories to cut Maryland’s site by more than half.

State officials this week took the substantial size reduction in stride, saying the elimination does not curtail Maryland’s ambitious goals for the project.

“We don’t consider this a setback at all,” said Maryland Energy Administration spokesman Ian Hines yesterday. “It’s just the next step in an iterative process. When we get all the stakeholders at the table and sort out these issues, it’s a win-win for everybody.”

Maryland’s original plan called for the development of an offshore wind project off Ocean City’s coast capable of generating as many as 1,000 megawatts, a figure that might need to be significantly reduced if the preferred alternative is approved. Nonetheless, state officials are confident the reduced area will meet Maryland’s objectives.

“This adjustment does not reduce our goals for this project,” said Hines. “We’re extremely comfortable with it. The original area was more than enough to accomplish our objectives.”

However, the size reduction for Maryland has raised concerns from private sector developers who will potentially bid on the leases for the areas off the coast of Ocean City.

For example, NRG Bluewater Energy, which is developing a similar project off the coast of Delaware much further along in the approval and lease process, said this week the reduction in Maryland has it reconsidering its involvement.

“We’re now one of 11 bidders in Maryland competing for a much smaller area,” said NRG Bluewater President and founder Peter Mandelstam this week. “It makes it very difficult for the developers to meet their goals and the state’s goals for this project. We now need to re-evaluate the viability of the Maryland site.”

Mandelstam said the reduction clearly changes the equation for Maryland’s offshore wind goals.

“It makes it very difficult to meet the goals for job creation and the effort to keep the cost down and the rates low for the consumer,” he said.

During this year’s General Assembly session, Gov. Martin O’Malley pushed his Maryland Offshore Wind Energy Act of 2011, a plan that included developing a vast wind farm of as many as 250 turbines as close as 10 miles off the coast of Ocean City, but the bill died over concerns about the level of investment in taxpayer money in the largely private sector endeavor.
Mandelstam said the reduction of the size of the site off Maryland’s coast naturally means the number of turbines and the associated volume of energy produced would have to be reduced in kind.

“The governor talks about generating 1,000 megawatts, but this reduction cuts the area by half,” he said. “At around 80,000 acres, we’ll have to consider squeezing the turbines closer together. We’re now looking at about 450 megawatts, or maybe squeeze out 500 megawatts under the best case scenario.”

A reduction of Maryland’s site by half would also mean a reduction of the level of competition in the bidding process for the future leases.

“With the turbines three quarters of a mile apart, 79,000 acres is not that much space,” Mandelstam said. “That also probably means just one winner. The governor and his staff are very focused on job creation and clean energy production, but in order to accomplish that, Maryland needs to do a big project with robust competition.”

With less competition for a much smaller area, the ratepayers could ultimately pay more in the end despite the reduced area.

“It makes it more difficult to reduce the cost for the ratepayers,” he said. “It’s a shame because there is plenty of ocean out there.”