For First Time, U.S. to Lease Offshore Wind Blocks

By Carey L. Biron Reprint | | Print |

U.S. offshore wind has lagged far behind the country’s onshore wind sector. Credit: Bigstock

WASHINGTON, Jun 4 2013 (IPS) - The U.S. government announced Tuesday that it would be going forward with long-discussed plans to auction federal leases off the Atlantic Ocean coast for the development of offshore wind energy.

The sales, to take place in late July, will be the first time that federal lands have been offered on a competitive basis for the United States’ nascent offshore wind business. Proponents say the industry has significant potential, but for decades it has lagged far behind the country’s onshore wind sector – even as offshore usage has strengthened significantly in other countries.

“Today’s announcement is an important milestone in efforts to launch the offshore wind industry in the United States,” Chris Long, manager of offshore wind and siting policy for the American Wind Energy Association, a trade group, told IPS. “Offshore wind energy represents a significant opportunity for our country, and developing this industry will help to create thousands of new jobs.”

Currently, the Interior Department has approved nine companies to take part in the auction, which will offer around 165,000 acres in two blocks off the coast of the eastern states of Massachusetts and Rhode Island. A third area off the coast of Virginia could be offered for lease later this year.

According to recent analysis by the Department of Energy’s National Renewable Energy Laboratory, the initial two blocks will be able to produce a regular supply of around 3,500 megawatts, enough to power around a million U.S. homes.

Overall, the United States is thought to have around 4,000 gigawatts (or four million megawatts) of offshore wind potential. That’s almost four times the country’s current electricity production of all types.

“This leasing announcement is a big deal, a significant move forward on what has been an extensive process to identify appropriate sites and give access to try to build in the water,” Dave Hamilton, the director for clean energy with the Sierra Club, a conservation group, told IPS.

“These are important steps, but now getting equipment in the water, finding communities or entities to buy the power at the price producers can make it – that’s all still ahead of this project.”

Proponents have long noted that offshore wind has particular potential in the United States given that almost four-fifths of the electricity requirement comes from states along the coasts and Great Lakes, and thus windfarms could be positioned fairly near demand centres.

According to estimates in a recent scientific paper, around a third of all U.S. power demand – or all demand from the East Coast, except during summer – can be satisfied from offshore wind power along the East Coast alone.

Strengthened by government subsidies, the U.S. wind energy sector has grown significantly – albeit belatedly – in recent years, currently comprising some three percent of the country’s overall power mix. Meanwhile, the offshore sector has lagged far behind, in part due to the significantly higher costs and technicality associated with installing a turbine on water.

The technology has long existed, however, and many models have already gone through a lengthy process of testing. Just last week, the Energy Department formally announced that a new prototype, a floating turbine in Maine, has been connected to the national electricity grid, the first offshore turbine now operating in the country and the first of seven such experimental projects currently underway.

The U.S. government has green-lighted at least two smaller East Coast offshore wind projects, but these went forward without a competitive bidding process and are still awaiting regulatory approval. While around a dozen privately financed offshore projects are currently being developed, July’s leasing is being touted as the full opening-up of the new industry to the private sector.

“If there is good interest in this one, then I think you will have this happening on a consistent basis,” Sally Jewell, the secretary of the interior, told reporters Monday.

“I can’t promise that they will be in production in four years, but we don’t want to be a roadblock. The market will dictate, but we certainly don’t want to get in the way.”

‘Picking energy winners’

The United States has been falling behind on offshore wind innovation since the early 1990s, when Denmark opened the world’s first offshore wind farm. By today, countries across Europe have constructed some 4,000 megawatts of offshore capacity – a number that is expected to increase to a whopping 40,000 megawatts by 2020, according to 2011 estimates.

China, too, has been moving quickly into all types of wind energy production. Beijing has published plans to expand the country’s still burgeoning offshore sector to 30,000 megawatts by 2020.

Yet when President Barack Obama approved the country’s first offshore power project, in 2010, he came under fire from conservatives, some environmentalists and others concerned about the “aesthetic” impact of the project, including powerful Massachusetts lawmakers.

Yet Tuesday, Ed Markey, the top Democrat on the House Natural Resources Committee and currently a top contender to become a Massachusetts senator, praised the new project.

“Offshore wind is a win for American jobs, for American energy security, and for our environment, and it will start off the coast of New England,” Markey said Tuesday in a statement. “I commend the Interior Department for … conducting these lease sales in a way that will ensure leases go to companies that are serious about developing new wind energy.”

In deciding on leases, the government will reportedly take into account whether bidding companies already have agreements in place with utility companies that can purchase the power.

Meanwhile, renewable energy in recent years has become almost inexplicably politicised in the United States, particularly here in Washington. Already, Republican members of Congress have expressed scepticism over the new plan for offshore leasing.

On Tuesday, several conservatives highlighted the perceived discrepancy between President Obama’s advocacy for offshore wind and his hesitancy regarding plans for offshore oil drilling. They also accused him of intervening in the market and “picking energy industry winners and losers”.

“Opponents of offshore wind projects have taken on some very unusual tactics for people who claim to support economic development and diversified energy options,” the Sierra Club’s Hamilton says.

He notes that two highly visible funders of conservative causes, oil refinery magnates Charles and David Koch, have been actively opposed to the development of offshore wind production capacity.

One key focus of this pressure could be on members of Congress, who by the end of the year must decide whether to renew a subsidy – known as the federal investment tax credit – considered key for the offshore industry’s attempts to get off the ground.