BOEM next to look at NC for offshore wind

Source: By  Matthew Bandyk, SNL • Posted: Tuesday, April 12, 2016

After several steps by the federal government in just the past month to move states like New York and Hawaii closer to hosting offshore wind, North Carolina could be the next state to take strides toward completing the long regulatory process needed to install floating turbines off the state’s beaches.

This summer, the U.S. Department of the Interior’s Bureau of Ocean Energy Management plans to propose ocean areas near the North Carolina coast that could be leased to potential offshore wind developers.

But offshore wind in North Carolina could at some point be limited by the significant commercial interests that want the views from the state’s coast to stay pristine. A recent study released by North Carolina State University researchers garnered some local media attention with its conclusion that an offshore wind farm could be an economic drain on North Carolina tourism industry by reducing the rents from beach vacation homes.

Last year the BOEM found no major environmental impacts of leasing in three areas covering 300,000 of acres of ocean near North Carolina. One of these, the Kitty Hawk Wind Energy Area, is off North Carolina’s Outer Banks, a region popular with tourists.

In 2013, the BOEM identified five different potential offshore wind developers that have expressed interest in leasing portions of the Outer Continental Shelf near North Carolina: Dominion Resources Inc. utility subsidiary Virginia Electric and Power Co.EDF Group subsidiary EDF Renewable Development, New Jersey-based offshore wind company Fishermen’s Energy LLC, Green Sail Energy LLC and Outer Banks Ocean Energy LLC.

The next step for the BOEM is to publish a proposed sale notice, which will propose a specific area to be leased, describe the process for auctioning the leases and give developers an opportunity to submit their qualifications. The bureau plans to release that notice for public comment this summer, according to BOEM spokeswoman Tracey Moriarty.

The Kitty Hawk Wind Energy Area begins about 24 nautical miles from shore. The North Carolina State University study revealed some pitfalls for offshore wind farms if they are ever pursued closer to shore. The researchers showed study participants a set of photos of offshore wind turbines at various distances offshore, from five to 18 miles. The participants were then asked if they would rent a beach home with the turbines in view. The study found that 54% of participants would not rent a vacation home if turbines were in view at all, even if offered a discount to the rental price. Some participants were willing to accept the view of the turbines if given discounts of varying amounts.

Based on these discounts, the study calculated that a wind farm built five miles offshore and affecting the views of 1,000 homes would have a negative economic impact of $31 million over 20 years due to lower rents and the fact that some vacationers would be deterred from renting at all.

The study could have implications for other states considering offshore wind. “Our findings are relevant to other coastal regions that are family-oriented communities with many repeat visitors and have lower-density development that is mostly beach houses — these features are common all along the Atlantic seaboard,” North Carolina State University Center for Environmental and Resource Economic Policy Director Laura Taylor said in a statement.

But North Carolina is likely many years away from a conflict erupting between wind farms and beachfront property.

Duke Energy Corp., which serves 3.3 million electric retail customers in North Carolina through its utility business, has said it is not considering offshore wind at this time. That stance could change if the BOEM starts opening up more of the nearby ocean to wind turbines. “Anytime it’s in our backyard, we would definitely take a look at it,” Duke spokesman Randy Wheeless said. But “right now, our interest is not in the offshore variety.”