Maryland offshore wind sites auctioned

The U.S. Bureau of Ocean Energy Management has sold the rights to lease sites for offshore wind projects in federal waters off Maryland to US Wind Inc. for $8.7 million.

A lighthouse on an island in the Atlantic Ocean, off Maine.

Part of the Obama administration's "Smart from the Start" offshore wind leasing program, yesterday's auction covered the rights to lease nearly 80,000 acres of the outer continental shelf.  The Maryland Wind Energy Area ranges seaward from about 10 nautical miles offshore Ocean City.  According to Department of Energy’s National Renewable Energy Laboratory, the area could support between 850 and 1450 megawatts of commercial wind generation.

The Maryland auction drew three bidders: US Wind Inc., Green Sail Energy LLC and SCS Maryland Energy LLC.  After 19 rounds, BOEM declared US Wind Inc. the provisional winner.  US Wind Inc. is a subsidiary of Italian firm Toto SpA's Renexia group. 

While winning the auction is an important first step in leasing federal ocean sites for offshore wind projects, the process will likely continue to play out for several years.  Following the auction results, US Wind Inc. will have one year within which to submit a Site Assessment Plan to BOEM for approval.  In the Site Assessment Plan, the lessee must describe what it intends to do to assess of the wind resources and ocean conditions of its commercial lease area -- for example, installing meteorological towers and buoys.  If that plan is approved, the lessee will then have up to 4½ years in which to submit a Construction and Operations Plan providing more detailed information for the construction and operation of a wind energy project on the lease.  The filing of that plan triggers further public comment and environmental review; if approved, BOEM will then issue a lease with an operations term of 25 years.  Notably, these leases generally require the lessee to pay ongoing rents; placing the winning bid in the auction conveys the right to pay that rent, but paying that bid does not count towards the lease payment obligation.

Moreover, this entire leasing process is just one of several aspects of the project that must move forward in parallel.  At the same time, US Wind Inc. is likely considering engineering issues such as turbine selection and interconnection design as well as how to finance the project.

Will federal waters offshore Maryland soon become home to an offshore wind project?

February 7, 2011 - $50 million more for offshore wind

Offshore wind just got another boost.   Today Secretary of the Interior Ken Salazar and Secretary of Energy Steven Chu released a joint National Offshore Wind Strategy, which bills itself as the first-ever interagency plan on offshore wind energy.  As part of this strategy, the U.S. Department of Energy envisions 10 gigawatts of offshore wind generating capacity by 2020 and 54 gigawatts by 2030.

That's not all: the Secretaries also announced up to $50.5 million in new funding for projects that support offshore wind energy deployment.  The plan includes three solicitations, proposing to award up to $50.5 million over 5 years, to promote offshore wind R&D and eliminate market barriers.  Up to $25 million will be available for technology development for wind turbine design tools and hardware.  Up to $18 million will be available for studies and research to identify and remove market barriers.  Up to $7.5 more million will bne used to fund R&D into wind turbine drivetrains.

The announcement also includes the designation under the "Smart from the Start" program of high priority Wind Energy Areas on the Outer Continental Shelf (OCS) offshore of Delaware, Maryland, New Jersey, and Virginia.  To reduce the burden on project developers, these areas will receive advanced environmental reviews by the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).  If BOEMRE's review does not identify any significant impacts, leases could be available by the end of this year.