“BOEM recognizes the proactive steps that the commonwealth has taken to encourage environmentally sound offshore wind energy development and we are working together to refine a suitable Wind Energy Area off the coast of Massachusetts,” said BOEM Director Tommy P. Beaudreau. “We will follow marine spatial planning principles as we continue to gather information and coordinate with other OCS users throughout the leasing process.”

According to a BOEM press release, the Call Area under consideration is located off the coast of Massachusetts beginning approximately 12 nautical miles south of Martha’s Vineyard and 13 nautical miles southwest of Nantucket. From its northern boundary, the Call Area extends 33 nautical miles southward to the 60 meter depth contour and has an east/west extent of approximately 47 nautical miles. The Call Area is approximately 826,241 acres and contains 132 whole OCS lease blocks as well as 19 partial blocks.

BOEM plans to conduct information sessions in Massachusetts during the comment period to explain the commercial leasing process and provide additional opportunities for public input on the scope of the Environmental Assessment. Details will be posted on BOEM’s website:  http://www.boem.gov/Renewable-Energy-Program/State-0Activities/Massachusetts.aspx.

Baltimore – Interior Secretary Ken Salazar announced today that leases for offshore wind development off of Maryland, Virginia, New Jersey and Delaware would be issued by the end of 2012 after an environmental review resulted in a finding of no significant environmental impact. The announcement follows President Obama’s call for additional clean energy development in his State of the Union address last week.

“When it comes to powering our nation’s homes, businesses and economy, we need to take an all-of-the-above approach to safely and responsibly developing our domestic energy resources,” Secretary Salazar said. “Offshore wind holds incredible potential for our country, and we’re moving full-steam ahead to accelerate the siting, leasing and construction of new projects.”

Under the National Environmental Policy Act (NEPA), the Bureau of Ocean Energy Management (BOEM) first had to conduct an environmental assessment of the proposed lease sites. This recently completed assessment found that there would be no significant environmental and socioeconomic impacts from issuing wind energy leases in the previously designated Outer Continental Shelf (OCS) lease areas off the mid-Atlantic Coast.

According to OWW contributor and wind energy expert Todd Griset, the finding of no significant impact (FONSI) will allow BOEM to move forward with the leasing process without preparing a more intensive and time consuming environmental impact statement. However, the assessment does not permit construction or cover any specific projects.

BOEM has received several responses to a Request for Interest issued in 2010 for lease areas off of Maryland, New Jersey and Virginia, and lease blocks in these areas will be awarded based on an auction held sometime this year. BOEM received only one response to the RFI for the lease blocks off of Delaware, and will issue a non-competitive lease to that developer sometime this year, presuming that the developer is still interested.

Overall, the announcement was met with excitement by industry observers.

“Today’s announcement gives us hope that the United States will now be able to develop our enormous offshore wind resources more quickly – and deliver the enormous economic, environmental and public health benefits that come with them.” said Kit Kennedy, Clean Energy Counsel for the NRDC.

“This is a critical step in the establishment of the U.S. offshore wind industry, which will create thousands of high skilled jobs and allow for billions of dollars in investment.” added Jim Lanard, President of the Offshore Wind Development Coalition.

The officials will appear at the Baltimore World Trade Center with BOEM Director Tommy Beaudreau.

According to the announcement, the press conference will focus on a “major step towards developing wind energy on the Outer Continental Shelf off the coasts of Maryland, Virginia, New Jersey and Delaware.”

Former Congressman Will Support Offshore Wind Project For Free

Former Massachusetts Rep. Bill Delahunt has announced that he will not accept payment for his consulting work to support the town of Hull’s offshore wind project, the Patriot Ledger reported yesterday.

Delahunt was recently criticized in several high-profile articles for consulting on the Hull project shortly after helping them secure federal funding.

“It’s a big plus for us,” said Patrick Cannon, who heads the Hull Municipal Light Board. That money “can be spent toward that project.”

UK Company Teams With Samsung On New Offshore Wind Gear System

U.K.-based company David Brown is working with Samsung Heavy Industries to design, develop and build a new 7 megawatt wind turbine gearbox, North American Windpower reported today.

The project would be supported by up to $530,000 in Energy Department funding, according to the report.

Maryland Labor Groups Want Guarantees

Maryland labor groups are asking for guaranteed involvement in offshore wind development in exchange for their support on Gov. Martin O’Malley’s resubmitted plans, the Baltimore Sun reported Friday.

“There’s got to be something written in the bill to include organized labor for us to totally commit to the project,” said Rod Easter, president of the Baltimore Building & Construction Trades Council. “We cannot be standing on the curb watching people go to work who don’t live in Maryland.”

Former Congressman In Spotlight For Consulting Work

Former Massachusetts congressman William Delahunt’s office denied any conflict of interest in consulting work on an offshore wind project for which he also earmarked federal funds, the Boston Globe reported.

Delahunt helped the town of Hull receive $1.7 million in federal funds for an offshore wind project and recently received a $72,000 contract to provide strategic guidance on the same issue.

“I think what’s been spun out there is that somehow we’ve been hired by the town to lobby, and that’s not true,’’ said Mark Forest, executive director of The Delahunt Group. “We’re not lobbying; we’re providing guidance and counsel to the town … we’ve had a lot of experience in this area. And our hope is that there is something productive that can be done in this area.’’

The January 3 report said that “the ISO and its consultants … have determined that it is unlikely that the project will achieve Commercial Operation” by June 1, 2015.

The company disagreed with the ISO New England assessment.

“We think it is very likely we’ll be online by June 2015, either in whole or in part,” said Cape Wind Vice President Dennis Duffy.

Atlantic City Project Aims For 2013 Commissioning

Fishermen’s Energy vice president and senior counsel Paul Gallagher said yesterday that his company’s Atlantic City offshore wind project is almost ready to begin construction, the Press of Atlantic City reported today.

Construction is waiting on a decision in March from the New Jersey Board of Public Utilities on the sale of the project’s electricity.

“We have arranged our financing, selected our turbines and lined up our contractors … We are, in what Obamaspeak refers to, as ‘shovel ready,’” Gallagher said. The decision in March “will allow us to put steel in the water next summer (2013), with turbines installed in August and power being generated by Labor Day 2013.”

Maryland Rallies For Offshore Wind

Over 100 protesters rallied at the Maryland statehouse this week to urge state lawmakers to support Gov. Martin O’Malley’s offshore wind plan, the Huffington Post reported.

As the US Coast Guard updates its management of coastwise navigation in Atlantic waters, the service is considering the impacts of offshore wind projects and other ocean energy development.

Through the end of January, the Coast Guard is accepting public comment on how renewable ocean energy facilities might affect users of near-coastal waters.  The process reflects the need to balance the potential for offshore wind in US waters against the realities of modern navigation.
 
Ocean energy resources have significant potential.  Many coastal states have enacted policies to promote the development of offshore wind resources, both close to shore and in deeper water.  New and emerging hydrokinetic and other technologies may give us cost-effective ways to harness the power of tides, marine currents, and waves.

In most cases, the generating equipment will be installed in the ocean, and will be connected to the mainland via an underwater transmission cable.  While each site and each technology has its nuances, overall the Coast Guard recognizes that ocean energy development has the potential to affect shipping and navigation.
 
To update its navigation rules and routes, and to help it balance navigation with renewable ocean energy, the Coast Guard kicked off an Atlantic coastwise Port Access Route Study in May 2011.  Unlike previous port access route studies, this study did not focus on approaches to individual ports as much as on the coastwise shipping routes.  The Coast Guard’s current study is thus targeted at near coastal users of the Western Atlantic Ocean – people plying routes between coastal ports.

Noting that several federally designated Wind Energy Areas lay near or on top of shipping routes, the Coast Guard hoped that the study would identify “all current and new users of the Western Atlantic near coastal zone, and help the Coast Guard determine what impact, if any, the siting, construction and operation of proposed alternative energy facilities may have on existing near coastal users of the Western Atlantic Ocean.”
 
By the time the comment period closed in August, the Coast Guard had received only 26 comments.  These comments focused on issues relevant to oceangoing shipping and coastwise tug and barge traffic, primarily in the Mid-Atlantic.  The limited scope of these comments, both in terms of geography and type of use, appears not to have fully satisfied the Coast Guard.
 
In December, the Coast Guard announced that it would reopen the comment period on the study, stating, “In addition to the Mid-Atlantic region, the Coast Guard has become aware of private sector interest in developing wind energy and hydrokinetic installations off the coasts of Maine, North Carolina, South Carolina, Georgia, and Florida.” 

The Coast Guard also expressed interest in hearing from other kinds of marine users, including commercial fishing vessels, small passenger vessels, sightseeing and eco-tour vessels like whale watching boats, recreational and charter fishing vessels, yachts, and sailing vessels.
 
In an attempt to gather information from stakeholders using these waters outside the Mid-Atlantic, the Coast Guard now seeks comments through January 31.  Comments can be submitted to the Coast Guard online, or by fax, mail, or hand delivery.  If the US offshore wind industry and other renewable ocean energy projects begin to grow, the use of the seas to produce energy will have to be balanced against navigation and other marine uses.  How that balance shapes up will be determined in part by the public comments submitted to the Coast Guard.

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 plan would compel utilities to buy power from offshore wind farms.

“The situation has gotten worse — not better — for offshore wind since the last time it was up for debate,” said Del. Dereck Davis, chairman of a committee whose support is crucial to to O’Malley’s plan.

The Chesapeake Bay Journal, meanwhile, reported on Friday that offshore wind support is increasing in mid-Atlantic states.

The Annapolis Capital reported that Maryland clean energy activists believe that New Jersey’s offshore wind legislation would provide a good model for their state.

The federal Bureau of Ocean Energy Management is considering a proposed underwater electric transmission line off the United States’ mid-Atlantic coast.

In March 2011, Atlantic Grid Holdings LLC applied to BOEM for a right-of-way grant for a transmission line running across the outer continental shelf offshore New York, New Jersey, Delaware, Maryland, and Virginia.  Called the Atlantic Wind Connection, the multi-billion dollar project would involve a two-circuit set of high-voltage direct current (HVDC) lines.  (Here’s a 125-page PDF of the right-of-way application.)

The Atlantic Wind Connection’s stated purpose is to serve as a backbone for the offshore grid.  The proposed 820-mile line would collect up to 7,000 megawatts of power generated by offshore wind generation facilities and deliver it to the mainland grid.  Atlantic Grid Holdings plans to connect to the mid-Atlantic grid operated by PJM Interconnection, and possibly also the New York Independent System Operator’s system.  Each of the line’s two circuits would be installed in its own offshore corridor to minimize the damage that could be caused by a single event, such as an anchor drag.

The project would be built in five phases over 10 years, first connecting southern New Jersey to Delaware, then southern New Jersey to the New York metro area, then Maryland to New York, then Maryland to Virginia, and finally Delaware to Virginia.  (Here’s a PDF map of the primary routes for the Atlantic Wind Connection line phases.)  This phased schedule is intended to align with the transmission developer’s anticipated timing of offshore wind generation.  Notably, the lease request does not seek any sites for commercial wind generation; Atlantic Grid Holdings’ request is for transmission siting only.

The offshore transmission project has drawn backing from players including Google.  The Atlantic Wind Connection project is led by independent transmission company Trans-Elect and is financed by Google, Good Energies, Marubeni Corporation, and Elia.

The use of the Atlantic Wind Connection line to transmit electricity other than offshore wind may be significant.  Offshore wind resources typically have a higher capacity factor than land-based wind, meaning offshore turbines can produce power closer to their maximum rating more of the time than terrestrial wind can.  The large geographical extent of the transmission line may also help balance flows on the line, as from time to time the wind blow more productively in some regions than in others.  Nevertheless, even the state-of-the-art offshore wind turbines do not produce power all of the time.  In these circumstances, the Atlantic Wind Connection transmission line could be used to transmit conventionally-generated electricity from point to point on the onshore grid.

BOEM is the federal agency tasked with managing the leasing of sites on the outer continental shelf for energy activities.  BOEM’s site leasing jurisdiction covers offshore wind generating facilities and the transmission lines needed to serve them, as well as natural gas and oil production operations.

Atlantic Grid Holdings’ lease application was unsolicited, meaning BOEM did not have a pending public call for proposals to develop the area.  Under BOEM’s leasing process, the next step for the Atlantic Wind Connection involves soliciting competitive interest in obtaining a right-of-way grant for renewable energy purposes for the area identified in Atlantic Grid Holdings’ request.

At the same time, BOEM has asked for public input relating to the proposal, its potential environmental consequences, and the uses of the proposed project area.  Showings of competitive interest and comments are due to BOEM by February 21, 2012.

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 Bureau of Ocean Energy Management (BOEM) announced today that it is taking the next steps in its review of the Atlantic Wind Connection, the proposed transmission line that would connect offshore wind farms with the mid-Atlantic electricity grid. According to a press release accompanying the announcement, BOEM is asking whether other developers are interested in constructing transmission facilities in this area while also seeking comments on the potential environmental consequences of the project. To submit a statement of competitive interest or a public comment electronically, follow this link.

Offshore Wind Talks to Continue in Maryland

Lawmakers are planning to resume talks on Governor Martin O’Malley’s offshore wind energy bill, which could eventually lead to an AWC-connected wind farm off of the coast of Maryland. The bill stalled in the legislature last session, but with Governor O’Malley fresh off of a clean energy victory in a utility merger, many are optimistic that the initiative will fare better this time around.

NRG Energy announced this week that it is “putting active development of offshore wind projects on hold for the near term.” This is a significant shift for NRG’s subsidiary Bluewater Wind and the projects it has been developing, and may have broader implications for the US offshore wind market. NRG Energy is a Fortune 250 wholesale power generation company, owning a diverse portfolio of nearly 26 gigawatts of electric generating capacity. NRG’s assets include major holdings of generating plants fueled by natural gas, coal, oil, and nuclear power, along with some terrestrial wind. NRG also has a growing solar business, owning the 21-megawtt Blythe project (California’s largest solar photovoltaic project since 2009) and investing in other projects like the Ivanpah Solar Electric Generating System along with Google and BrightSource Energy.

Bluewater Wind, which NRG acquired in 2009, has been pursuing at least four offshore wind projects.  Of these, the Mid-Atlantic Wind Park off Delaware made the most progress.  This 450-megawatt commercial-scale project would have been located in federal waters over 13 statute miles offshore Delaware.  Bluewater also won rights to develop a New Jersey offshore wind project, and proposed additional projects off Maryland and Massachusetts.

Since its inception in 2006, Bluewater Wind’s Delaware project achieved key milestones, such as signing power purchase agreements to sell part of the project’s output to utilities. Bluewater Wind signed a 25-year contract with utility Delmarva Power for up to 200 megawatts of power from the project.  That deal was approved by the Delaware Public Service Commission in 2008, and provided a base energy price of 9.9 cents per kilowatt-hour; combined with a statutory bonus for offshore wind renewable energy credits, the effective price per kWh in 2012 might have been closer to 14 cents.  While this price is at the low end of recent offshore wind pricing, having a contract meant a greater level of certainty about project revenues after startup.

With this week’s announcement, Bluewater Wind is putting its active development of offshore wind projects on hold, and plans to terminate its power purchase agreement with Delmarva.  In announcing this reversal, NRG described a shift in the outlook for offshore wind between NRG’s 2009 acquisition of Bluewater Wind and the present.  Two years ago, NRG believed the Delaware project would receive a loan guarantee from the Department of Energy.

Now, NRG points to a different outlook.  According to NRG’s press release, the end of funding for the loan guarantee program coupled with the incipient end of the renewable energy production tax credit and investment tax credits “have rendered the Delaware project both unfinanceable and financially untenable for the present.”

NRG also pointed to its inability to secure an investment partner for the project.  NRG described how it approached more than two dozen prospective investors, but was unable to find a partner “despite the attractiveness of the PPA”.

Several other events in recent months may also have affected Bluewater’s decision.  The town of Bethany Beach, Delaware, rejected NRG Bluewater’s plan to bring undersea cables from the project ashore in town. Bluewater Wind faced repeated deadlines 2011 under the Delmarva power purchase agreement, requiring Bluewater to put up project security if it wished to continue with the project.  Those deadlines were extended for reasons including uncertainty over federal incentive programs, but likely placed the Bluewater project under increased internal scrutiny by NRG.

Other entities had expressed skepticism about the project’s viability.  For example, the Delaware Municipal Electric Corporation had agreed to buy part of the output of the Bluewater Delaware offshore wind project, but in September 2011 DEMEC entered into a contract with Duke Energy Renewables to purchase power from a Pennsylvania terrestrial wind project.  To explain this hedge, DEMEC noted “the increasingly unlikely chances the Bluewater Wind project will be built anytime soon”, and pointed to “increasing federal uncertainty about offshore wind subsidies”.  DEMEC’s choice now appears prescient.

Beyond what this week’s announcement means for Bluewater and its projects, NRG’s decision may be a sign of how uncertainty impacts the entire United States offshore wind industry.  NRG may have had other factors in mind, such as a need to focus on its growing solar play or another element of its portfolio, but uncertainty was the principal explanation offered for the decision to suspend offshore wind operations.  If so, other offshore wind projects may find themselves in a similar position to Bluewater, with the siting process well underway and power purchase agreements in place for part of the project’s output – but with financing difficult to complete given the uncertainty.

The challenges posed by the end of the Department of Energy loan guarantee program and the impending end of the renewable tax credits are not unique to Bluewater, nor to its Delaware project.  Uncertainty surrounding the future of incentives and support for offshore wind is likely to affect other projects as well. How these forces impact each project may vary, but most currently-proposed projects rely on one or more incentives facing uncertain futures.

Meanwhile, interest is rising in deepwater floating offshore wind in waters off Maine. A subsidiary of Norwegian energy company Statoil has asked the federal Bureau of Ocean Energy Management for a lease for a site over 12 miles off Maine, near the midcoast town of Boothbay Harbor and Monhegan Island. If granted the lease, Statoil intends to develop a pilot project using its Hywind floating turbine model. Statoil also hopes to benefit from a competitive process run by the Maine Public Utilities Commission to select and fund one or more deepwater floating pilot projects.

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.