Governors’ letter to Trump highlights offshore wind’s potential

Source: By David Foxwell, Offshore Wind Journal • Posted: Tuesday, February 21, 2017

A coalition of state governors led by Gina Raimondo, Governor of Rhode Island and Sam Brownback, Governor of Kansas, have written to US President Donald Trump asking him to support offshore wind and solar energy projects.

The Governors’ Wind & Solar Energy Coalition says that if the US does not continue robust federal research and development programmes in wind and solar energy, “we will cede leadership in these critical technologies to other nations that have demonstrated ongoing high priority commitments to these technologies, such as China.” The governors said: “We would also cede the resulting economic development benefits to these nations and would be importing the great majority of our wind and solar equipment from them.”

In the 13 February 2017 letter, the bipartisan group of governors describe the growth of the renewable energy industry as “an American success story built on federal research and development, state policy leadership, private sector investment, and ingenuity.” The letter notes that “a new chapter of that story” began last year when the first offshore windfarm went into service in the waters of Rhode Island.

“Members of the coalition have seen the benefits of renewable energy first hand, and agree that expanding renewable energy production is one of the best ways to meet the country’s growing demand for energy. Today’s wind and solar resources offer consumers nearly unlimited electric energy with no fuel costs, no national security impacts, and a number of environmental benefits. The boons of renewable energy can be virtually endless with your administration’s and Congress’ support,” they told President Trump. “Your support of these initiatives will allow our nation to capitalise on renewable resources, meet the needs of Americans and bolster the economy.”

“Offshore wind is an abundant source of renewable energy handily located near some of our nation’s largest cities and densest areas of population. However, the US boasts just one active offshore project – the Block Island windfarm off the coast of Rhode Island,” the governors pointed out, noting that Europe currently has 11 gigawatts (GW) of offshore wind installed.

They also highlighted the US Department of Energy’s 2015 Wind Vision Report, which predicted that US offshore wind resources could support the installation of 22GW of new wind by 2030 and 86GW by 2050.

“If we capitalised on that potential, a new American offshore wind industry could create thousands of jobs in research and development, engineering, manufacturing, marine construction and other sectors,” the governors said, but noted that offshore wind needed tax incentives, infrastructure investment and research.

“Understanding this, the governors recently informed Congressional leadership that the nation’s offshore wind industry cannot grow without specific federal policy foundations that will encourage offshore wind development in shallow and deep water. The governors have urged Congress to approve comprehensive offshore development legislation as soon as possible.

“Offshore wind investors need a faster return on their long-term investments, which is why the investment tax credit (ITC) is a better incentive for offshore wind development than the production tax credit (PTC). Tax incentives for the first offshore wind projects will ultimately reduce costs for future projects and for consumers. For offshore wind to be successful, a long-term extension of a 30 per cent investment tax credit is critical,” they told President Trump.

“Unfortunately, Congress has passed only short-term extensions of the investment tax credit that will expire before a majority of offshore wind projects will qualify. In fact, the National Renewable Energy Laboratory’s analysis of the impacts of the recent PTC and ITC extensions found that no offshore wind projects would qualify prior to the 2019 expiration date. The investment tax credit also phases down, similar to the production tax credit, removing the effectiveness of the incentive.

“Investor confidence in the nation’s offshore wind potential is strong today. Six companies from around the world recently competed in a federal auction for the right to explore building offshore wind energy facilities on the Outer Continental Shelf. This is evidence of the private sector’s support for offshore wind development, but that support will disappear without a strong national policy foundation. It is our hope that your administration and Congress will support a long-term extension of a 30 per cent investment tax credit for offshore wind.”