The deal was reached as part of an agreement that allowed NSTAR to merge with Northeast Utilities. Two years ago, Massachusetts regulators approved Cape Wind’s contract to sell 50 percent of its power to National Grid. According to the company, these combined power purchase agreements are sufficient for construction to begin.

The three hearings will be held in Natick, MA, on May 22, Barnstable, MA, on May 23 and Boston on May 30.

Delaware Official Backs Transmission Backbone

Delaware Natural Resourcs Secretary Collin O’Mara said the Atlantic Wind Connection offshore wind transmission backbone could be a boon to the region even without a local offshore wind project, the Wilmington News-Journal reported today.

Bluewater Wind had planned a project off the Delaware coast, but that project was scuttled late last year.

According to the report, O’Mara said the project could bring down electricity rates. He also cautioned, however, that more negotiation was needed with regional grid operator PJM Interconnection.

The project is designed to connect offshore wind projects along the Atlantic seaboard, removing the need for each project to built a separate connection to the grid.

“The first-of-its-kind Atlantic Wind Connection is an encouraging sign of significant industry interest in developing the infrastructure to support offshore wind development,” said Deputy Interior Secretary David Hayes. “It’s the type of project that will spur innovation that will help us stand-up a clean energy economy to power communities up and down the east coast.”

Hayes announced the project along with BOEM Director Tommy Beaudreau. BOEM regulations require the agency to determine if there is any competition for a particular plot or project. If there is none — as in this situation — the permitting process becomes dramatically more streamlined.

“Our next step will be to evaluate the potential environmental impacts of issuing a renewable energy right-of-way grant for this project,” Beaudreau said.

The first phase of the proposed transmission project would run from New York City to Virginia Beach. In a press release, the company applauded the BOEM permitting process.

The federal Bureau of Ocean Energy Management is considering a proposal to develop an offshore wind project on the outer continental shelf off New York’s Long Island.  Proposed by a collaborative composed of three New York City-area utilities, the Long Island – New York City Offshore Wind Project would be located in federal waters about 13 nautical miles south of Long Island and east of New Jersey.

The collaborative promoting the project involves a “public-private partnership”, a trendy catchphrase that connotes a mix of public interest and private money.  The collaborative includes two public power authorities – the New York Power Authority and the Long Island Power Authority – as well as investor-owned utility Consolidated Edison of New York.

Created in 1931, the New York Power Authority is a political subdivision of the State of New York.  NYPA generates, transmits, and sells about 25% of the electric power and energy consumed in New York, making it the Empire State’s largest public power organization.  Overall, NYPA controls electric generation facilities with a total installed capacity of 6,054 megawatts; in 2010, NYPA generated 24.4 billion kWh of electricity, primarily from hydropower projects.  NYPA had previously pursued an offshore wind project in New York’s piece of the Great Lakes, but its Great Lakes Offshore Wind project was scrapped in the fall of 2011 amid a leadership change and concerns that high costs would make it unfeasible.

Like NYPA, the Long Island Power Authority is also a political subdivision of the State of New York.  A non-profit municipal electric utility formed in 1985 to take over the assets of former investor-owned utility Long Island Lighting Company, LIPA owns the electric grid in most of Long Island.  LIPA does not own electric generation assets on the island but serves 1.1 million customers with electricity generated off-island.

Consolidated Edison Company of New York, Inc. is a subsidiary of Consolidated Edison, Inc., one of the nation’s largest investor-owned energy companies.  At the parent level, ConEd generates about $13 billion in annual revenues off an asset base of $39 billion.  Consolidated Edison Company of New York is the regulated investor-owned utility providing electric service to almost all of New York City and most of New York’s Westchester County.

Together, these entities represent the three largest electric utility providers in the Long Island – New York City region.  Their plans for an offshore wind project currently rest on an unsolicited lease request NYPA submitted to the BOEM in September 2011.  Because BOEM regulations required the lease to be held in the name of one entity, and because New York law restricts LIPA from holding a lease in federal waters, the collaborative members chose NYPA to be the lead applicant on behalf of the collaborative.

The collaborative’s proposal identified a cone-shaped project area constrained by two of the many marine navigational routes, or traffic separation schemes, leading to New York City.  The project area is thus narrowest at its northwest corner, closest to the city, and widens as it extends to the southeast.  The initial project area would cover about 81,500 acres of sea space, and would start with a 350 MW capacity, expandable to 700 MW.  For the full 700 MW buildout, the collaborative expects up to 194 turbines each rated at 3.6 MW, or 140 turbines each rated at 5 MW.  Because water depths range from 60 to 120 feet, turbines are expected to be mounted on towers attached to the sea floor (using monopile, gravity, or tripod technology).  If BOEM awards the requested lease to NYPA, the collaborative’s members plan to seek proposals from private development firms to build the project, turn the lease over to the winning bidder, and enter into agreements to purchase the project’s output.

BOEM is currently reviewing the proposal, and has determined that NYPA is legally, technically, and financially qualified to hold a lease.  Under BOEM’s leasing process, when presented with an unsolicited lease request, BOEM will issue a Request for Competitive Interest.  That step could occur as soon as the summer of 2012.  If, after reviewing the responses to that request, BOEM determines that there is no competitive interest in the area sought by NYPA, the collaborative would move forward with the development of a plan to assess the site and BOEM would begin to prepare an environmental analysis for lease issuance and site characterization studies.

If all goes according to the collaborative’s plan, a lease could issue as early as 2013, with construction possible in 2017 and commercial operation targeted for 2018.  These projections depend on a number of contingencies, including a lack of competition for the site, regulatory approvals, and financing.  The project also depends on continued public and political support for the project, which failed to materialize for NYPA’s earlier Great Lakes offshore wind project.  Nevertheless, if successful, the Long Island – New York City Offshore Wind Project could represent one of the first public-private partnerships to achieve the development of offshore wind in United States waters.

Todd J. Griset practices energy law with Preti Flaherty Beliveau & Pachios in Maine. He also writes a blog on offshore wind, renewable energy and policy issues.

The malfunctioning gearboxes are expected to cost Vestas over 40 million euros, which it will attempt to recoup from the gearbox supplier.

Additionally, in order to align the development of the massive 7 MW turbine to the company’s new offshore wind production outlook, Vestas has delayed the proposed installation of the 7 MW prototype in Denmark to 2014 at the earliest.

Trump Claims Scottish Wind Farm Will Destroy Tourism

Noted American businessman and bankruptcy enthusiast Donald Trump recently wrote a letter to Scottish First Minister Alex Salmond in which Trump warned that the First Minister was “single-handedly destroying the economic well-being of a great country” by supporting an offshore wind farm near Trump’s proposed luxury golf resort in Aberdeenshire.

In his letter, Trump encouraged First Minister Salmond to “stop your mad march into oblivion with these very expensive and highly inefficient (and extremely ugly) industrial turbines”.

Last November, the Bureau of Ocean Energy Management (BOEM) announced that it had received an unsolicited application for a deepwater test project from Norwegian energy giant Statoil. The proposed project would consist of four three-megawatt floating turbines located roughly 12 nautical miles south of Boothbay Harbor in the Gulf of Maine.

Stakeholder reaction at the time of the announcement was mixed, and apparently doubters remain on the Maine Public Utilities Commission (PUC). According to the Aftenbladet report, Statoil officials recently met with the PUC and determined that support at the state level was insufficient to begin construction on the test project.

However, a Statoil executive interviewed by Aftenbladet seemed optimistic about a 2016 production goal for the test project, as well as floating technology in general in the United States.

“The US is more interested in floating windmills than fixed. Statoil will be making a decision in 2014 should the framework conditions be in place. We are now in the process of conducting environmental studies, we have been in contact with an interest association for local organizations, and we know that local industry in the U.S. has the capacity to deliver,” Ståle Tungesvik, Statoil senior vice president for reserves and business development, told Aftenbladet.

The lack of certainty over Production Tax Credits (PTC) and Investment Tax Credits (ITC) may also be delaying the project. According to the Aftenbladet report, Mr. Tungesvik has been in touch with authorities in Washington, D.C., to lobby for the financial support the project needs to progress.

As the spring season hits North America, some coastal states’ legislatures are wrapping up their work for the session – and at least one proposed state offshore wind program did not receive legislative approval before legislators returned home for the summer.

Despite the support of the state’s House of Delegates, Maryland Gov. Martin O’Malley’s Offshore Wind Energy Act failed to receive a key vote by the Senate Finance Committee before the legislature adjourned.

This is not the first time that a major Maryland offshore wind bill has died in a legislative committee without being enacted by the General Assembly. The story of Gov. O’Malley’s repeated efforts to encourage the enactment of offshore wind legislation may hold lessons for future efforts in Maryland as well as in other states.

Gov. O’Malley floated his first offshore wind proposal in 2011. House Bill 1054, the Maryland Offshore Wind Energy Act of 2011, required developers to compete before the Maryland Public Service Commission for long-term contracts with the state’s four investor-owned electric companies.

In O’Malley’s 2011 vision, private developers would construct 400 to 600 MW of offshore wind capacity, located at least 10 nautical miles offshore Maryland or within nearby federal waters. Because these contracts would likely have been costlier to ratepayers than the status quo, especially in early years, the 2011 bill would have imposed a special charge on customers to equitably divide the cost of offshore wind.

However, the extent of those costs was a subject of key concern to the General Assembly. Estimates of the average monthly increase in residential bills ranged between $2.16 and $8.70, and some legislators questioned whether Maryland would benefit from economic development as a result of the bill. After being referred to the Senate Finance Committee, the 2011 bill died without a full vote of either legislative chamber.

In January 2012, Gov. O’Malley tried again, unveiling his revised plan for offshore wind development off Maryland. That bill, the Maryland Offshore Wind Energy Act of 2012, was filed in the House of Delegates as House Bill 441 and in the Senate as Senate Bill 237.

Based on the criticisms of last year’s proposal, the 2012 act took a different approach. Instead of requiring utilities to enter into long-term contracts for offshore wind, O’Malley’s 2012 bill featured a renewable portfolio standard for offshore wind. The bill required utilities to source 2.5% of the electricity they serve from offshore wind, starting in 2017. Utilities would have been free to satisfy this standard in several ways, buying offshore wind renewable energy credits (ORECs) from project developers or developing qualifying projects themselves.

In response to cost concerns, the 2012 Maryland offshore wind bill featured both a lower estimated cost – $1.50–2.00 on an average residential consumer’s monthly bill – as well as a cost-containment mechanism. Under the initial 2012 proposal, the Maryland Public Service Commission would suspend the program if it projected cost increases of more than $2 a month.

Polling suggested strong public support for the measure, along with the support of organized groups ranging from environmental advocates to labor unions. The bill also received significant support in the House of Delegates, but not in the Senate. Although the Senate held a public hearing on the SB 237 on February 14, the Senate bill never moved through the legislative committee process.

Meanwhile, the House held hearings on HB 441; the House bill was then amended to cap cost increases at $1.50 per month for residential customers (or 1.5% for commercial and industrial customers), and finally passed the House as amended with strong support in late March by a vote of 88-47.

At that point, the bill was referred to the Senate, which in turn referred it to the Senate Finance Committee on April 5 – where the bill stalled without a vote, and ultimately died last week without approval of both legislative chambers of the Maryland General Assembly.

So what happened in the Maryland Senate Finance Committee? The committee is formed of eleven senators, so six favorable votes were needed for the bill to pass through to the full Senate for a vote. Committee Chairman Senator Thomas Middleton had indicated that he would not hold a vote on the bill unless it had the firm support of a majority of committee members. At the beginning of April, with just two weeks left prior to adjournment, sources reported that the committee was one vote short of passage.

Despite significant lobbying and grassroots protests (at one point over 400 activists circled the Capitol building to show support for the bill), in the end supporters could not convert any of the three Republicans and three Democrats dissenting on the committee. Some observers quickly pointed to “petty power politics in Annapolis” to explain some of these votes, including opposition by one Democratic senator who has repeatedly sparred with Governor O’Malley throughout this session and did not receive the governor’s endorsement for a U.S. Senate race.

Whatever reasons led the Senate Finance Committee not to take action on Maryland’s 2012 offshore wind bill, the result is that it may be some time before the Maryland General Assembly takes the issue up again. The General Assembly meets for only 90 days each year, and the next session will not start until January of 2013. Gov. O’Malley is part way through his second term in office, and will be term-limited in 2014. That leaves just two more years for the legislature to enact his offshore wind vision while he remains in office.

In the meantime, Maryland’s offshore wind resource remains undeveloped and uncapitalized. Will the third time be the charm for offshore wind legislation in Maryland?

Todd J. Griset practices energy law with Preti Flaherty Beliveau & Pachios in Maine. He also writes a blog on offshore wind, renewable energy and policy issues.

“This agreement among federal agencies and Great Lakes states is a smart, practical way to encourage the development of homegrown energy that will create jobs, power homes and reduce pollution in American communities,” said Nancy Sutley, chairwoman of the White House Council on Environmental Quality.

Illinois, Michigan, Minnesota, New York and Pennsylvania have signed onto the plan, according to the report.

Maryland Offshore Wind Bill Set To Pass House of Delegates

Maryland Gov. Martin O’Malley’s offshore wind legislation is on track for final passage in the state House of Delegates today, the Baltimore Sun reported.

Democrats in the House of Delegates rejected several Republican attempts to weaken the bill, including an amendment that would limit the offshore wind development to one prototype turbine.

The bill still faces a daunting challenge in the Senate, according to the Sun report.

Earlier this week, Virginia Gov. Bob McDonnell announced that the state’s Marine Resources Commission had approved a single five-megawatt offshore wind turbine for the lower section of the Chesapeake Bay.

One year ago this week, the same commission had approved scientific studies to examine the feasibility of such a project.

The move is being hailed by the governor as a game-changer that will upend the decade-long race for the first U.S. offshore wind project. Construction on the turbine is scheduled to be completed before the end of 2013.

In an official announcement, McDonnell’s office noted that the target date “would be before other offshore wind energy projects are slated to be built in other parts of the country. “

The turbine is being developed by Gamesa Energy USA and Huntingon Ingalls Newport News Shipbuilding and will be connected to the grid. The project could be a significant boost for the prospects of an offshore wind manufacturing center in the Newport News area of Virginia.

So, where is the excitement?

“I don’t think it really signals anything,” said Beth Kemler, Virginia State Director for the decidedly pro-offshore wind Chesapeake Climate Action Network. “This turbine has been in the works for years, this is just the announcement that a state agency approved construction at the site.”

Kemler suggested that McDonnell might be more excited about developing an offshore wind manufacturing base than about developing large-scale projects.

“We would hope to see this much enthusiasm for deploying utility scale offshore wind,” she said.

The lack of enthusiasm was not limited to Kemler. Congressman Rob Wittman represents Newport News and his district runs along the Chesapeake Bay. He has been a supporter of offshore wind development, telling Offshore Wind Wire last year that it is an “important component” of the country’s energy future. His office, however, declined several opportunities to comment on the new turbine.

The project might be seen as too small to generate much excitement. Offshore wind industry observers might have heard too many promises of construction next year, whichever year that happens to be.

But this project looks different. Gamesa has the resources to make the project a reality. The turbine has backing from a Republican governor, removing the possibility that this becomes a partisan point of contention.

Importantly, no anti-offshore wind group has emerged in southern Virginia. Perhaps because of the size of the project, but more likely because of the economic opportunity that this industry represents.

“This wind turbine prototype will bring jobs, jobs and more jobs, and it positions Virginia to be a leader in clean energy technology,” said Doug Domenech, Virginia’s Secretary of Natural Resources.

For a decade the offshore wind industry has labored under the fact that there are no projects in U.S. waters. After the first project is in the water, it will be easier to build the second. And what if that first project is a single turbine? Kemler, who is yearning for utility scale offshore wind near Virginia, acknowledged that a single turbine is a step in the right direction.

“Anything that helps move the momentum forward for offshore wind in U.S. waters is a good thing,” she said. “Anything that helps make this more real for Americans – the public or legislators – is a good thing.”

Virginia electric utility Dominion Virginia Power has told the federal Bureau of Ocean Energy Management that it is interested in a lease to site offshore wind energy generation and transmission facilities on the outer continental shelf.  The request represents an apparent shift in Dominion’s position on offshore wind; as recently as a year ago, Dominion announced that it would not include offshore wind in its energy generation mix until that electricity is cost competitive with traditional forms of generation.

What does Dominion’s lease request mean?

In February, BOEM issued its Call for Information and Nominations for Virginia, a formal request for comments and expressions of interest in developing offshore wind facilities in an area of federal waters roughly 10 nautical miles by 13 nautical miles, located about 23.5 nautical miles offshore Virginia Beach.  As reported earlier this week by the Offshore Wind Wire, Dominion has responded to the Call by expressing interest in the entire 113,000 available acres.

Dominion has now expressed interest in the entire Virginia Call area.  Some observers question Dominion’s sincerity, noting that offshore wind does not appear anywhere in Dominion’s Integrated Resource Plan, the company’s detailed 15 year plan to ensure adequate electricity supply for its customers.  Skeptics also note that Dominion’s previously-stated concerns about the cost of producing electricity from offshore wind resources may be at odds with its expression of interest in developing its own offshore wind projects.

Nevertheless, Dominion operates generation facilities today (with a portfolio of 28,000 MW in capacity resources) as well as the mainland transmission grid in much of Virginia.  From this perspective, Dominion may be a credible player in the offshore wind market.  Indeed, while Dominion’s request represents the utility’s most forward step towards developing offshore wind, several recent events have hinted at a future Dominion entry into the offshore wind business.

In September 2011, Dominion won a $500,000 grant from the U.S. Department of Energy to work with partners and find ways to reduce the costs of offshore wind generation.  Under this grant, Dominion is analyzing performance and cost-of-energy estimates of a hypothetical 600 megawatt offshore wind project for a variety of sites on the U.S. Atlantic coastline in water depths up to 60 meters.

Last week, utility analysis firm ABB Power Systems Consulting released a study prepared at Dominion’s request of what transmission upgrades would be needed if offshore wind becomes a reality off Virginia.  That study suggested that each 500-700 megawatts of wind-generated electricity will need its own offshore substation platform, connected to shore by two 230,000 volt lines.  Assuming that about 2,000 megawatts of offshore wind capacity will be developed, ABB recommended four substation platforms connected to two land-based interconnection points.  According to the report, the price tag for each offshore service platform, associated equipment and submarine transmission cables will be about $652 million.

Another sign appeared earlier this month, when Dominion submitted comments to the BOEM asking it not to move forward with a request by Atlantic Grid Holdings for the right to develop the Atlantic Wind Connection offshore transmission system.  In those comments, Dominion noted that BOEM was simultaneously holding its Virginia Call while evaluating the Atlantic Wind Connection request, and that successful respondents to the Call would have certain rights to install their own transmission facilities.  Dominion asked BOEM to hold the Atlantic Wind Connection request pending completion of the Virginia Call process.

Yet another sign manifested last week, when the Chesapeake Climate Action Network and the Virginia Chapter of the Sierra Club collected over 10,000 signatures from Virginians asking Dominion to make a commitment by 2013 to invest in a utility-scale offshore wind farm.  As noted by the Offshore Wind Wire, proponents asked Dominion to develop its own offshore wind farm or invest in offshore wind through a power purchase agreement.

Given these signs, it may not be surprising that Dominion has expressed interest in developing offshore wind in federal waters off Virginia.  Now that the Call’s deadline has passed, BOEM will process the materials it received in response to the Call.  If any other developers have expressed interest in sites offered through the Call process, BOEM may hold a competitive process to select a developer.

BOEM has already issued its environmental assessment for mid-Atlantic offshore wind leasing, smoothing the regulatory seas for one or more Virginia projects.  Will offshore wind come to Virginia?  What role will Dominion play in its future?

Todd J. Griset practices energy law with Preti Flaherty Beliveau & Pachios in Maine. He also writes a blog on offshore wind, renewable energy and policy issues.

As part of the move, which was widely expected, Dominion expressed interest in the entire 113,000 acres that are available under the Call for Information and Nominations that was issued by the Bureau of Ocean Energy Management on Feb. 3.

“Offshore wind generation holds great promise in the long term as a scalable source of emissions-free renewable electricity,” said Mary Doswell, Dominion’s executive vice president for Alternative Energy Solutions. “Virginia is well positioned to accommodate offshore wind with the existing electric grid and world-class port facilities in Hampton Roads. The challenge remains the high cost of building this generation and bringing it to customers.”

Offshore wind advocates such as the Sierra Club and the Chesapeake Climate Action Network have publicly questioned Dominion’s intentions regarding the lease blocks, asserting that the company may actually be planning to prevent offshore wind development rather than encourage it.

In a March 19 letter to BOEM, the director of the Virginia Chapter of the Sierra Club said that “Dominion has expressed interest in securing the Virginia WEA lease blocks, but signs suggest that it may be more interested in preventing others from developing these lease blocks than in doing so itself in a timely manner.”

The director, Glen Besa, noted that Dominion did not include offshore wind in its Integrated Resource Plan (IRP) which details the company’s 15 year electricity generation plan. He also said that the company consistently overstates the costs associated with offshore wind.

Besa’s letter further encouraged BOEM to “issue leases to more than a single developer in the Virginia WEA and ensure adherence to its leasing and development timelines, with meaningful disincentives for not proceeding with development in a timely manner.”

Study Details Wildlife Habitats in Projected New York Offshore Wind Zone

The Center for Coastal Monitoring and Assessment today released a new study titled “A Biogeographic Assessment of Seabirds, Deep Sea Corals and Ocean Habitats of the New York Bight: Science to Support Offshore Spatial Planning”.

According to the New York Times, the report resulted from a two-year joint effort between the State and the National Oceanic and Atmospheric Administration (NOAA). NOAA looked at how bird, fish and coral biodiversity, habitats, resources and ecology may be affected by proposed offshore wind development in the area.

If well received, the study could help streamline development and serve as a model for future studies on the East Coast.