Guest piece from Fatima Maria Ahmad, Manager, Federal Regulatory Affairs and Offshore Wind at AWEA
On 28 September 2015, the White House convened a Summit on Offshore Wind, bringing together leading federal, state, and industry stakeholders committed to the long-term and sustainable development of offshore wind in the United States. At the Summit, the White House announced a number of new initiatives:
- The White House Council on Environmental Quality and Domestic Policy Council will co-chair an Interagency Working Group on offshore wind to ensure better coordination among Federal agencies.[1]
- The U.S. Department of Energy will fund a multi-state effort by New York, Maine, Massachusetts, and Rhode Island to identify opportunities to cooperatively develop offshore wind on a large-scale in order to achieve economies of scale and establish a regional supply chain. A regional approach will enable the development of gigawatts, rather than megawatts, and is a necessary step in the U.S. where federalism requires partnerships among states as well as between states and the Federal government.
- The U.S. Bureau of Ocean Energy Management (BOEM) will establish an International Offshore Wind Regulators Forum with the United Kingdom, Denmark, and Germany to share lessons learned, discuss regulatory approaches and best practices, and exchange scientific and environmental information. The U.S. seeks to leverage the experience of international partners in order to enable innovation at home, both regulatory and technological.
The White House Summit signifies that a groundswell of support for offshore wind has reached the highest political office in the United States. With Deepwater Wind’s Block Island Wind Farm beginning offshore construction in July, there is now a real political opportunity to make headway on offshore wind because it is clear to leaders that the U.S. has moved from theoretical discussions to “steel in the water.”
This year, in addition to the Block Island milestone, site surveys were completed on the proposed 500 MW US Wind project offshore Maryland, which is targeted for completion in 2020. We also witnessed the entry into the US market of a major European player in offshore wind, DONG Energy. DONG Energy identified significant market potential in the United States and took over the lease for a Massachusetts Wind Energy Area from RES Americas Developments to develop a project that may generate over 1000 MW.
Looking forward, BOEM just announced that it will lease the New Jersey Wind Energy Area in November 2015, which is over 300,000 acres and could support 3,400 MW of generation. BOEM also announced that it completed environmental review of the North Carolina Wind Energy Areas, opening the door to leasing there. Finally, BOEM signaled that significant progress is being made towards identifying Wind Energy Areas offshore South Carolina and New York.
As with any new industry, challenges in developing offshore wind in the United States are to be expected. The price of offshore wind will need to decline to enable expanded deployment. Permitting timelines must accelerate. Stronger market demand signals are needed from state governments and others. In the United States, state regulatory commissions have the authority to review power purchase agreements on behalf of consumers and they look closely at the costs of offshore wind compared to alternatives such as natural gas and land-based wind. Along the East Coast, however, there are niches with high wholesale power prices due to transmission constraints where the higher capacity value of offshore wind compared to land-based wind, its hedge value relative to natural gas, and policy support can help close the price gap. As a result, as detailed above, significant progress is being made towards launching the offshore wind industry in the U.S.
The big picture is that the U.S. is making progress on the President’s climate agenda through the announcement of the Clean Power Plan, which will reduce carbon dioxide emissions by 32 percent from 2005 levels by 2030 and the joint statement with Brazil on doubling non-hydro renewable energy to 20% by 2030. It is now clear that 2015 is the year that offshore wind development became a part of that climate agenda.
In this historic time for the U.S. offshore wind industry, the American Wind Energy Association (AWEA) is playing a pivotal role by organizing all segments of the offshore wind industry, including developers and companies that will comprise the supply chain, to represent their voice before decision-makers. AWEA will build on the political capital it developed by successfully supporting the land-based wind industry in the United States which has achieved historic levels of deployment at 67,870 MW. The AWEA Offshore Wind Committee consists of very active and engaged companies who are taking a leadership role in the development of the offshore wind industry in the United States. AWEA provides a significant level of expertise to these leading companies regarding their policy and advocacy needs, resolving legislative, regulatory, siting/environmental, legal analysis, and media relations issues.
From AWEA’s perspective, it is clear that as the White House prepares for the United Nations Framework Convention on Climate Change Conference of the Parties in late November, offshore wind may very well be a part of any post-2020 compliance plan toolkit. AWEA celebrates the fact that for the United States, the road to Paris includes a stop in Rhode Island.
[1] Participating Federal agencies will include the Department of the Interior, including the Bureau of Ocean Energy Management (BOEM), the National Park Service, and the Fish and Wildlife Service; the Department of Energy; the Department of Defense; the Department of Transportation, including the Federal Aviation Administration; the Department of Commerce, including the National Oceanic and Atmospheric Administration and the International Trade Administration; the Environmental Protection Agency; the Department of Homeland Security, including the US Coast Guard; the Army Corps of Engineers; and the Advisory Council on Historic Preservation.
