Could first U.S. offshore wind farm be in Texas?

Source: By JAMES OSBORNE, Staff Writer, Dallas Morning News • Posted: Tuesday, November 19, 2013

After years of struggles, offshore wind power developers

Five miles off the coast of South Padre Island lays the beginning of the Gulf Offshore Wind Project, which developers like to refer to by the optimistic acronym GOWind.

Right now the only thing marking the 41,000 acres in the Gulf of Mexico that have been leased is a buoy recording the paths of the birds and bats flying overhead. But in three years’ time, a team including university professors and a former British oil executive is hoping to have the nation’s first commercial scale wind farm installed and eventually generating enough power for 1.8 million homes – at least when the wind is blowing.

Wind is an increasing source of electricity across the globe. In Japan, this turbine off the coast of Fukushima recently began feeding electricity to the grid tethered to the tsunami-crippled nuclear plant onshore.

Earlier this month, Samsung Heavy Industries began testing a 7-megawatt turbine off the coast of Methil, Scotland. It’s described as the world’s largest and most powerful offshore wind turbine.

This offshore wind farm opened off the coast of Ramsgate in Kent, England, in 2010 as the largest site of its type at the time. The wind farm has 100 turbines and generates power for the equivalent of 200,000 homes.

In October, Spain launched its first offshore wind turbine — a 505-foot tall, 5-megawatt turbine — at the end of a dike in the port of Arinaga in Gran Canaria. It offered a moment of fleeting pride to an industry flagging from a decline in state subsidies

“It makes the most sense for Texas to have the first offshore wind farm. It’s already the leader in onshore wind power,” said Heather Otten, chief development officer for Austin-based Baryonyx, the company leading the project. “But there’s a lot more work that goes into an offshore project than an onshore project, I can tell you that.”

While offshore wind power has taken off in countries like Denmark and Japan, the United States has yet to get past the starting line. A wind farm off the coast of Cape Cod was supposed to be the nation’s first, but after more than a decade-long fight with the likes of powerful residents like the late U.S. Sen. Ted Kennedy and billionaire William I. Koch, that project remains mired in litigation.

Wind on the ocean is more reliable than wind on land and tends to blow more during the day when power demands are at their greatest; the opposite is true of onshore wind projects. But from aesthetics to interference with migratory bird paths, opposition runs the gamut.

Price remains the biggest hurdle for offshore wind development in the United States, where government subsidies are a fraction of those in Europe, experts say.

Building a megawatt of offshore wind power is estimated to cost twice as much as its equivalent on land. Even so, that might have made sense five years ago, when electricity prices were rising fast. But the hydraulic fracturing boom has put vast quantities of cheap natural gas on the market, upending the power industry and making projects like GOWind that much more difficult.

“The bottom line is it comes down to the price of electricity, and right now electricity is cheap,” said Wei-Jen Lee, a professor of electrical engineering at the University of Texas-Arlington. “Eventually offshore wind will be part of the picture. In the long run, the renewable energy price is going to come down and fossil fuels is going to go up. They’re going to coexist.

But predicting the timing is guesswork at best.

The GOWind project began four years ago when Baryonyx CEO Ian Hatton bought the Gulf of Mexico lease from the Texas General Land Office. Unlike the rest of the country, Gulf states control the water nine miles out, not three.

Hatton spent the first two decades of his career working for oil companies including Phillips Petroleum, which merged with Conoco in 2002. In 1999, he left to launch a new offshore wind company that would eventually build a 150-megawatt farm in the Irish Sea. But before that would happen, Hatton sold out to a Swedish power utility in 2008 and headed to Texas.

The lure of the gulf was clear. Shallow waters made construction easier than Pacific and Atlantic Ocean projects, where developers sometimes resort to floating turbines. And the presence of the offshore oil industry meant there was a ready supply of metal fabricators ready to go. Hatton brought on partners like Texas A&M and the German industrial giant Siemens

When electricity prices crashed the project looked doomed. But then last year the U.S. Department of Energy announced it was funding preliminary design and engineering work on seven offshore wind projects to the tune of $4 million apiece, including GOWind.

“We wanted to spur the market,” said DOE spokeswoman Niketa Kumar. “Last year, wind power was 40 percent of the new generation installed in the U.S. And as the cost of onshore comes down, offshore is looking more and more feasible.

In May, federal officials will announce which three projects get full funding of $47 million. Developers will have to pick up the rest.

But in the meantime, GOWind will need to prove not only its financials but that the more than 600-foot tall wind turbines will not have a negative impact on the maritime ecology. Last year the Texas Parks and Wildlife Department condemned the project as potentially harmful to migratory birds and the Gulf fishing industry.

Right now scientists working for Baryonyx are trying to disprove that point. The buoy floating on their 40,000 acres is part of an elaborate endeavor to show that migratory birds largely fly above the height of the turbines.

In the meantime, the GOWind team is trying to line up a deal for someone to buy the power, get estimates on undersea cables and a litany of tasks before their application is due in February. Otten declined to comment on the project costs, saying they were still figuring out the numbers. But she was optimistic, not just on the project but the future of offshore wind power itself.

“We’re getting very close to making it work,” she said. ■