Offshore Wind Power's Contribution to 20% Wind Energy by by wqz13019

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									  Offshore Wind Power’s
 Contribution to 20% Wind
      Energy by 2030


                   December 2, 2008




  Outline


20% Wind Energy by 2030: Offshore Wind Power’s
Contribution
 • Jen Banks, American Wind Energy Association

Recent Developments in the Offshore Wind Landscape
 • Laura Smith Morton, Fulbright & Jaworski L.L.P.

Government Actions to Promote Offshore Wind Energy
Production
 • Jim Lanard, Bluewater Wind




                                                     1
                     20% Wind Energy
                         by 2030
                    Offshore Wind Power’s Contribution




                              Jen Banks
                    American Wind Energy Association




20% Wind Scenario


Explores one scenario for reaching 20% wind
electricity by 2030 and contrasts it to a scenario in
which no new U.S. wind power capacity is
installed
Is not a prediction, but an analysis based on one
scenario
Analyzes wind’s potential contributions to energy
security, economic prosperity and environmental
sustainability
Would require about 300 GW (300,000 MW) of
wind generation




                                                         2
                                            Resource Potential Exceeds Total
                                            Electricity Demand
                                  180
                                                 Land-Based          Offshore                                          Deep Offshore
                                                       Class 7              Class 7
                                  160                                       Class 6
                                                       Class 6
Levelized Cost of Energy, $/MWh


                                                       Class 5              Class 5
                                  140                                                            Shallow Offshore
                                                       Class 4              Class 4

                                                       Class 3              Class 3
                                  120
                                                                 Land-Based
                                  100

                                   80

                                   60
                                                     United States has ample wind resources,
                                                The United States has ample wind resources,
                                   40           including more than 8,000 GW land-based—
                                                          more than 8,000 GW onshore —the
                                                the most affordable type harness.
                                                most affordable type to to harness.
                                   20

                                   0
                                                  2,000             4,000             6,000          8,000            10,000
                                                                         Quantity Available, GW
                                                                                         2010 Costs w/o PTC, w/o Transmission or Integration costs




                                            Resource Economically Available Including
                                            Transmission Costs Can Support 20% Wind
                                  160                                                          10% of existing transmission
                                                 Land-Based          Offshore                  capacity available to wind
                                                       Class 7              Class 7
                                  140                  Class 6              Class 6
Levelized Cost of Energy, $/MWh




                                                       Class 5              Class 5

                                  120                  Class 4              Class 4

                                                       Class 3              Class 3

                                  100

                                   80

                                   60

                                   40

                                   20

                                    0
                                        -              200                  400                   600                  800            1,000
                                                                         Quantity Available, GW
                                  2010 Costs w/ PTC, $1,600/MW-mile, w/o Integration costs
                                                                  2010 Costs without PTC, $1,600/MW-mile, without Integration costs
                                                                                                                                 43




                                                                                                                                                     3
                        U.S. Wind Resource Map




                        Wind Power Classification

    Wind    Resource      Wind Power         Wind Speeda    Wind Speeda
    Power   Potential     Density at 50 m    at 50 m        at 50 m
                              2
    Class                 W/m                m/s            mph

        3   Fair          300   -   400      6.4   - 7.0    14.3   -   15.7
        4   Good          400   -   500      7.0   - 7.5    15.7   -   16.8
        5   Excellent     500   -   600      7.5   - 8.0    16.8   -   17.9
        6   Outstanding   600   -   800      8.0   - 8.8    17.9   -   19.7
        7   Superb        800   -   1600     8.8   - 11.1   19.7   -   24.8
a
    Wind speeds are based on a Weibull k value of 2.0




                        20% Wind Scenario

                                                                              305 GW




                                           Installed Capacity as of July
                                           2008 = 19,500 MW




                                                                                       4
                Annual Installed Capacity vs. Current Installed
                Capacity
                                                                                                             18

                                                                                                             16




                                                                                                                  Annual Installed Capacity (GW)
             Capacity additions in 20% Scenario                                                              14

                                                                                                             12

                                                                                                             10

                                                                                                             8

                                                                                                             6

Actual installations                                                                                         4
2007: 5,329 MW                                        Projected installations
                                                      2008: 7,500 MW*                                        2

                                                                                                             0
                            06

                                  08

                                           10

                                                      12

                                                                 14

                                                                            16

                                                                                       18

                                                                                                  20

                                                                                                        22
                      20

                                 20

                                        20

                                                   20

                                                                20

                                                                         20

                                                                                    20

                                                                                                 20

                                                                                                       20
                                                      Annual GW Installed
Source*: AWEA, 2008




                46 States Would Have Substantial Wind
                Development by 2030




          Wind Capacity
        Total Installed (2030)
                (GW)
                  0.0 - 0.1           Includes offshore wind.
                  0.1 - 1
                  1-5             The black open square in the center of a state represents
                                  the land area needed for a single wind farm to produce the
                  5 - 10
                                  projected installed capacity in that state. The brown square
                  > 10            represents the actual land area that would be dedicated
                                  to the wind turbines (2% of the black open square).




                                                                                                                                                   5
                                             Economic Costs of the 20% Wind Scenario

                                               Incremental investment cost of 20%
                                  $3000
                                                        Wind Scenario
                                  $2500
                                                                                                   2% investment
                                                                                                difference between
       Billions of 2006 Dollars




                                  $2000                                                            20% Wind and
                                                                                                    No New Wind
                                  $1500

                                  $1000

                                      $500

                                        $0
                                                   No New Wind                 20% Wind

                                              Wind O&M Costs       Fuel Costs
                                              Wind Capital Costs   Conventional O&M Costs
                                              Transmission Costs   Conventional Capital Costs




                                         Incremental Cost of Scenario Compared to Natural
                                         Gas Consumer Savings from 2007-2030

            160

            140                                                                     The benefits from reduced
            120
                                                                                    pressure on natural gas
                                                                                    prices across all gas users
            100
                                                                                    would be $150 billion
Dollars*




                          80                                                        (NPV), by itself exceeding
                                                                                    the incremental cost of
                          60
                                                                                    investing in the 20%
                          40                                                        Scenario.
                          20

                                  0
                                             Incremental             Fuel
                                                                    Natural Gas
                                                 Cost              Savings
                                                                   Price Benefits

*NPV in Billions of 2006 Dollars


Source: Hand et al., 2008




                                                                                                                     6
                Wind Could Lead the Fight Against Climate
                Change



                                                      Million Metric Share of
                   2006 CO2 Sources                    Tons/Year      Total
             Power Generation                                  2,328    41.3%
             Transportation                                    1,856    32.9%
             Industry                                            862    15.3%
             Residential                                         327     5.8%
             Commercial                                          210     3.7%
             Other                                                55     1.0%
             Total                                             5,638 100.0%
             Source: US EPA Inventory of US GHG Emissions & Sinks 1990-2006




                Summary: Costs & Benefits

                                                                             $43 billion
                 Incremental direct cost to society
                                                                       50 cents/month avg. hh
                                                                       825 million tons of CO2
  Reductions in emissions of greenhouse gasses and
                                                                              annually
            other atmospheric pollutants
                                                                         $50 to $145 billion

                                                                              8% total electric
                Reductions in water consumption
                                                                               17% in 2030
                                                                          500,000 total with
                                                                         150,000 direct jobs
          Jobs created and other economic benefits
                                                                          $2 billion in local
                                                                          annual revenues

       Natural gas use reductions and present value                               11%
       consumer benefits                                                      $86-214 billion

Sources: DOE, 2008 and Hand et al., 2008




                                                                                                  7
 Offshore Projects


Capital cost reduction of 10%

Turbines only 1/3 of installed project cost

Research Development and Demonstration options
•   Develop certification methods and standards
•   Minimize work at sea
•   Increase offshore turbine reliability
•   Assess potential of ultra-large offshore turbines




    20% Wind by 2030 – Key Findings

20% US wind by 2030 is feasible

Even at 20%, wind still part of an overall portfolio

Substantial net benefits would be realized, and would
be spread across all 50 States

Consistent, long term Federal policies are needed to
realize the full potential of wind

Shows that affordable, accessible wind resources are
available across the nation




                                                        8
   Recent Developments in the
    Offshore Wind Landscape
    Laura Smith Morton, Senior Counsel
            Washington, D.C.

          lmorton@fulbright.com




The Political Landscape




                                         9
                Presidential Platform:
                Investment in Wind Energy

"We should be building windmills all across the country . . . .”
                                              - Barack Obama
                                                March 11, 2008


“That’s one of the reasons I supported the energy bill that was
passed a year ago . . . because it represented a huge expansion
and investment in wind energy . . . . But it’s also a terrific tool
for economic development, especially in rural areas and places
. . . where we could generate as much as half, the equivalent of
half of the electricity needs of the United States . . . .”
                                             - Barack Obama
                                               May 16, 2008




                Presidential Platform:
                     Transmission Lines


 “One of the most important infrastructure projects we
 need is a whole new electricity grid. If we are going to
 be serious about renewable energy, I want to be able
 to get wind power from Minnesota to population
 centers like Chicago . . . .”
                                             - Barack Obama
                                               October 30, 2008




                                                                      10
                Presidential Platform:
            Renewable Electricity Standards

National Renewable Electricity Standard
 ● Percentage of electricity consumed in U.S. must be derived from clean,
   sustainable energy sources
 ● Goals:
       2012: 10%
       2025: 25%


Federal Renewable Electricity Standard
 ● 2020: 30% of federal government’s electricity to come from renewable
   sources




                Presidential Platform:
                   Production Tax Credit



Extend production tax credit for 5 years to encourage
production of renewable energy

“If we don’t get those tax incentives, those federal tax
 breaks in place, then you’re going to see a whole lot of
     wind power generation and industry moving to
      Europe. … It’s already starting to happen.”

                                        - Barack Obama
                                          May 16, 2008




                                                                            11
                  OFFSHORE WIND:
             CONTRIBUTION TO 20% GOAL

Federal Government Progress:
 ●   U.S. Department of Interior’s Minerals Management Service (MMS)
     to publish final regulations on “Alternative Energy and Alternate
     Use on the Outer Continental Shelf” by Year-End 2008


States Proceeding with Offshore Wind Development:
 ●   Massachusetts
 ●   Texas
 ●   Delaware
 ●   Rhode Island
 ●   New Jersey
 ●   On the Horizon?




Federal Lands On the OCS
In 2006, DOE estimated that more than 900,000 MW of potential wind
energy exists off the coasts of the United States.
 ●   “Development of offshore wind energy technologies has the potential to
     provide up to 70,000 MW of domestic generating capacity to the nation’s
     electric grid by 2025.”
         Technology White Paper on Wind Energy Potential on the U.S. Outer
         Continental Shelf, Minerals Management Service, Renewable Energy and
         Alternate Use Program, U.S. Department of the Interior
         http://www.ocsenergy.anl.gov/documents/docs/OCS_EIS_WhitePaper_Wind.pdf



In May of 2008, DOE estimated offshore wind capacity could be about
one-sixth of total wind power generation by 2030.
 ●   28 of the 48 contiguous states have coastal boundaries and use 78% of the
     nation’s electricity




                                                                                   12
               Statutory Authority
For the seabed of the continental shelf beyond state submerged lands,
OCSLA is the authority, MMS the agency. 43 U.S.C. § 1331 et seq.

Before 2005, OCSLA was a statute for leasing “minerals”: oil and gas,
sulfur, and “other” minerals. 43 U.S.C. § 1337(a), (i) & (k).

EPAct 2005 added § 1337(p): DOI acquired the authority to manage
Alternative Energy and Alternate Use (AEAU) projects on the OCS
 ●   DOI may “grant a lease, easement, or right-of-way” on the OCS for
     facilities which “produce or support production, transportation, or
     transmission of energy from sources other than oil and gas.” 43 U.S.C. §
     1337(p)(1)(c).

Primary Statute Governing Environmental Review
 ● National Environmental Policy Act




                                                                                13
                              Principal Statutes Governing
                                  Wind Development
NEPA        (42 U.S.C. § 4331, et seq.)                         Endangered Species Act (16 U.S.C. §§ 1531 -
                                                                1544)
 ●       Requires environmental impact statement                 ●       Consultation with FWS or NFMS on
         for federal actions “significantly affecting                    effects of action on endangered or
         the quality of the human environment”                           threatened species before agency issues
 ●       Triggered by siting on federal land,                            leases or permits
         accessing federal transmission line, federal            ●       Triggered by acts that result in take or
         grants                                                          harm to species or habitat such as site
                                                                         clearing or wind turbine operations
Clean Water Act (33 U.S.C. § 1251, et seq.)
 ●       Regulates discharge of dredged or fill                 National Historic Preservation Act (16
         materials into waters of the United States             U.S.C. § 461 et seq.; 30 C.F.R. parts 60 & 800).
 ●       Triggered by activities that may impact                 ●       Applies whenever a federal “undertaking”
         federal waters, including wetlands                      ●       Agencies responsible are Advisory Council
                                                                         on Historic Preservation, Tribal Historic
Federal Aviation Act of 1958 (49 U.S.C. §                                Preservation Office, State Historic
44718; 14 C.F.R. part 77)                                                Preservation Office, and NPS
 ● Form requiring proposed markings and lighting
     notifies FAA of proposed structures that might
     affect navigable airspace                                  Migratory Bird Treaty Act (16 U.S.C. §§703-
                                                                712)
 ● FAA must review possible impacts to air safety
     and navigation, as well as the potential or adverse         ●       Prohibits harm, possession, or taking of
     effects on radar system                                             migratory bird species, nests, and eggs
                                                                 ●       Strict liability statute
                                                                 ●       FWS is lead agency




                                      Principal Statutes Governing
                                      Wind Development (Cont’d)

  Rivers and Harbors Act of 1899 (33 U.S.C.                       Coastal Zone Management Act (16 U.S.C. §
  § 401 et seq.; 33 C.F.R. parts 320-331 & 40 C.F.R. part
  230)                                                            1451 et seq.)
    ●   Regulates obstructions to navigable waters of the
                                                                    ● States with federally-approved programs for
        United States                                                   coastal zone management play major role in siting
                                                                        wind facilities along the coast and offshore
    ● U.S. Army Corps of Engineers issues permits.
                                                                    ● Applicant for a federal license or permit to
                                                                        conduct an activity “affecting any land or water
  Marine Mammal Protection Act (16 U.S.C.                               use or natural resource of the coastal zone of that
  § 1361 et seq.)                                                       state” must certify that activity will be conducted
                                                                        “in a manner consistent with the program”
    ● Imposes “moratorium” on the “taking” of marine
        mammals. Lead agency either FWS or NMFS
    ● Exceptions relevant to wind development                     Resource Conservation and Recovery
        offshore: intentional take authorization, incidental
        harassment authorization                                  Act (42 U.S.C. § 6901 et seq.)
                                                                     ●     Requires waste generators to determine whether
                                                                           they generate hazardous waste
  Clean Air Act (42 U.S.C. § 7401 et seq.)                           ●     If any, determine how much they generate and
     ●     Requires EPA (or authorized State agency) to                    notify the responsible regulatory agency
           issue a permit before construction of any new
           major stationary source or major modification of a
           stationary source of air pollution                     Marine Protection, Research, and
                                                                  Sanctuaries Act of 1972 (33 U.S.C. § 1401, et
                                                                  seq.)
  Magnuson-Stevens Fishery                                          ● Prohibits, with certain exceptions, the dumping or
  Conservation and Management Act (16                                   transportation for dumping of materials into ocean
  U.S.C. § 1801 et seq.)                                                waters without a permit from the EPA
   ● Federal agencies must consult with the NMFS on                 ● Army Corps of Engineers issues permits
        proposed Federal actions that may adversely affect
        Essential Fish Habitats




                                                                                                                              14
      PROGRESS ON THE
  DEPARTMENT OF INTERIOR’S
ALTERNATIVE ENERGY PROGRAM




      MMS Alternative Energy Program:
              Progress Made

Final Programmatic EIS (PEIS) (issued Nov. 2007)
     http://www.ocsenergy.anl.gov/
● Record of Decision (Jan. 2008)
     http://www.ocsenergy.anl.gov/documents/docs/OCS_PEIS_ROD.PDF
● Adoption of 52 Best Management Practices
Interim Policy for Leasing (issued Nov. 2007)
● Over 40 nominations received
● Lease Form & Information Collection
● Stakeholder meetings with State agencies




                                                                    15
       MMS Alternative Energy Program:
               Progress Made


Regulations (proposed July 11, 2008) 73 Fed. Reg. 39376
      http://www.mms.gov/offshore/AlternativeEnergy/Assets/PDFs/NPRfinalF
      R07-09-08.pdf
● 283 individual comment letters submitted September 8, 2008
● Currently being reviewed by OMB and other federal agencies
● Expected to be finalized and made effective before January 21, 2009

Alternative Energy Study Program (Ongoing)
● Collecting information for pre-lease needs such as basic
  characterization of the environment
● Creation of database of historical properties that may be impacted by
  offshore wind development
● http://www.mms.gov/offshore/AlternativeEnergy/Assets/PDFs/AE_SD
  P_2009_2011_FINAL.pdf




        Interim Policy for Leasing
Interim policy on Offshore Alternative Energy Resource Assessment and
Technology Testing Activities issued Nov. 6, 2007. 72 Fed. Reg. 62673
 ●   http://www.mms.gov/federalregister/PDFs/DataCollectionTechTesting.pdf
 ●   Received over 40 nominations related to approval of meteorological or
     marine data collection facilities

Lease Form MMS-0001: for short-term data collection and testing leases
issued Dec. 14, 2007. 72 Fed. Reg. 71152.
 ●   Limited-term leases authorizing data collection and technology testing
     subject to compliance with relevant federal statutes;
 ●   Requestors must also obtain necessary approvals for the construction and
     placement of associated structures on the OCS lease area;
 ●   No priority rights for commercial sale or distribution

On April 18, 2008, MMS designated five areas as priorities for alternative
energy research. Ten proposed wind energy projects could go forward
in the waters offshore New Jersey, Delaware, and Georgia. 73 Fed.
Reg. 21152.




                                                                                16
                     Proposed Rule:
                        Major Elements
Leasing Process and Issuance        Payments (Subpart E)
(Subpart B)
 ● Competitive & Noncompetitive      ● Bonding & Payments
   Leasing
 ● Commercial & Limited Leases
                                    Decommissioning (Subpart I)
Plans (Subpart F)
 ● Site Assessment & Construction
   & Operations                     Alternate Use (Subpart J)
 ● General Activities

Conduct of Approved Plan
Activities (Subpart H)
 ● Environmental & Safety
   Monitoring & Inspections




          The Rule: Lease Process

 Call for Information
 Area Identification
 Lease Sale Compliance Documents (e.g., EIS, ESA)
 Proposed Notice
 Final Notice
 Award Lease




                                                                  17
         The Rule: Lease Process

Leases issued on a competitive basis unless there is no
competitive interest
● Section 388: Secretary shall issue a lease, easement, or right-of-way on
  a competitive basis unless the Secretary determines after public notice
  of a proposed lease, easement, or right-of-way that there is no
  competitive interest

Competitive or Non-Competitive
● Competitive bidding process, possibly including auctions of proposed
  sites
● Alternative methodologies for resolving lease requests from different
  proponents involving overlapping areas.
● Non-competitive? Similar to negotiated agreements for conveyance of
  sand or gravel on the OCS




         The Rule: Lease Process

At each stage, MMS will conduct required Federal
environmental compliance (e.g., NEPA, ESA, MBTA,
MMPA) and technical reviews
● Applicant pays for NEPA compliance

Coastal States potentially impacted by proposed lease and
project retain a consulting role in leasing process
● Coastal Zone Management Act (CZMA) and individual state’s
  federally-approved coastal zone management plans
● Access to grid

Must obtain all permits otherwise required under state or
federal law (e.g., state energy plans, Army Corps of
Engineers’ permits)




                                                                             18
                The Rule: Lease Types
Commercial Lease: Full development and power generation
 ●    Access and operational rights to produce, sell, and deliver energy
 ●    6-month preliminary term
 ●    5-year site assessment term
 ●    25-year operations term; can be relinquished

Limited Leases: Resource/site assessment and technology testing
 ●    Access and operational rights to conduct short-term activities
 ●    6-month preliminary term
 ●    5-year operating term
 ●    Cannot be converted into commercial leases

Both types include a project easement for necessary wires, cables or
pipelines necessary for transmission and/or transportation of energy to
shore (subject to state rights)
 ● Can be added through an addendum to lease without separate, competitive process




            The Rule: General Requirements
                for Competitive Leases

 Developer’s general eligibility (i.e., U.S. citizen or resident
 alien over 18 years of age)
 Posting of security:
  ●      $100,000 initial bond proposed
  ●      Additional bonds possible with site assessment and construction and
         operations plans
 Mandatory payments to U.S.
  ●      Upfront payments of site acquisition fee or deposit on cash bonus
         established through solicitation
  ●      Ongoing rental and operating fees for site and rights-of-way and easements
 Minimize adverse effects on marine and coastal environment
  ●      Comply with site assessment and construction and operations plans
  ●      Make available to MMS all data about project




                                                                                      19
                   The Rule: Plans

Site Assessment Plan (SAP) – describes assessment and
survey activities needed to characterize the site (applies to
commercial leases)

Construction & Operations Plan (COP) – describes all
activities and facilities to be installed and used to gather,
transport, transmit, generate, or distribute energy from the
lease (applies to commercial leases)

General Activities Plan (GAP) – describes all activities and
operations related to technology testing, siting (applies to
limited leases, ROWs, RUEs)




            The Rule: Inspections

MMS will conduct scheduled and unscheduled inspections

● Verify that activities are conducted as outlined under the lease and
  approved plan
● Determine that proper safety equipment has been installed and is
  operating as provided under the approved plan

Lessee must develop an annual shelf inspection plan
describing type, extent, and frequency of plan inspections




                                                                         20
      The Rule: Decommissioning


Decommissioning plan
approved by MMS

MMS discretion to allow
structures to remain in place
for alternate use or “rigs to
reefs”




           ENVIRONMENTAL STUDIES

AE Environmental Studies Development Plan will guide
MMS’ funding decisions, Leasing, Plan review,
Environmental Assessments and Program decisions.
Proposed, Ongoing, and Completed Studies include:
 ●   Avian Workshops
 ●   Visual Impacts on Historic Properties
 ●   Meteorological and Wave Measurements
 ●   Interactions between Bird Species and Wind Facilities
 ●   Noise Impacts
 ●   Energy Market and Infrastructure Evaluation
For more information on the program, see
http://www.mms.gov/offshore/AlternativeEnergy/Studies.htm




                                                             21
     Technological Assessment &
          Research Studies
Technological Standards and Safety Risk Assessments must
be addressed. Included in program are:
 ●   Comparative Studies to Assess Offshore Wind Turbine Generators
 ●   Inspection Methodologies for Wind Turbine Facilities
 ●   Design Standards to Ensure Structural Safety, Reliability, and
     Survivability of Wind Farms and/or Wave or Current Energy
     Devices
 ●   Accident studies


For more information, see
http://www.mms.gov/tarprojectcategories/AlternativeEnergy.htm




      STATE INITIATIVES:
Offshore Wind Project Developments




                                                                      22
                     Massachusetts


Massachusetts Ocean
Management Act enacted
May 2008
●      Mandates development of a
       comprehensive plan for
       state waters, including
       identification of offshore
       wind development sites, by
       December 2009




                     Massachusetts
Cape Wind
●      130 wind turbines, up to 420 MW, Horseshoe Shoal in Nantucket
       Sound
●      Permitting process for project components in state waters ongoing
●      MMS issued a Draft Environmental Impact Statement (DEIS) and
       received public comment
●      FEIS anticipated by the end of 2008

Hull
●      Mass Technology Collaborative
           $1.7 million in a forgivable pre-development loan provided to Town of
           Hull Municipal Light Plant (HMLP) for preliminary studies for a 4
           turbine wind farm approximately 1.5 miles offshore
●      Hull submitted an Environmental Notification Form (ENF) and
       Secretary issued Scope for a DEIR
●      Technical analysis ongoing




                                                                                   23
                        Texas


Texas General Land Office (GLO) awarded
competitively bid leases for offshore power
● Five active leases being explored for wind generation.
● First open bidding for leases in 2006
● Four leases awarded in 2007 to Wind Energy Systems
  Technology, which already held lease off of Galveston
● Resource Assessment Progressing
● State Waters so not governed by MMS regulations




    Delaware Offshore Wind Grant

June 23, 2008, Bluewater
Wind and Delmarva Power
executed a negotiated PPA
for construction of a 200
MW facility off the coast
of Rehoboth Beach,
Delaware
●   25 year contract
●   11.5 miles off coast
●   Output of up to 600 MW
    expected




                                                           24
            Rhode Island Offshore Wind


State law mandates that the State must get 16 % of its energy from
renewables by 2019

Wind Farm Siting Study – June 2007
 ● State and Federal Areas identified
 ● Entire Rhode Island RPS (15%) to be satisfied

“Special Area Management Plan” funded July 2007 (ongoing)
 ● Leads: R.I. Coastal Resources Management Council (CRMC), Univ. RI, Sea
   Grant
 ● Participants: MMS, ACOE, RI DEP & adjacent States
 ● To address Federal Consistency & State Ocean Zoning for current uses - such
   as commercial fishing; habitat protection for fish, marine animals, and birds;
   and marine transportation --and potential new activities, including renewable
   energy development




                Rhode Island Grant
 RFP issued for company to
  ●    design, build, finance and
       operate a wind generation
       facility in the waters off RI
       coast
  ●    supply at least 15% of the
       energy consumed by RI’s
       electricity customers

 Grant awarded October 2008 to
 Deepwater Wind LLC
  ● 90 day negotiation period
  ● Cost: $1.5 billion
  ● Privately funded
            First Wind Holdings Inc.
            D.E. Shaw & Co., L.P.
            Ospraie Management LLC
            of New York




                                                                                    25
                    New Jersey Grant
Executive Order December 2004
 ● Blue Ribbon Panel on Offshore
   Wind
 ● April 2006 recommendation to seek
   pilot program of up to 350 megawatts

Department of Environmental
Protection (DEP) commissioned 18
month, $4.5 million Ocean/Wind
Power Ecological Baseline Study of
Ocean Resources
 ● Covers waters 20 miles off NJ shore,
   excluding Delaware Bay and other
   specified areas.
 ● Environmental analysis (EA)
   expected to be issued in summer 2009
 ● Construction can begin at that time




                    New Jersey Grant

 Solicitation for Proposals to Develop Offshore Wind
 Renewable Energy issued in October 2007
  ●    $19 million, 5-year production credit for construction and operation
       of an up to 350 MW facility
  ●    10% to be made available up front to support studies and permitting


 September 2008, Board of Public Utilities (BPU) awarded
 grant of $4 million to Garden State Offshore Energy
  ●    Joint venture between PSEG Renewable Generation and Deepwater
       Wind
  ●    Anticipated to install 96 wind turbines 16-20 miles off the coast of
       Atlantic City
  ●    345.6 MW -- over 1% of State annual electricity consumption
  ●    Construction: 2010 at the earliest




                                                                              26
       New Jersey Offshore Wind
            Going Forward
    New Jersey Master Plan (October 2008)
    ● Offshore Wind Planning Group to be established to consider
      environmental and economic impacts and various financing
      models to support development
    ● Encourages 4 companies that lost the bid to work with the
      Governor’s office, the BPU, and the DEP in order to achieve 1000
      MW by 2012


    New Goal:
    ● 20% of state’s power from renewables by 2020
    ● Includes 3,000 MW from offshore wind power
          800,000 homes
          13% of state’s energy needs




               On the Horizon?

On the Horizon?                         For a summary of state initiatives
●    Federal Waters/OCS                 as of September 2008, please see
                                        the Report issued by the U.S.
        Carolinas
                                        Offshore Wind Collaborative
        Georgia
                                         ●    Status of US Offshore Wind
        Maine                                Development Activity by State
        Maryland                             (2008) which can be
        New York                             downloaded at:
        Oregon                               http://offshorewind.net/Othe
                                             r_Pages/Links%20Library/S
        Virginia
                                             ept%202008%20Status%20
●    State Waters                            of%20US%20Offshore%20
        Great Lakes                          Wind%20Development%20
                                             by%20State.pdf




                                                                             27
                           When You Think
                  ALTERNATIVE ENERGY,
                                                            TM
                            Think Fulbright.

HOUSTON • NEW YORK • WASHINGTON, D.C. • AUSTIN • DALLAS • DENVER • LOS ANGELES • MINNEAPOLIS
      SAN ANTONIO • ST. LOUIS • BEIJING • DUBAI • HONG KONG • LONDON • MUNICH • RIYADH

                 www.fulbright.com • 866-FULBRIGHT [866-385-2744]




      Government Actions
   to Promote Offshore Wind
       Energy Production




                                                                                               28
OSW needed to meet state RPS
      450 MW OSW Park = ~1.6 M MWh/Yr
•   VA 12% 2022 (voluntary)                    Elec use:106 M MWh/Yr*
•   MD 20% by 2022                             Elec use: 63 M MWh/Yr
•   DE 20% by 2019                             Elec use: 11 M MWh/Yr
•   NJ 22.5% by 2021                           Elec use: 79 M MWh/Yr
•   NY 24% by 2013                             Elec use: 142 M MWh/Yr
•   RI 16% by 2020                             Elec use: 7 M MWh/Yr
•   MA 15% by 2020                             Elec use: 55 M MWh/Yr
            Database of State Incentives for Renewables and Efficiency; US EIA 2006 usage data.
            *"Elec use" data reflect all electricity used for each state; RPS may be lower.




              Benefits of OSW:
                  ES³ Plus
• Economic Security – Creates jobs and
  manufacturing opportunities
• Environmental Security – Supports efforts
  to fight climate change
• Energy Security – Reduces reliance on
  foreign energy sources
• Consumer Protection – Guarantees stable
  pricing




                                                                                                  29
               Benefits of OSW:
              Emissions avoidance
     Pollution avoided annually from a
        450 MW offshore wind park
                CO2        1.35 billion pounds
                SOx       14.4 million pounds
                NOx        5.17 million pounds

Source: Analysis based on data provided in “Assessment of Delaware Offshore
   Wind Power”, University of Delaware. Dhanju, Whitaker, Burton, Tolman, and
   Jarvis. September 2005.




             The OSW Industry:
            Ready for prime time
• By end of 2009, states/utilities will have:
   – Issued RFPs for as many as ten OSW parks
   – Selected OSW developers to begin fed/state
     permitting process
• By end of 2009, OSW developers will have:
   – Committed to projects valued at over $10B
   – Begun development on siting, ports, vessel
     construction/procurement, and
     identification of turbine suppliers




                                                                                30
   States will play critical role in
       development of OSW
• Provide incentives for U.S. manufacturing
• Job training for OSW technicians
• Adopt policies to support financeable projects
   – PPAs
   – Merchant with carve out for OSW-RECs
• Coordinated permitting with neighboring states
  and federal government
   – Coastal zone consistency
   – MMS final rule




       Federal government has
   critical role: Executive Branch
   •   Publish final MMS Rule
   •   Single NEPA review
   •   Fair lease and operating fees
   •   Permitting
   •   Support additional staff positions
   •   Inter (and intra) agency coordination




                                                   31
     Federal government has
      critical role: Congress
• Enact effective PTC and carbon regulation
• Create informal Congressional OSW caucus
  to support
  – Regulatory refinements
  – Inclusion in stimulus package of OSW
    initiatives; e.g., support for manufacturing
    and port facilities and technology upgrades




                 Thank You
          For more information contact:
                   Jim Lanard
                  201.420.1195
            jim@bluewaterwind.com




                                                   32
      Questions?
 Offshore Wind Power’s
Contribution to 20% Wind
     Energy by 2030




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