Winds are shifting over the Great Lakes, with offshore wind development in Ohio’s lake waters moving forward while projects in New York languish.

The United States Department of Energy has identified 742.5 gigawatts of potential developable capacity in the lakes. However, differences in state and local regulatory environments and in development structures may lead to uneven development of this potential.

In positive news for Great Lakes offshore wind, Ohio Gov. Ted Strickland has signed a lease option giving the Lake Erie Energy Development Co. development rights to part of Ohio’s lakebed holdings. Founded in 2009, LEEDCo is a private nonprofit economic development corporation which grew out of a local and state-level task force. LEEDCo’s current goals include building a 20 MW pilot project, then using the pilot project to develop a permitting process designed to scale up to 1000 MW of offshore wind by 2020. LEEDCO distinguishes its project through both extensive engagement with the local communities – whose manufacturing base has been hit hard by the economic downturn – and by a relatively modest initial project size of 5 to 7 turbines.

At the same time, things are not going as smoothly for offshore wind development in New York’s Lake Ontario waters. A shakeup at the New York Power Authority may spell trouble for the NYPA’s Great Lakes Offshore Wind (GLOW) program. This Tuesday, NYPA president and CEO Richard Kessel gave the Authority’s board notice of his resignation.

Within NYPA, Kessel championed the prospects of developing New York’s Great Lakes offshore wind resource. Unveiled on Earth Day 2009, NYPA’s GLOW Project featured a competitive process to award power purchase agreements to prospective developers of offshore wind projects in New York’s lake waters. Things looked rosy at first: five developers responded to NYPA’s request for proposals by the summer of 2010; NYPA appeared to be reviewing the proposals, with a winner to be announced no later than January 2011.

This year brought a shift in the winds for the NYPA GLOW project. First the developer selection date slipped to late March, then it slipped to “second quarter”. In May, the chairman of NYPA’s board publicly questioned the viability of the GLOW program. NYPA has been relatively secretive about the status of GLOW over the past year – drawing public criticism and scrutiny as recently as this week – so it is hard for outsiders to gauge the full import of Kessel’s resignation on NYPA’s offshore wind program. Nevertheless, it is clear that Kessel’s departure comes as another blow to the GLOW program. This reading is consistent with suspicions that the NYPA board will announce that none of the proposals under review meet economic criteria in terms of the return on NYPA’s investment of publicly controlled dollars.

Meanwhile, proposed federal legislation would give a boost to all U.S. offshore wind projects, whether in Great Lakes waters or our oceans. S. 1397, the Incentivizing Offshore Wind Power Act, would extend an existing federal tax incentive for developing new renewable projects. The U.S. tax code allows developers to offset their federal income tax liabilities through an investment tax credit (ITC) equal to 30% of the eligible costs of developing a renewable energy project. This tax credit, like other federal energy tax incentives, tends to receive Congressional authorization for several years, only to be renewed in the face of impending expiration.

Current law requires developers of wind projects to place their projects in service by the end of 2012 in order to qualify for the ITC. Between the novel nature of offshore wind technology, the challenges of the regulatory and permitting processes, and the multi-year nature of any project’s construction effort, it is not clear that any projects could meet the deadline to qualify for the ITC. S. 1397 would amend that incentive to allow offshore wind developers give years after receiving the ITC to complete project development. This would not only help conform the ITC to the needs of real offshore wind projects, but would offer developers greater certainty about the future availability of this incentive.

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.

“From my perspective, I don’t think that project is very viable at this time, politically or economically,” Townsend said.

The NYPA, an independent state agency, is reviewing proposals to build an offshore wind farm in state waters of Lakes Ontario or Lake Erie. A decision is expected by June, according to the Democrat and Chronicle. NYPA spokeswoman Connie Cullen said that the review process is continuing.

“While we greatly respect the opinions of our trustees, NYPA hasn’t yet completed its review of the bids,” she said. “We hope to present the full results of the review to our trustees in the next couple of months.”

PJM Official Says Grid Can Handle Offshore Wind

Michael Kormos, a senior vice president of PJM Interconnection, said this week that offshore wind projects can be successfully integrated into the electrical grid, NJSpotlight.com reported.

PJM is the grid operator for an area that stretches from the Atlantic Coast to Illinois. Kormos said that the amount of offshore wind that will need to be integrated is dwarfed by the amount of onshore wind soon to come online. Kormos predicted transmission upgrades would be needed after 10,000 megawatts of offshore wind have been installed.

“It’s going to be very unlikely we’re going to see any problems with offshore wind to create potential reliability problems,” he said.

Maine Floating Turbine Model Being Tested In Europe

A team from the University of Maine is in the third week of testing scale models of deep water floating offshore wind platforms in Europe, Physorg.com reported.

The tests of three different 1/50th-scale models are being conducted in a simulation basin owned by Dutch company Marin.

“It was difficult at first but we made it through, and the testing results we’re getting right now are what we expected,” said Heather Martin, a graduate research assistant at the University of Maine’s Advanced Structures and Composites Center.

The agency is choosing between five proposals and was previously scheduled to choose a winner by the end of March.

“We are in the final stages. I can’t pinpoint an exact date. But we are on schedule still looking at second quarter,” NYPA spokeswoman Sharon Laudisi said. She said construction will not begin for a few more years.

“Aggressively, you could look at 2015,” she said.

Muskegon Chronicle Slams Proposed Offshore Wind Ban

In a Tuesday editorial, the Muskegon Chronicle sharply criticized a bill proposed by two Republican state legislators that would prohibit offshore wind development or state funding of offshore wind research.

“Lawmakers should not bury their heads in the sand on offshore wind. If Michigan is not at the table, it doesn’t mean that wind turbines won’t be developed in the Great Lakes. Wisconsin, Illinois, Ohio and Canada all are looking at ways to harness the wind because this area — especially the lake — is a terrific source of constant wind … Michigan won’t have a chance to guide the development of this industry or to benefit from the jobs it might create,” the editorial read. “Of course, this bill will assure one thing: The wind turbines won’t be in our backyard, for the few of us that own lakefront property.”

The NYPA, which is a governmental agency, sought offshore wind developers in 2009 and received five proposals in June, 2010.

The Democrat and Chronicle also reported that a majority of Monroe County, NY, legislators have signed a non-binding resolution opposing the idea, despite the fact that 68 percent of likely Monroe County voters surveyed last fall supported offshore wind turbines in Lake Ontario.  Of those surveyed, only 17 percent were opposed and 15 percent were undecided, according to the newspaper.

Power Authority spokeswoman Connie Cullen said that the agency will review the non-binding resolution.

“NYPA is always interested in receiving comment on the project, and will consider it as we do all public comment,” Cullen said.

House Chairman Takes Aim At Renewable Energy Standard

The new chairman of the House Energy and Commerce Committee plans to focus his efforts on blocking a national renewable portfolio standard as well as climate change regulations, The Hill reported yesterday.

The Republican strategy was detailed in a planning document circulated by Chairman Fred Upton (R-Michigan).

“Although governments have an important role to play in facilitating development of alternative energy, we oppose energy technology mandates that must be met regardless of cost,” the document said of efforts to pass an RPS.

Republican Sen. Susan Collins, a champion of the state’s offshore wind industry, announced last Thursday that the committee had approved her request.  The House has not yet included the funding in its version of the bill, according to Mainebiz.

More Great Lakes Opposition

The board of directors for the Old Fort Niagara Association, a nonprofit that operates a historic military site on Lake Ontario, has voted to oppose the New York Power Authority’s proposed offshore wind plans, the Niagara Gazette reported last week.

According to the Gazette, the decision is part of a steady stream of votes from regional governments and entities to oppose the project.

“One of Old Fort Niagara’s unique attributes is its combination of original 18th century buildings set against a stunning view of Lake Ontario,” Old Fort Niagara Director Robert Emerson was quoted as saying.  “The placement of massive, modern industrial wind turbines in the Lake would destroy the visual aesthetic of Old Fort Niagara’s historic setting.”

“The Department of Natural Resources and Environmental Control was granted delegating authority this week by the Environmental Protection Agency through a statute of the federal Clean Air Act pertaining to the outer continental shelf,” WGMD.com reported.  “The first action in Delaware that will be subject to these regulations is a proposed meteorological tower associated with the Blue Water Wind project.”

The project had been experiencing delays in working with the EPA.  DNREC Secretary Collin P. O’Mara was quoted as saying the delegation ensures “that the promise of offshore wind is realized in a timely fashion.”

NY Town Council Opposes Great Lakes Wind

The town council of Greece, NY, has voted unanimously to oppose the New York Power Authority’s plan to develop offshore wind power on Lake Erie or Lake Ontario, the Rochester Democrat and Chronicle reported yesterday.

“That’s a residential area, and from an aesthetic standpoint, residents didn’t want development into what they consider a national treasure, Lake Ontario,” town Supervisor John Auberger was quoted as saying.