As Md. weighs wind energy, Del. wind farm put on hold

Source: Aaron C. Davis • Washington Post • Posted: Wednesday, December 14, 2011

State lawmakers have a new factor to consider when weighing Gov. Martin O’Malley’s (D) push to develop offshore wind energy.

The developer of a wind farm off the coast of Delaware said the company has put the project on hold because cost-cutting moves by Congress have made it impossible to finance.

The demise of the Delaware project comes weeks after another legal setback for a Massachusetts wind farm off the coast of Nantucket. That project has been mired in legal battles for nearly a decade

Marylanders for Offshore Wind, a coalition of mostly environmentalists and union groups, issued a statement Tuesday urging leaders of the Maryland General Assembly to press forward with legislation to help spur construction of a wind farm that O’Malley wants built off the coast of Ocean City.

The proponents argued a set of problems with the Delaware project were unique and “does not, in our view, signal long-term difficulties for the East Coast offshore wind industry, generally.”

New Jersey-based NRG Energy, however, said in a statement Monday that the outlook for offshore wind has changed dramatically over the last two years. The company cited two decisions by Congress that could significantly affect financing for any offshore wind project. Not one has yet been built in the United States.

Congress this summer eliminated funding for the Department of Energy’s loan guarantee program applicable to offshore wind, and has failed to agree on how to extend a Federal Investment and Production Tax Credit for offshore wind that will expire in 2012

In April, Maryland lawmakers rejected a plan by O’Malley that sought to promote construction of offshore wind farms by requiring the state’s utilities to enter into long-term agreements with providers of that clean-energy source. The plan would have added a monthly fee to the bills of most Maryland electric customers.

O’Malley said last month that he is open to considering another approach, modeled after New Jersey’s, which provides incentives for offshore wind generation but requires less of an upfront commitment from the utility companies. Maryland provides incentives for solar energy in a similar fashion.