Over the last year Congress has been reluctant to provide assistance to offshore wind development, allowing both the Production Tax Credit and Investment Tax Credit to expire. However, an announcement last week from the Department of Energy is signaling a change in how the federal government will aid this nascent industry.
On the first of the month Energy Secretary Steven Chu announced a six-year, $180-million initiative to support promising offshore wind projects. An initial $20 million will be available this year and will go to help offshore wind energy installations across the United States.
“Developing all of our nation’s vast energy resources is an important part of President Obama’s blueprint for an American economy that uses all of America’s energy resources,” said Secretary Chu in a statement on the DOE website. “These investments are critical to ensuring that America remains competitive in this growing global industry that can drive new manufacturing, construction, installation and operation jobs across the country.”
The money for future years is still subject to congressional appropriations and could be held up by the divided congress. However, Deepwater Wind, the developer planning to install a $205 million, 30 megawatt demonstration-size wind farm within three miles of Block Island’s coast, is looking into applying for some of the DOE funds. Deepwater Chief Administrative Office Jeff Grybowski said the company is reviewing the details of the grant application, but could not say whether Deepwater would be applying or not. He did remark that there are a number of members of congress who support offshore wind and was hopeful that the grant program would continue over several years.
The Department is planning to focus this initiative on new technologies that aim to reduce costs and make it more competitive with other forms of renewable energy.
According to a report by the DOE, “this support will help lower the cost and speed the deployment of American-made offshore wind energy technologies designed for U.S. coastal conditions and provide valuable opportunities to test these innovations in real offshore environments.”
The Energy Department will allow its money to be used for up to 80 percent of a project’s design costs and 50 percent of the hardware and installation costs.
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