Two years after Bluewater, offshore wind takes baby steps
Written by Aaron Nathans | The News Journal | Nov. 30, 2013 | www.delawareonline.com/
Written by Aaron Nathans | The News Journal | Nov. 30, 2013 | www.delawareonline.com/
It can no longer be said there are no offshore wind turbines off the U.S. coast.
A small floating research turbine, 65 feet high and bright yellow, was tugged into the water in May by the University of Maine, just off the remote coast of that state’s town of Castine.
The power produced, observers say, is slight, and the turbine is scheduled to be removed next year, but it is the first evidence of America’s nascent offshore wind industry.
Two years after NRG terminated its contract with Delmarva Power, the industry’s steps forward have been small indeed. Maryland is seen as a leader among the states, and there is some thinking Delaware could take part in a joint venture with its neighbor.
The technology became all the rage in Delaware in 2007 and 2008, when residents successfully demanded Delmarva Power become the first utility in the country to sign a contract to buy offshore wind power, from a large project planned off of Rehoboth Beach.
But the developer, NRG Bluewater Wind, terminated the contract after the economic downturn, and the project remains dormant.
Md. passes bill
This spring, however, lawmakers in Maryland passed an offshore wind bill. It created a program requiring ratepayers to subsidize a medium-sized offshore wind farm at a cost of no more than an additional $1.50 per month. The 200 megawatts envisioned is roughly the same size that had been planned for the Bluewater project.
Abby Hopper, director of the Maryland Energy Office, said officials in that state learned from Delaware’s experiences, and have benefited from conversations with people in government and academia in the First State.
Maryland expects a federal lease to be awarded for ocean areas off of Ocean City during the first half of 2014, and regulations for its subsidy program to be written by June.
Maryland anticipates turbines spinning by 2018. Amy Grace, lead North American wind analyst at Bloomberg New Energy Finance, called the Maryland subsidy program “a big hurdle achieved.” She said it was likely the project would come to fruition.
There is, however, one complicating factor: Federal tax credits for wind projects are once again scheduled to expire before year’s end, unless Congress renews it. In order to qualify for a federal tax credit under the existing program, offshore wind farm developers must make a down payment on their turbines, or start construction, by then, Grace said.
With no developer chosen, the Maryland program is more likely to be successful if the federal government keeps its tax credit program going past the new year, Hopper said. There are ways for it to continue in the absence of these credits, but developers need to be willing to absorb the added costs, Hopper said.
Pricey proposition
Offshore wind power still costs roughly three times what peak grid electricity costs, Grace said. Nevertheless, the jobs argument is what is giving some governors the incentive to push forward, she said. Maryland is betting it will become the next hub for U.S. offshore wind manufacturing, she said.
“It depends upon how much you want your state to be at the forefront of offshore wind, and are you willing to pay a very high price for that,” Grace said.
Collin O’Mara, Delaware natural resources secretary, said because natural gas and electricity prices have fallen, projections in 2008 that the Bluewater project would cost $2 to $3 more a month for ratepayers turned out to be incorrect. The true premium would have been more like $8 to $9 per month, he said.
O’Mara said there are ongoing discussions about regional opportunities for Delaware to participate in offshore wind power projects run by Maryland, Virginia or federal entities like the defense department, at lower prices than the Bluewater Wind project.
“It’s likely a larger state would take the lead,” although the states are so close together that the physical location of the turbines would be an open question, O’Mara said.
Of cooperating with Delaware on a joint offshore wind project, Hopper said: “We are open to any and all scenarios. There’s no wrong answers at this point.”
NRG maintains lease
David Gaier, NRG spokesman, said the company is maintaining the Bluewater Wind lease it received from the federal government, and is “continuing to seek investors or buyers. At this point we’re not actively looking to engage in other projects.”
Besides Maryland, another leading development is the Deepwater Wind pilot project off of Block Island, R.I. The developer still has some permits that need to be secured, but the project has a buyer for the power, which makes it more viable, Grace said.
Other states that saw early momentum have slowed. New Jersey, with a subsidy method similar to Maryland, has yet to finalize its rules, delaying offshore wind developments there.
And challenges have slowed the famed Cape Wind project in Nantucket Sound in Massachusetts.
Seven offshore wind pilot projects were given small planning grants by the Department of Energy late last year. They will be narrowed down to three, and will receive further funding. They include projects based in Texas, New Jersey, Ohio, Washington state, Maine and Virginia.
Those developments are on the drawing boards, but only one project has steel in the water. In May, University of Maine researchers placed a one-eighth scale floating turbine off of Castine, Maine. In June, it was connected to the power grid. It is expected to remain in the harbor until May, and will test harsh weather conditions.
Researchers dubbed the little turbine “VolturnUS,” after the Roman god of the east wind. They also liked the sound of the name, which includes the sounds “volt,” “turn” and “US.”
Grace called the single turbine in Maine a “small baby step. If you’re trying to get somewhere, any kind of step helps,” Grace said.
URL to article: https://www.wind-watch.org/news/2013/12/01/two-years-after-bluewater-offshore-wind-takes-baby-steps/