December 19, 2013
Maryland

Wind leases off Maryland coast proposed

By Timothy B. Wheeler, The Baltimore Sun | December 17, 2013 | www.baltimoresun.com

Federal officials announced plans Tuesday to auction the rights to build industrial wind turbines off Maryland’s Atlantic coast – a move hailed by many environmentalists and some businesses as the first step toward a new green industry but criticized as a drain on household budgets by the state’s lone Republican congressman.

Interior Secretary Sally Jewell joined Gov. Martin O’Malley at Baltimore’s harbor to declare that her department intends to offer leases for wind energy development on nearly 80,000 acres of the Outer Continental Shelf at least 10 nautical miles off Ocean City.

“It’s a big step forward,” said Jewell of the Obama administration’s goal of having 20,000 megawatts of renewable energy permitted by the end of the decade.

Jewell called the proposed lease sale a major milestone for the nation and for Maryland in particular. The wind energy area mapped out offshore could accommodate enough turbines to generate roughly 1,000 megawatts of electricity, enough to power 300,000 homes, she said.

The announcement marks the third competitive offshore wind sale for the Obama administration, with turbine-building rights sold earlier this year off the coast straddling Rhode Island and Massachusetts and another lease off Virginia.

O’Malley welcomed the news as a move to “create a safer and more secure energy future for our children and grandchildren.”

But he also stressed that building turbines off Maryland’s coast could create jobs and give the state a leg up in the fledgling industry. State officials contend that building turbines off Maryland’s coast could support nearly 850 manufacturing and construction jobs, plus 160 permanent positions supplying and maintaining the offshore facilities.

Environmental leaders and some business executives turned out for the announcement, which was held at the headquarters of Maritime Applied Physics Corp., an engineering firm with offices in South Baltimore and in Maine. The company’s president, Mark Rice, said he sees a potential role for his firm in helping with the complicated logistics of building and servicing turbines far offshore.

“It’s a brand new job market,” said David Lunn of D&T Welding Contractor, a small Baltimore firm, but he acknowledged it also requires “a huge learning curve.” Lunn accompanied state officials and other business executives on a tour of wind facilities in Denmark and Germany this fall.

Barring some snag, the Maryland lease sale is likely to be held late next year, though it’s uncertain when – or if – turbines would be built. Abigail Hopper, director of the Maryland Energy Administration, said state officials figure turbines could begin spinning off the state’s coast as early as 2018, but Jewell pointed out that the federal leases give developers up to five years to begin construction.

The United States has yet to see any offshore wind projects, though there are a number in Europe and Asia. The nation’s first commercial offshore wind lease, to build the 130-turbine Cape Wind project off Massachusetts, was awarded in 2010 without being put out to bid. But it has been beset by litigation and has not cleared all regulatory hurdles, so has not begun construction.

Federal investment tax credits for offshore wind are slated to expire at the end of the year, removing a substantial federal subsidy for projects that can cost billions to build. Wind advocates have called on Congress to renew the tax credits but some want the Obama administration to go further by committing federal agencies to buy the more expensive power from turbines at sea.

Jewell expressed support for renewing the tax credits, arguing that few new industries have gotten started without some form of government support.

But Rep. Andy Harris, who represents the Eastern Shore and northeastern Maryland, issued a statement criticizing the proposed sale. Every family in the state will have to pay a “wind energy tax” foisted on them by O’Malley, Harris said. The congressman also predicted that the project would add to the budget deficit through federal subsidies to the offshore wind companies – though that assumes new tax credits or something similar passes Congress.

Under O’Malley’s wind legislation, Maryland households would pay up to $1.50 a month to subsidize a wind project, while business customers could pay up to 1.5 percent more on their power bills. But the state’s electricity customers won’t pay anything, Hopper noted, unless and until turbines get built and start generating power.