Delaware took another tentative step Friday toward a possible offshore wind farm.
A 19-member advisory panel recently created by Gov. John Carney held its first meeting to examine how the state could participate in a recent boom of offshore wind projects along the East Coast.
But not all of the working group’s members are convinced such a project would be in the state’s best interests.
State Sen. Harris McDowell, D-Wilmington, warned his fellow task force members against rushing headlong into a conclusion without considering all the potential pitfalls – an approach he later compared to the 2011 deal with Bloom Energy that has cost ratepayers roughly $150 million.
Delaware approved that surcharge on Delmarva Power bills and a host of other incentives that brought Bloom Energy to Newark along with the promise of 900 high-paying jobs. To date, more than half of those jobs have yet to materialize.
“We really need to do our due diligence to make sure we’re not forcing a project into life because we want it to come,” he said. “We should do it if it makes sense and not because we dream or wish the benefits were true.”
Hashing out those details in the time allowed could prove challenging. The working group on Friday agreed to hold at least four more meetings and two public workshops between now and its Dec. 11 deadline for submitting a final report to the governor.
“What we’re trying to get out of this is some direction so we know what we’re trying to pursue and how we have to go about that,” said DNREC Secretary Shawn Garvin. “There will be a whole lot of work to do after we develop the report.”
One of the major obstacles faced by the working group will be to determine whether Delaware would be better served by a full-scale project of its own or by piggybacking on a pair of offshore wind farms recently approved in the waters off of Ocean City, Maryland.
U.S. Wind, a subsidiary of an Italian construction firm, is planning to build 62 turbines 17 miles off the coast, while Skipjack Offshore Energy is looking to add another 15. Together, those projects are expected to produce 368 megawatts of carbon-free energy to Maryland customers.
“There’s a lot more room in the territory where they’re building these wind turbines,” said Bruce Burcat, executive director of the Mid-Atlantic Renewable Energy Coalition and chair of Carney’s working group. “One concept is to potentially work with those companies and see if we can benefit from that.”
Working group member Collin O’Mara noted the benefits of an offshore wind generation could extend well beyond increasing Delaware’s supply of renewable energy with a single project.
“There’s an opportunity to do both manufacturing and build a bunch of jobs at the port,” said the former DNREC secretary who now heads the National Wildlife Foundation. “And because we’re positioned centrally … you could create a hub here. It’s a huge, huge opportunity.”
Delaware officials had visions of landing those same jobs a decade ago.
In 2008, Delmarva Power became the first utility in the country to sign a deal to buy offshore wind power. That electricity would have been produced by NRG Bluewater Wind, a company that planned to build dozens of turbines that would have generated about 200 megawatts, or enough to power 54,000 homes.
NRG Bluewater Wind even won the first lease issued by the Interior Department for an offshore wind farm about 13 miles off the coast. But the project fell apart in 2011 after certain federal loan guarantees and financing failed to materialize.
NRG has since sold its federal lease to a partnership between Deepwater Wind and PSE&G that is currently pursuing a wind farm off New Jersey’s coast.
Deepwater Wind is the same company that last year began operating the five-turbine Block Island Wind Farm off the coast of Rhode Island. The business also is one of the two companies approved to build wind turbines off the coast of Maryland.
While offshore wind has gained a toehold on the East Coast, those projects have come at a steep price.
Some estimates have put the cost of offshore wind at three to four times that of other renewable energy sources, such as solar and onshore wind – both of which enjoy federal tax credits that have not been extended to offshore wind.
Other states have helped offset those high costs by requiring utilities to purchase a portion of their electricity from offshore wind generators under lengthy contract agreements. Those deals tend to assure developers – and the banks that finance them – that the customers will be there once the project is finished.
Some, like Maryland, have instituted specific hikes in the electricity rate to further help ensure those developers have a set source of income. The $1.50 per month charge imposed by Delaware’s neighbor helped it land two offshore wind projects expected to be fully operational by 2022.
“Somewhere, somebody has got to pay extra money in order to get a wind farm off shore,” said Robert Howatt, executive director of the Delaware Public Service Commission.
“How you get that money is going to be a critical piece of our discussion,” he said. “This could become an offshore Bloom, so to speak, and that’s not where we think it would be in the best interests of the state of Delaware.”
Howatt insisted no one on the working group has any preconceived notions about whether wind power makes sense for the First State.
“We are starting off at ground zero,” he said. “Our hope is to consider all the issues in front of us … and hopefully form a consensus.”
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