Maryland considers offshore wind applications

Maryland moves closer to offshore wind development, as the state Public Service Commission reviews two applications for offshore wind projects.

The Maryland Offshore Energy Act of 2013 contains a number of provisions that would benefit a “qualified offshore wind project” that

1. is located on the outer continental shelf, between 10 and 30 miles off the Maryland coast, in an area that is designated for leasing by the Bureau of Ocean Energy Management within the U.S. Department of the Interior,
2. interconnects to the PJM Interconnection grid at a point located on the Delmarva peninsula, and
3. is approved by the Public Service Commission.

On February 25, 2016, the Maryland Public Service Commission opened an application period for Offshore Wind Projects.  While the original deadline was August 23, it was ultimately extended three times, until November 18, 2016.

On November 22, the Commission's consultant announced that two offshore wind project applications were submitted, found to be administratively complete, and found to have met the minimum threshold criteria. The applicants are (i) US Wind, Inc., a subsidiary of Toto Holding SpA, and (ii) Skipjack Offshore Wind, LLC, a subsidiary of Deepwater Wind Holdings, LLC.

The Commission then opened a docketed proceeding (Case Number 9431) to conduct a multi-part review to evaluate and compare the proposed offshore wind project applications submitted by US Wind and Skipjack.  Petitions to intervene in that proceeding are due by Monday, December 12, 2016.

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?