March 29, 2011 - Delaware offshore wind site lease moves forward

Tuesday, March 29, 2011

Offshore wind in Delaware just got a boost, as the U.S. federal government is moving forward with a site lease with NRG Bluewater Wind.  This represents the first commercial wind lease under the “Smart from the Start” Atlantic Offshore Wind program.  Under that program, the Department of Interior's Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) is charged with streamlining the regulatory process for offshore wind projects.  An early step in the Smart from the Start process is BOEMRE's issuance of a request for interest (RFI) in obtaining commercial leases for the construction of wind energy projects on the Outer Continental Shelf (OCS).  Under the federal OCS Lands Act, before developers can lease sites from the government, BOEMRE must determine if there is competitive interest in developing projects in a particular zone of the OCS.  If two developers’ staked areas of interest fully or partially overlap, BOEMRE will determine that there is competitive interest in the area, triggering a competitive leasing process for that zone.  If developers’ interests do not overlap, BOEMRE may proceed with a simpler noncompetitive lease process.

For the Delaware OCS sites, BOEMRE's April 2010 RFI received only one qualified response: Bluewater Wind Delaware, LLC's proposal to site a project 11 miles east of Dewey Beach.

To see if any other developers were interested in Bluewater's proposed site, BOEMRE published a second notice in January 2011, which did not reveal any additional expressions of interest.  (You can find the public comments here.)  BOEMRE thus determined that there is no competitive interest for commercial wind energy development in this area of the Outer Continental Shelf, placing Bluewater's project on the faster non-competitive track.  This determination will soon be published in the Federal Register.

NRG, which joined with Bluewater in developing the Delaware project, has entered into an agreement to sell power from the project to Delmarva Power, Delaware's largest utility.  Next steps include moving forward with the noncompetitive leasing, which will entail several layers of environmental reviews, other regulatory approvals, and technical engineering for the project.

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