Multi-state coordination needed to revive U.S. offshore wind industry — report 

Source: Elizabeth Harball, E&E reporter • Posted: Wednesday, February 18, 2015

Following a lackluster several months for offshore wind in the United States, a new report argues that interstate coordination is essential if the industry is going to get back on its feet.

Noting that the United States seems to have entered the “post-Cape Wind” era, report author and Clean Energy Group President Lewis Milford said in an email introducing the report that “the current policy isn’t working and there is a need for multi-state policy approaches.”

Cape Wind, a proposed 3.6-megawatt offshore wind farm in Massachusetts’ Nantucket Sound, suffered a significant setback in early January when two utilities terminated their contracts to buy power from the project after the developer was unable to close financing by the end of 2014 (Greenwire, Jan. 7).

That is in addition to other challenging developments for the U.S. offshore wind industry. For example, Fishermen’s Energy, a proposed 25 MW pilot project in New Jersey, is still struggling to gain approval from the state’s Board of Public Utilities (ClimateWire, Nov. 25, 2014). And the Interior Department’s recent lease sale of federal waters for offshore wind drew bidding from only two companies, while two lease tracts received no bids at all (E&ENews PM, Jan. 29).

The new report, a collaboration between the nonprofit Clean Energy Group and Navigant Consulting, acknowledges these setbacks, saying, “going forward, there is no solid pipeline of large projects to prove the economic and environmental benefits of this technology and bring it to scale.”

It is therefore necessary to enact “a new policy approach” relying on collaboration up and down the Atlantic coast to establish offshore wind in U.S. waters, the report argues.

Taking lessons from Europe

Despite well over a decade of ardent attempts by U.S. developers, there are no utility-scale offshore wind projects in U.S. waters today. Meanwhile, European countries are now connected to nearly 2,500 turbines as part of 74 different offshore wind farms, reports the European Wind Energy Association. Total installed capacity there reached 8,045.3 MW in 2014.

Although a lack of multi-state policy coordination could have played a role, there were certainly bigger factors contributing to Cape Wind’s recent setback, Milford said in an interview. The project was beset with litigation and, as the first of its kind in the United States, was forced to slog through unprecedented regulatory hurdles at both the state and federal levels.

But Milford said that, even if Cape Wind were under construction today, the lack of certainty and cohesive policy among Eastern Seaboard states would still be discouraging investors, both domestically and overseas, from placing any big financial bets on U.S. offshore wind.

“Even if Cape Wind had gone forward and succeeded, the next question would have been: Where’s the next big project behind it?” Milford said.

The report suggests multiple strategies to amend the situation. One is to set a regional offshore wind target, as this tactic seems to have succeeded in Europe, which set a target of 40 gigawatts of offshore wind energy by 2020. Individual states, like Maryland, New Jersey, Massachusetts and Maine, have already set individual targets, the report notes.

Another suggestion is for states to jointly get behind one or more offshore wind developments rather than supporting projects individually. This could reduce the substantial overhead costs associated with the technology, the report argues, and provide developers with additional certainty.

Standardized permitting would also be a big step toward providing more certainty to developers, the report adds.

Milford acknowledged apparent opposition from Republican leadership to offshore wind in several Eastern Seaboard states, but he said the report aims to move beyond politics and establish a workable framework.

“None of what we’re suggesting is easy to do, and it’s going to be difficult, and it’s going to take some time,” Milford said, adding that given offshore wind’s current status in the United States, it is time to “take a fresh look and see if there’s a way to jump-start this on a larger scale.”

Kate Muller, a spokeswoman for the New York State Energy Research and Development Authority, welcomed the report’s conclusions.

“While there is significant potential and benefits for offshore wind, strategies that make offshore wind more valuable and cost effective need to be identified and pursued,” Muller said in a statement, agreeing with the report’s conclusion that multistate collaboration could reduce costs.

“By enhancing the region’s attractiveness to offshore wind developers, states can set the stage for the next phase of active long-term development of this vast and important renewable resource,” she added.