by ROCKMAN » Sat 12 Jul 2014, 23:04:32
"...state governments and big companies are finally starting to take the U.S. offshore wind industry seriously. Several offshore wind leases that took place off the coasts of Massachusetts, Rhode Island and Virginia have also helped move the industry forward." Well, it's nice to see other states starting to catch up with Texas:
The initial offshore Texas wind leases were granted almost 10 years ago. The General Land Office worked aggressively to develop wind power off the Texas coast. For Texas, renewable energy on state lands means renewable revenue for public education. The state's oldest agency has already racked up a series of firsts for the nation, including the first and largest lease for offshore wind power development. The Land Office - always eager to earn money for the state's Permanent School Fund - even held the nation's first competitive bidding process for offshore wind power leases. The multi-million dollar lease, signed with Galveston-Offshore Wind constructed two meteorological towers. In 2008, the U.S. Army Corps of Engineers approved construction by Coastal Point Energy of the offshore meteorological towers at the site of the company's planned Galveston Wind Project. The company has since used the tower to gather over 30 months of wind data, which confirmed the site's "superior" profile for wind power generation,The towers gathered pertinent data for permanent placement of wind turbines on the 11,355 acre lease approximately 7 miles off the coast of Galveston, Texas. Coastal wind power has come to the United States and found a home in Texas. Once completed, the offshore wind farm will produce enough electricity to provide power to about 40,000 homes. By comparison, an equal amount of electricity would require about 20.7 million barrels of oil, or 6.5 tons of coal to produce. By not burning these fossil fuels to create this amount of energy, the wind farm will displace approximately 2.7 million tons of carbon dioxide each year.
And why has the process moved more smoothly along the Texas coast then in New England? Coastal Point holds leases from the state General Land Office for 85,422 acres at five sites, which the company hopes to develop into a total of 2,100 MW. In addition to the 300 MWs planned for Galveston, the company also envisions: the 300 MW Jefferson Wind Project; 500 MW Brazoria Wind Project; 500 MW Corpus Christi Wind Project; and 500 MW Brownsville Wind Project. If Coastal Point Energy is the first to cross the symbolic 'first-in-the-water' mark, the company may have a peculiar quirk of history to thank. When the short-lived Republic of Texas entered the Union in 1845, the state retained claim to all public lands within it's territories, including control of marine territory extending to 10.3 miles offshore, rather than the typical nautical miles standard for all other states. Like oil and gas development, offshore wind projects within 10.3 miles of Texas shores therefore face a streamlined permitting process dealing primarily with energy-friendly state regulators. Texas projects need not secure permits from the Federal Energy Regulatory Commission or the Bureau of Ocean Energy Management, Regulation, and Enforcement. Thus Coastal Point Energy and other Texas wind developers can avoid the thicket of federal permitting processes that took the much-publicized Cape Wind project in Nantucket Sound a full decade to navigate. And there's another great advantage over offshore New England projects: the vast majority of Texas coastal residents support the projects. And being done with some help from our European cousins: Gulf Offshore Wind: The Baryonyx Corporation, run by veterans of Europe’s wind energy industry, will build an 18-megawatt pilot project four to five miles off Texas’ Port Isabel in the Gulf of Mexico, with five 6-megawatt turbines: the Rio Grande Project. The Baryonyx Corporation also has development leases from the Texas General Land Office for a 2,000-megawatt to 2,400-megawatt project five to ten miles off Texas’ South Padre Island.
Not such a smooth road elsewhere: Great Lakes, Atlantic Projects Also Advancing, but Federal Policy Uncertainty Plagues Development:
Several offshore wind projects are also pressing forward in the Great Lakes and Atlantic Coast regions, although most must navigate a tricky course through state and federal permitting, tricky project financing, and an uncertain future for national renewable energy policy. After more than a decade, the Massachusetts Cape Wind project, long billed as "America's first offshore wind farm," finally secured all necessary federal permits in January and was cleared in April by U.S. Interior Secretary Ken Salazar to begin construction. But the project has only secured a power purchase agreement for half of its planned 468 MW of output, and still must arrange financing for the $2 billion project. Energy Management Inc., the company behind Cape Wind, had hoped to finance 80% of the project with a help from a Department of Energy loan guarantee program for innovative energy technologies. Those plans were thrown into disarray in May when DOE notified Cape Wind that its application would not be completed by September 30th, the end of the federal fiscal year. Cape Wind's application is therefore among hundreds of others 'on hold' until uncertainty over the fate of the loan guarantee program's budget is resolved. As a part of the budget deal to prevent a government shutdown, Congressional lawmakers agreed to eliminate most new funding for the two DOE loan guarantee programs designed to help renewable and other advanced energy projects secure financing. Energy and Water Appropriations Subcommittee released a fiscal year 2012 budget proposal on June 1st that would virtually eliminate the two loan guarantee programs. The proposed budget would provide just $160 million of the $1.06 billion requested by the Obama Administration. The Cape Wind developers will now have to turn to a more traditional -- and costly -- project finance route, securing a mix of financing from commercial banks, foreign export credit agencies, and bond markets. Barclays Capital, the project's financial adviser, is already seeking equity investment partners.
Federal budget uncertainty may have also derailed a Delaware project that once appeared poised to contend with Cape Wind to be the first in Atlantic waters. NRG Bluewater Wind, which plans a 200 MW wind farm located 13 miles off the Delaware coast, announced on May 30th that it would delay construction of a meteorological tower at the project site, blaming the uncertain federal policy environment for renewable energy development. The budget troubles plaguing the DOE loan guarantee programs as well as continued uncertainty about the long-term fate of the federal production tax credit for wind energy, has injected considerable uncertainty into the financing for and viability of all U.S. offshore wind projects. Bluewater has a 25-year power purchase contract with Delmarva Power, provided it begins producing power by 2016.
The long-term prospects of offshore wind energy development could be boosted by the Atlantic Wind Connection, a $6 billion plan to build a high-voltage, long-distance transmission 'backbone' linking offshore mid-Atlantic wind farms stretching from Virginia to New Jersey. The project, led by Trans-Elect Development Corp. and Atlantic Grid Development and financially backed by Google, Good Energies, and Marubeni Corp., plans to bury high-voltage direct-current cables 22 miles off the coast, linking wind farms with 6,000-7,000 megawatts of capacity. Power would come ashore at four coastal intertie locations, providing access to the power markets serving the major population centers of the mid-Atlantic corridor, from Washington DC to New York City. The Federal Energy Regulatory Commission recently approved an above-market 12.59 percent rate of return on equity as an incentive to buoy development of the Atlantic Wind Connection, although the project is just beginning the long process of securing federal permits, performing environmental assessments, and winning approval from the PJM Interconnection, the mid-Atlantic regional grid operator.