Maryland Governor Poised To Sign Bill Incentivizing Offshore Wind Power

Maryland Governor Martin O'Malley

By Howard Marano and Michael Conathan

For the moment at least, the U.S. offshore wind industry has a new capital: Annapolis. By an 88 to 48 vote, the Maryland House of delegates handed Governor Martin O'Malley one of his most desired legislative victories - enactment of a bill that would earmark $1.7 billion for development of a wind farm in federal waters off Maryland's coast, with the funding coming from up to a $1.50 monthly surcharge on consumers' electricity bills. The bill, which passed the Senate earlier this month now heads to the Governor's desk for signature into law.

The Maryland Offshore Wind Energy Act of 2013 has been one of O'Malley's top goals for years, as he's sought to take advantage of Maryland's expanse of shallow water, its "outstanding" wind resources, and its existing industrial infrastructure - all of which make Maryland an ideal place for offshore wind.

Despite these prime features, development of offshore wind in Maryland, as in the rest of the country, has been a long time coming. In two previous legislative sessions O'Malley attempted unsuccessfully to shepherd his bill though the legislature, demonstrating the political hurdles standing in the way of development even in an environmentally friendly state. At first, opponents were able to torpedo the bill due to its cost. Then when proponents lowered the price cap to $1.50 in 2012, political wrangling sunk the bill as the clock expired on the legislative session.

Since O'Malley's bill was first introduced in Maryland, the American onshore wind industry has seen tremendous growth. In fact, with the installation of 13,000 megawatts of new capacity, 2012 was a banner year for wind in the U.S. In contrast, not a single wind turbine has been installed off America's coasts in that time. While the offshore wind industry in the U.S. has struggled to overcome financial, political, and bureaucratic hurdles, offshore wind in Europe and Asia has continued to expand. Maryland's Offshore Wind Energy Act is meant to help reverse that trend.

Like its predecessors, the current bill would require that, within Maryland's renewable energy portfolio standard program, a certain percentage of electricity be supplied by offshore wind starting in 2017. In order to protect consumers from excessive rate increases resulting from the higher costs of wind energy production, the bill creates a "window of maximum rate impacts for both residential and nonresidential electric customers." Currently, this would amount to $1.50 per month for a household and a monthly surcharge of 1.5 percent for businesses. The new law is the first of its kind requiring direct subsidies from ratepayers, and was made politically palatable by a 2013 poll showing 72 percent of Maryland residents would be willing to pay $2 more per month for their electricity bills to develop an offshore wind industry.

The benefits of offshore wind in Maryland would still be substantial. The Governor's office estimates the project would create 850 construction jobs and 160 supply and operation and maintenance jobs. According to an analysis completed by the Maryland Department of Business and Economic Development, a 200 megawatt project would create $1.3 billion in economic activity over a five year period, generating $5.6 million in state tax revenue. And data from the National Academy of Sciences suggests Maryland stands to gain $17 million in annual public health benefits as a result of reduced fossil fuel use for electricity production.

The return on investment from any first-in-class offshore wind project will be just the tip of the iceberg. The Center for American Progress released a report in February detailing the overall benefits of developing a commercial scale offshore wind industry in the U.S. The report found that the investment required to develop an offshore wind industry would be far less than the federal government has spent on subsidizing fossil fuel industries, and that the cost to ratepayers could be as low as $0.25 per month.

While passage of the Maryland Offshore Wind Energy Act represents a victory for advocates of offshore wind, substantial obstacles still remain. Concessions made to secure the bill's passage have caused industry analysts to warn that any project will be reliant on additional tax incentives to become profitable. Even Governor O'Malley has recognized this concern at a press conference, saying "I don't believe any one state can do this by itself."

Fortunately, Maryland won't have to act on its own. Under President Obama, the Department of Energy has prioritized offshore wind, pursuing its "Smart from the Start" program that has already identified wind energy areas off the coasts of several northeast and mid-Atlantic states. And just last week, the Bureau of Ocean Energy Management announced the latest step in granting the Commonwealth of Virgina a research lease for a wind energy area off its coast. Even Congress has gotten into the act, passing a one-year extension of key tax credits that move the industry a step closer to offshore wind production.

From Denmark to China, other countries have already realized the benefits of generating electricity from strong, consistent offshore winds and revitalizing sagging coastal economies. O'Malley's legislation is an excellent step forward on both counts for his state and for the country.

Howard Marano is an intern with the Ocean Program and Michael Conathan is Director of Ocean Policy at the Center for American Progress.

http://thinkprogress.org/climate/2013/03/20/1749381/maryland-governor-

Filling The Sails Of Offshore Wind Energy

As America has stood on the sidelines, other countries such as Denmark, the United Kingdom, Germany, and even China have leapt ahead of us in developing offshore wind. Here a speed boat passes by Danish offshore windmills in the North Sea. SOURCE: AP.

By Michael Conathan

Since 1896, when Californians sunk the first oil well into the seabed from a wharf jutting 300 feet into the Pacific Ocean, the American offshore energy industry has been all about fossil fuels.

But our potential is so much greater. "Drill now, drill everywhere" is a closed-minded strategy of the past. And with every day that goes by as we continue to focus on fossil fuels for energy, we fall further behind the rest of the world in the quest to diversify our offshore energy portfolio.

By continuing to prioritize yesterday's technologies, we are locking ourselves into an energy future that dooms our climate, harms our environment, and sacrifices human health. The costs of coal, oil, and natural gas have all been kept artificially cheap by government subsidies and by our failure to make polluters pay for the negative effects of their emissions. Artificially lowering the price of these commodities slants the playing field, making it harder for new clean energy sources to compete in the marketplace.

As America has stood on the sidelines, other countries such as Denmark, the United Kingdom, Germany, and even China have leapt ahead of us in developing one particularly strong-and commercially viable-renewable resource, which the United States also happens to have in abundance: offshore wind. As of June 2012 the rest of the world boasted 4,619 megawatts of total installed offshore wind energy capacity. Meanwhile, we have not even begun construction of our first offshore turbine. Lack of a clear regulatory structure, inconsistent messages from other ocean stakeholders, congressional budget battles, opposition to specific project siting, and instability in financial markets have all played a role in preventing domestic offshore wind from becoming a reality.

Much of this has changed under President Barack Obama's leadership. In February 2011 the Departments of Energy and the Interior announced the intention to develop 54 gigawatts of offshore wind capacity by 2030, and the United States is closing the gap between our domestic offshore wind industry and those of the rest of the world. In 2012 alone the administration and Congress made major strides toward encouraging renewable energy development on the outer continental shelf:

• In November 2012 the Department of the Interior announced the first-ever competitive sales on the outer continental shelf for offshore wind energy. This allows potential developers to bid on 277,550 acres in two wind energy areas-one off the coast of Virginia and another off the coasts of Massachusetts and Rhode Island. These areas are expected to be able to support more than 4,000 megawatts of wind generation-enough electricity to power an estimated 1.4 million homes.
• In October 2012 the Bureau of Ocean Energy Management signed its first lease under the "Smart from the Start" program with developer NRG Bluewater Wind, giving them rights to build a wind farm off the coast of Delaware. In May and August the bureau issued Determinations of No Competitive Interest for two cable routes to transmit power-one for the Atlantic Wind Connection off the mid-Atlantic seaboard and another for the Deepwater Wind Block Island project off Rhode Island. And in December 2012, the bureau began leasing and approving site assessment/characterization environmental assessments off the coast of Georgia and North Carolina.
• In December 2012 the Department of Energy announced that it will fund seven offshore wind technology demonstration projects, including Fishermen's Atlantic City Windfarm in New Jersey; technology projects in California, the Great Lakes, Connecticut, and Maine; and two turbines off the coast of Virginia. The recipients are eligible for up to $4 million each in project-development grants.

The U.S. offshore wind industry is beginning to emerge from the political doldrums that clouded its early days, and it is finding champions in Congress, as well as in the Obama administration.

Sen. Tom Carper (D-DE) led legislation to ensure that offshore wind is covered by key tax provisions that had previously only applied to onshore wind. Sen. Susan Collins (R-ME) championed funding for offshore wind development, including a deepwater pilot project in her home state of Maine.

Governors such as Martin O'Malley (D-MD) and Deval Patrick (D-MA) have prioritized offshore wind development as well. They view it as a political victory on multiple fronts-creating sorely needed jobs in construction, operation, and maintenance, and contributing to a diverse energy portfolio while moving us closer to renewable energy targets and away from polluting fossil fuels.

As political opposition falls away from offshore wind projects, opponents are turning more toward economic arguments against further development of this technology, suggesting it will increase electricity rates and ultimately cost jobs.

As with any new product or technology, the first U.S. offshore wind farm will undoubtedly face steeper costs of construction and development than its successors. But as the industry grows, experience, technological developments, and economies of scale will cause those costs to decline. Multiple studies of the offshore wind industry in Europe have shown that the "learning rate"-the rate at which the overall cost of offshore wind energy development declines over time-can be as high as 10 percent per year.

The question is not, therefore, whether the cost of offshore wind energy will come down, but rather how quickly. Cost-reduction rates will depend heavily on the amount of upfront investment the industry receives, including investment from the federal government. Thebillions of dollars in subsidies spent on mature industries such as oil and gas would go further in growing the nascent renewable energy technologies, which can in turn keep us competitive in the global market and create high-quality green jobs that reduce our dependence on foreign oil and help forge a new energy future.

Finally, and perhaps most importantly, to truly level the playing field for offshore wind or any renewable energy technology, we must incorporate the cost externalities currently being ignored for oil, gas, and coal-fired power generation-most prominently the societal cost of pollution it generates, including the greenhouse gas emissions.

Those who suggest Americans can't afford to spend more for energy in the middle of an economic recovery are ignoring the fact that we are already spending more for our energy than the amount we see on our monthly utility bills or at the gas pump. We're paying through Congress when we subsidize Big Oil. We're paying at grocery stores when food prices increase as a result of an epic Midwestern drought. And we're paying at hospitals as more of our children suffer from asthma and other maladies caused by unclean air.

One of the catchphrases tossed around cavalierly in Washington by both parties is the need for an "all of the above" energy strategy. Conservatives say the president is failing to achieve this when he makes any decision not endorsed by the American Petroleum Institute. But the reality is no true "all of the above" strategy can be complete if it leaves out a commercially viable, renewable, and domestic resource that has the potential to make major contributions to our country's energy needs and our economy without perpetuating the negative and uncounted effects of our fossil-fuel dependence.

While no single energy source can turn back the tide of climate change that is already raising sea levels, acidifying our oceans, and contributing to extreme weather events, as President Obama said in his second Inaugural Address, a failure to respond to climate change "would betray our children and future generations." Affordable domestic offshore wind can and must be a part of the response.

- Michael Conathan is the Director of Ocean Policy at the Center for American Progress. Reprinted from the Center for American Progress website.

http://thinkprogress.org/climate/2013/01/31/1521031/filling-the-sails-

Wind Beats Out Natural Gas To Become Top Source Of New Electricity Capacity For 2012

Through June of 2012, renewable energy was right behind natural gas in terms of the most new energy generating capacity being installed in the United States, with wind making up most of the renewables push. And now Business Insider has flagged the numbers for the remainder of the year.

Last week, they reported that wind ultimately pulled ahead of natural gas to become the leading installer of new capacity in 2012, at 10,689 total megawatts.

Those numbers came from the Federal Energy Regulatory Commission's report on the trends and highlights in U.S. energy for the past year. According to FERC's update, natural gas installed 8,746 megawatts of new capacity, coal installed 4,510 new megawatts, and solar came in fourth with 1,476 new megawatts. Here's the relevant table from the report, conveniently highlighted by Business Insider:

One thing to note here is the issue of capacity factor: That's how much power an installation actually produces as a percentage of its theoretical capacity. (Which is what's listed in the table.) Natural gas plants do quite well in this regard: Their median performance tends to come out to at least 80 percent, and they max out at 93 percent, according to the National Renewable Energy Laboratory's cost database.

Unfortunately, wind power doesn't perform as well, due to the intermittency of, well, wind. Its median tends to be around 40 percent offshore. Onshore it's been at 30 percent, though arguably onshore performance is pulling alongside offshore. And both max out at 50 to 54 percent. So even though wind beat out natural gas for new capacity in 2012, the new natural gas installation will almost certainly wind up generating more total electricity.

The good news for wind is that it's still a relatively young technology, with lots of room to improve. The energy it does deliver is produced much more efficiently in comparison to natural gas - the former loses less than one percent of its energy as waste heat, while the latter can lose as much as 54 percent. Natural gas production in the U.S. may be on track to plateau, leading to predictions of rising prices, which will give wind power a further economic opening.

And, of course, there's the fact that, while cleaner than coal, natural gas remains a contributor to greenhouse gas emissions both through leaks and combustion.

http://thinkprogress.org/climate/2013/01/22/1479961/wind-beats-out-nat

Wind energy tax credits survive as Congress passes fiscal cliff deal

The wind energy industry in the U.S. breathed a sigh of relief as Congress passed a fiscal cliff deal on Tuesday that included an extension of the wind energy tax credits for wind projects that start in 2013. The wind energy tax credits - which began in the early 1990s but have expired at least three times over the years - were set to expire at the end of 2012, and if expired, would have frozen wind project construction in the U.S. The American W ...

http://gigaom.com/cleantech/wind-energy-tax-credits-survive-as-congres

Dominion Receives Federal Grant to Evaluate Ways to Reduce Cost of Offshore Wind Generation

• Partners include National Renewable Energy Laboratory, Virginia Tech, ALSTOM Power, Moffatt & Nichol
• Two-year, $500,000 grant to pay for energy modeling and analysis
• Goal is to achieve at least 25 percent reduction in the cost of off-shore generation

RICHMOND, Va., Sept. 19, 2011 /PRNewswire/ -- Dominion (NYSE: D) has received a two-year,$500,000 grant from the U.S. Department of Energy to look for ways to reduce the cost of offshore wind electricity generation by at least 25 percent.

"One of the biggest challenges to off-shore wind generation is bringing down the cost so it can be more competitive with other forms of electric power generation," said Mary C. Doswell, senior vice president-Alternative Energy Solutions. "The intent of the project is to achieve at least 25 percent reduction in the levelized cost of energy relative to a benchmark 600-megawatt power station design by integrating innovations in turbine, foundation, installation and electrical infrastructure into the most optimal combination."

The grant is one of 41 projects across 20 states totaling $43 million over the next five years that the DOE announced on Sept. 8 to speed technical innovations, lower costs, and shorten the timeline for deploying offshore wind energy systems. (See the DOE news release at: http://www.doe.gov/articles/department-energy-awards-43-million-spur-offshore-wind-energy)

Dominion's partners in its project are the Virginia Tech Advanced Research Institute in Arlington, Va.; the DOE's National Renewable Energy Laboratory; ALSTOM Power, an international provider of vital equipment and services for the U.S. power generation markets with a turbine engineering, manufacturing and service center in Richmond; and Moffatt & Nichol, an international maritime engineering firm specializing in structural design, ocean engineering, ports, harbors and marine terminals with local offices in Richmond and Norfolk, Va.

The Dominion-led team will utilize an integrated systems approach for optimizing the hypothetical design of a 600-megawatt offshore wind project located at a variety of reference sites on the Virginia Outer Continental Shelf, as well as other sites on the U.S. Atlantic coastline from Massachusetts through South Carolina, with a foundation and support substructure suitable for installation in water depths ranging from 10 meters to 60 meters.

Dominion also is studying what it would take to build a high-voltage underwater transmission line extending from Virginia Beach out to the potential commercial lease area in the Atlantic Ocean. Dominion plans to complete the study this year, evaluating options to best support multiple offshore wind projects off the coast of Virginia.

Dominion is one of the nation's largest producers and transporters of energy, with a portfolio of approximately 28,200 megawatts of generation, 11,000 miles of natural gas transmission, gathering and storage pipeline and 6,300 miles of electric transmission lines.  Dominion operates the nation's largest natural gas storage system with 947 billion cubic feet of storage capacity and serves retail energy customers in 15 states. For more information about Dominion, visit the company's website atwww.dom.com

SOURCE Dominion

CONTACT: Jim Norvelle, +1-804-771-6115, Jim.Norvelle@dom.com

Web Site: http://www.dom.com

 

 

Department of Energy Awards $43 Million to Spur Offshore Wind Energy

 

September 8, 2011 - 9:46am

Washington, D.C. – U.S. Energy Secretary Steven Chu today announced $43 million over the next five years to speed technical innovations, lower costs, and shorten the timeline for deploying offshore wind energy systems. The 41 projects across 20 states will advance wind turbine design tools and hardware, improve information about U.S. offshore wind resources, and accelerate the deployment of offshore wind by reducing market barriers such as supply chain development, transmission and infrastructure. The awards announced today will help the U.S. to compete in the global wind energy manufacturing sector, promote economic development and job creation, and support the development of an emerging industry that will provide clean electricity to American families.

Offshore wind energy can provide access to a vast clean, domestic, renewable resource that can help the United States meet its critical energy, environmental and economic challenges and provide energy to coastal cities where much of the nation’s population and electricity demand lies.

“The U.S. has an abundant offshore wind resource that remains untapped,” said Secretary Chu. “Through these awards, the Department of Energy is developing the critical technology and knowledge base necessary to responsibly develop this resource, enhance our energy security, and create new clean energy jobs.”

The selections announced today focus on technical approaches to advancing offshore technology and approaches to removing market barriers to responsible offshore wind energy deployment. Funding is subject to Congressional appropriations.

Nineteen offshore wind technology development projects will receive $26.5 million to address technical challenges and provide the foundation for a cost-competitive offshore wind industry in the United States. Awardees, in collaboration with industry, will develop the engineering modeling and analysis tools required to lower overall offshore facility costs and to design the next generation of innovative large-scale turbines optimized for installation and operation in the marine environment. These projects include research and development for innovations in key components such as floating support structures and turbine rotor and control subsystems that may lead to capital cost reductions of up to 50 percent.

Twenty-two market barrier removal projects will receive $16.5 million to research factors limiting the deployment of offshore wind in the nation’s coastal and Great Lakes regions. Topic areas include project design factors such as environmental impact assessment and characterization of the offshore wind resource; subjects related to investment and infrastructure development such as categorization of financial risks and long term manufacturing needs and port requirements; and technical offshore wind interface topics such as transmission grid integration, and assessment of potential impact on offshore navigation and communication systems.

Read the full list of award winners.

DOE's Office of Energy Efficiency and Renewable Energy invests in clean energy technologies that strengthen the economy, protect the environment, and reduce America's dependence on foreign oil. Learn more about DOE’s efforts to research, test, develop, and deploy innovative wind energy technologies.

Department of Energy Awards $43 Million to Spur Offshore Wind Energy

September 08, 2011

U.S. Energy Secretary Steven Chu today announced $43 million over the next five years to speed technical innovations, lower costs, and shorten the timeline for deploying offshore wind energy systems. The 41 projects across 20 states will advance wind turbine design tools and hardware, improve information about U.S. offshore wind resources, and accelerate the deployment of offshore wind by reducing market barriers such as supply chain development, transmission, and infrastructure. The awards announced today will help the United States to compete in the global wind energy manufacturing sector, promote economic development and job creation, and support the development of an emerging industry that will provide clean electricity to American families.

Offshore wind energy can provide access to a vast clean, domestic, renewable resource that can help the United States meet its critical energy, environmental, and economic challenges and provide energy to coastal cities where much of the nation's population and electricity demand lies.

"The U.S. has an abundant offshore wind resource that remains untapped," said Secretary Chu. "Through these awards, the Department of Energy is developing the critical technology and knowledge base necessary to responsibly develop this resource, enhance our energy security, and create new clean energy jobs."

The selections announced today focus on three technical approaches to advancing offshore technology and seven approaches to removing market barriers to responsible offshore wind energy deployment. Funding is subject to Congressional appropriations.

Technology Advancement

• Modeling and Analysis Design Tools to Assess Offshore Wind Turbine Technologies: Eight projects will receive $6.7 million to advance the current state-of-the-art modeling and analysis tools for the design, performance assessment, system modeling and cost assessment of offshore wind systems.
• Innovative Offshore Wind Plant System Design Studies: Seven projects will receive $3.4 million to develop conceptual designs and assessments of offshore wind plant systems that enhance energy capture, improve performance and reliability, and reduce the cost of energy from integrated wind plant systems.
• Innovative Offshore Wind Turbine Component Development: Four projects will receive $16.4 million to research and develop innovative rotor and control systems designs for advanced components and integrated systems to reduce capital costs of these systems by up to 50%.

Market Barrier Removal

• Offshore Wind Market and Economic Analysis: One project receiving $510,000 will reduce financing costs and increase investor confidence by supporting offshore wind market analysis to inform stakeholder decision-making regarding individual projects, industry issues, and energy policy.
• Environmental Risk Reduction: Three projects receiving $5.7 million will work to expedite the permitting process by performing ecological studies and predictive modeling and validating innovative technologies for avian and bat studies.
• Manufacturing and Supply Chain Development: One project will receive $350,000 to assess the current domestic supply chain infrastructure and recommend strategies for national manufacturing infrastructure development to support offshore wind deployment.
• Transmission Planning and Interconnection Studies: Four projects will receive $2.5 million to study and plan for the integration of offshore wind energy into the electrical transmission and grid interconnection, thereby increasing technical viability of commercial-scale offshore wind integration.
• Optimized Infrastructure and Operations: Four projects will receive $1.2 million to support the assessment of ports, vessels, and operations that will be involved with offshore wind energy efforts.
• Resource Characterization and Design Conditions: Eight projects will receive $5.8 million to develop an accessible network of information on subjects including U.S. offshore wind resources, design requirements for offshore wind turbines, and environmental conditions affecting offshore wind energy systems.
• Impact on Electronic Equipment in the Marine Environment: One project will receive $500,000 to evaluate the potential effects of offshore wind energy facilities on electronic navigation, detection, or communication equipment such as airborne radar, Global Positioning Systems (GPS), shipboard radios, and SONAR (Sound Navigation and Ranging).

Read the full list of award winners.

DOE's Office of Energy Efficiency and Renewable Energy invests in clean energy technologies that strengthen the economy, protect the environment, and reduce America's dependence on foreign oil. Learn more about DOE's efforts to research, test, develop, and deploy innovative wind energy technologies.