Maryland regulators have approved two projects that, if built, would place America’s two largest offshore wind farms in the waters off Ocean City.
The Maryland Public Service Commission awarded offshore wind renewable energy credits Thursday to two separate projects that would collectively generate 368 megawatts of electricity.
“The approval today of the nation’s first large-scale offshore wind projects brings to fruition the General Assembly’s efforts to establish Maryland as a regional hub for this burgeoning industry,” Commission Chairman W. Kevin Hughes said in a statement. “We have taken great care to ensure that this decision maximizes economic and environmental benefits to the state while minimizing costs to Maryland ratepayers.”
On Delmarva, the historic decision was greeted by sharply differing reactions.
Representatives of the the region’s small manufacturing sector and economic boosters applauded the commission’s approval of both projects. But several Ocean City residents and political leaders expressed disappointment Thursday, saying the turbines, which could tower up to 600 feet tall, will spoil an otherwise pristine view of the Atlantic Ocean.
In previous public hearings, wind farms were received as a positive for many Ocean City residents.
The Public Service Commission could have decided to pick one or neither of the two turbine proposals. The developers of both projects must inform the state by May 25 whether they accept the conditions of approval contained in the order.
If both are built – that’s still contingent on federal approval of several types of permits – the facilities are each projected to employ 30-50 permanent, full-time workers, said Merry Mears, director of Worcester County Economic Development.
“I am encouraged to see job creation in the county,” Mears said. “That’s what we’re focused on today, and that is those jobs will be coming.”
Together, the projects are expected to generate more than $1.8 billion of in-state spending as well as 9,700 new direct and indirect jobs, according to a Public Service Commission press release.
U.S. Wind, Inc. is set to receive incentives for 62 turbines, which it plans to build 12-15 miles offshore from Ocean City at a cost of nearly $1.4 billion. The company is a subsidiary of the Italian constructing firm Toto Holdings SpA.
The facility is expected to be operational in early 2020.
Skipjack Offshore Energy, LLC is being allowed to raise 15 turbines in an area 17-21 miles off the coast at a cost of $720 million. Skipjack, a subsidiary of Rhode Island-based Deepwater Wind Holdings LLC., hopes to have its blades spinning toward the end of 2022.
Individually, the projects are larger than the only offshore U.S. wind farm currently in operation: a five-turbine facility off Rhode Island, also developed by Deepwater.
Maryland’s establishment of the first large-scale wind farms should give it a “first-mover advantage,” said Matt Drew of Salibury-based AWB Engineers, a wind energy proponent.
The two projects will require a supply chain for specialized parts and equipment. Anticipating those investments, Maryland is requiring the developers to collectively pay at least $76 million for a steel fabrication plant in the state and fund at least $39 million to support port upgrades in Baltimore County.
“This is the one little event that started the rock rolling down the hill,” Drew said.
For its part, U.S. Wind plans to construct future phases at the Maryland offshore site, raising the number of turbines to up to 187. That would produce enough power for more than 500,000 homes, the company said.
“This decision cements Maryland as a first-mover,” said Paul Rich, U.S. Wind’s director of project development. “We will now be the epicenter of this exciting new industry for decades to come.”
In Ocean City, the decision did little to assuage concerns that the turbines would harm the resort’s biggest industry: tourism.
“These are pretty massive structures,” Town Councilman Wayne Hartman said. “I certainly do support it. I just don’t want to see it.”
On a clear day with no haze and the lighting just right, the turbines will appear on the horizon about the size of a thumbnail at arm’s length, U.S. Wind has told the town.
The Skipjack project is a little further out with the closest turbine at 19 miles and over 26 miles from the Ocean City Pier.
“We look forward to continuing our dialogue with the Ocean City community about the Skipjack Wind Farm,” said said Jeff Grybowski, CEO of Deepwater Wind in a statement. “Our goal is to build a project that the entire community is proud of.”
U.S. Wind also offered to push the farm back a few miles in an effort to work with the town’s concerns.
But that estimate doesn’t take into account the view from a condominium several dozen feet off the ground, Hartman and other critics say.
Another councilman, Tony DeLuca, had suggested that the turbines be moved 26 miles offshore.
“I think it’s a great project,” DeLuca said. “I just don’t want our residents or visitors to see them from the shoreline. I just think we have one of the most natural, beautiful views in the entire state, and I don’t want visual pollution.”
Each mile the project gets moved away from the coast would cost another $1 million, the company said. Hartman said that’s not a big investment, considering the project’s overall cost.
The Public Service Commission did take note of some of the concerns about visual pollution, one of its members said.
“We certainly recognize that there is strong public demand to make sure that sightlines to the turbines – particularly from Ocean City – are minimized to the fullest extent possible,” Commissioner Anthony O’Donnell said in a statement. “As a condition of our order, U.S. Wind is required to locate its project as far to the east (away from the shoreline) of the designated wind energy area as practical.”
Both developers also must use “best commercially available technology” to conceal the structures during the day and night, the commission said.
Spencer Rowe, an environmental consultant and longtime Ocean City resident, called the commission’s order, particularly about moving the turbines eastward, too vague to address his concerns.
“That’s meaningless,” he said. “It has no teeth.”
Each company is awarded renewable energy credit at a price of $131.93 per megawatt-hour for a term of 20 years, beginning in January 2021 for U.S. Wind and 2023 for Skipjack.
According to the Commission’s consultant, Levitan & Associates, Inc., the net ratepayer bill impacts associated with the Commission’s approval are projected to be less than $1.40 per month for residential customers and less than a 1.4 percent impact on the annual bills of commercial and industrial customers – both less than the ratepayer impacts authorized by the enabling legislation, the Maryland Offshore Wind Energy Act of 2013.
The commission attached nearly 30 conditions to the approval, including requirements that the developers create a minimum of 4,977 direct jobs during the development, construction and operating phases of the projects; pass 80 percent of any construction costs savings to ratepayers; and contribute $6 million each to the Maryland Offshore Wind Business Development Fund.
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