The energy of offshore wind is beginning to be felt in Maryland long before any of the giant turbines have been planted off the coast.
Survey vessels recently began examining the Atlantic Ocean bottom off Ocean City, as planning starts in Baltimore for what could be the largest offshore wind energy project to date in the United States – if it clears daunting financial and regulatory hurdles.
US Wind Inc., the Italian-backed company that won federal leases to develop a wind project off Maryland’s coast, has established offices in a downtown high-rise. Its executives are working simultaneously on designing the turbines to be built, lining up financing, and networking with the businesses and government agencies the company will need to make its plan a reality.
“This is the development phase,” said Paul Rich, US Wind’s manager for the Maryland offshore project, who heads a six-member team in Baltimore.
He has met with potential suppliers and servicers of the project, local and state officials and a variety of stakeholders, including commercial fishermen in Ocean City wanting to know how the project might affect their livelihood.
The company has commissioned two vessels to survey the seabed to determine its suitability for anchoring giant wind turbines in 80 to 100 feet of water more than a dozen miles offshore.
One ship, the Ocean Discovery, called in Baltimore last week to refuel, refit and take on more crew before heading out to begin what is expected to be a three-week deployment off the Atlantic coast. The British-flagged, 287-foot geotechnical survey vessel will probe the ocean bottom, drilling up to 240 feet to sample and analyze the sand and clay believed to be there.
The Ocean Discovery joins another survey vessel, the 100-foot Shearwater, which has been off Ocean City for a couple of weeks scanning the seafloor for shipwrecks or other debris in the 125-square-mile area leased by US Wind.
The survey work will help US Wind’s engineers work out the design and placement of the steel foundations for the 68 turbines it hopes to build in the first phase of its planned 500 megawatt project, Rich said.
US Wind is an arm of Renexia, an Italian renewable energy company, which itself is part of Toto Holding S.p.A., an Italian conglomerate involved in construction, including road, rail and aviation projects.
Rich, a resident of Maine, joined US Wind this year after working for Deepwater Wind on development of the nation’s first offshore wind project in Rhode Island. Construction could start this summer on five turbines, which when finished next year should supply most of the power used by Block Island, a year-round community of 1,000 that swells with tourists in summer.
“Everyone’s looking to them for success,” Rich said, “because we’ve had enough false starts in the U.S.”
Other wind projects have been proposed along the Atlantic coast in Massachusetts, New Jersey and Delaware, but all have been slowed or stalled by regulatory, political and financial challenges. Capewind, the first offshore project proposed in the U.S. in Nantucket Sound, has struggled with legal and political opposition. Utility regulators balked at approving a demonstration project off New Jersey because of the feared impact on electric rates.
Nevertheless, Rich said US Wind is “very bullish” on the prospects for offshore wind in the United States.
By year’s end, the company plans to submit a site assessment plan to the U.S. Bureau of Ocean Energy Management, the first step in fulfillment of the two leases off Maryland that US Wind won last year with a bid of $8.7 million to be paid to the federal government for the rights to use a portion of the Outer Continental Shelf.
Once federal officials approve the company’s site plan, a more detailed construction and operations blueprint would follow, possibly by 2017, Rich said. He called it “the holy grail,” as it is the last major hurdle to clear with federal regulators before construction could begin.
But finding financing could prove an even bigger challenge for a project that Rich estimates could cost $2.3 billion to build, dwarfing the $290 million cost of the Rhode Island project.
To help cover the cost, US Wind plans to file an application before summer is out for the offshore renewable energy credit that Maryland lawmakers approved to encourage such projects. The credit offers the prospect of a $1.9 billion subsidy, to be paid by consumers after the turbines are built.
To secure the credit, the company must convince the Maryland Public Service Commission that the project is feasible and would provide a net economic benefit to the state that would outweigh the subsidy.
Rich said US Wind is in discussions with businesses and government entities about participating in the project as suppliers, service providers or developers of facilities needed to manufacture, assemble and service the huge turbines. US Wind cannot just have the turbines built abroad and shipped here for assembly – the project must generate domestic investment and spending, he said, which could give Baltimore a leg up in supporting other offshore wind projects.
“That’s why this project, if it happens, would be very important to the Baltimore Inner Harbor area,” Rich said. “Once the infrastructure is built, it won’t be as economical to replace [elsewhere]. It becomes the de facto nexus of offshore wind activity in the United States.”
The prospect of being the hub for a new U.S. industry intrigues a lot of Maryland businesses, according to Liz Burdock, executive director of the Business Network for Offshore Wind. The group has organized trips to Europe for local business executives to see offshore wind projects and to meet with companies engaged in manufacturing and servicing the turbines.
Those European businesses are interested in partnering with U.S. companies on the industry’s startup in this country, Burdock said. A forum the network held last year drew more than 250 representatives of offshore wind companies, she noted, and it has yielded a handful of partnerships with local companies. The network plans another such forum in Baltimore in September, just before an offshore wind conference to be held here by the American Wind Energy Association.
“We’d like to have more progress sooner, obviously,” said Burdock, recalling that it has been four years since an offshore Maryland wind project was first broached. “We’d love to have turbines in the water next week if we could, but we understand it takes time, and [it’s important] that they do the process right.”
The company is spreading some business around already, Rich said, with perhaps $300,000 spent in fueling, provisioning, equipping and bringing together crews for the offshore surveys.
One of the local businesses getting some work was Moss Marine USA, which performs ship and industrial equipment repairs. Owner Michael Moss came aboard the Ocean Discovery one day last week to consult on supplying a needed piece of equipment.
“Wind is here,” Moss said, “and the ripple effect.”
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