More than two years after the Interior Department launched an initiative to speed up and simplify its permitting process, there are still no commercial-scale wind projects up and running in federal waters.
In late 2010, the department began its work, partly to meet the Obama administration’s goal of multiplying renewable-energy projects on public lands and in federal waters and partly to respond to stakeholder complaints that the existing regulatory process created too much red tape.
In a speech Tuesday to the Offshore Wind Power USA Conference, Interior Secretary Ken Salazar touted his department’s progress in approving solar, wind and geothermal projects “and transitioning from planning to commercial leasing for offshore wind.”
The United States was already playing catch-up to European countries such as the United Kingdom and Denmark that have successfully harnessed the wind off their shores since 1991. Offshore wind projects can cost at least double their onshore counterparts, and the federal government lacked a coherent permitting process until President Barack Obama took office.
Energy legislation passed in 2005 and 2007 offered financial backing that some developers thought they could use to start building a domestic industry, and the promise of a national cap-and-trade program made the stronger, more consistent wind several miles off U.S. coastlines more attractive for exploitation.
Interior’s offshore energy agency, the Bureau of Ocean Energy Management, has issued commercial leases for two projects off the coasts of Massachusetts and Delaware, and more facilities are in development near Rhode Island and New Jersey.
But the Cape Wind project in Massachusetts has faced years of delays due to the not-in-my-backyard stance held by some residents and concerns about its impact on the commercial fishing industry.
And Bluewater Wind, the company behind the Delaware proposal, has put those plans on hold while it searches for more investors — a tough job when tax benefits are routinely on the brink of extinction and loan guarantees have become verboten in Washington.
While regulatory streamlining at the executive branch level may remove one obstacle to realizing the industry’s potential, inconsistent tax and grant policies and the need for state government buy-in remain challenges for the resource.
“Congress needs to create a vision of expanding our energy policy to include the development of offshore wind,” said Bob Mitchell, CEO of the Atlantic Wind Connection subsea transmission project.
The tax arguments are not new for a clean-energy resource. Onshore wind proponents lobbied hard for an extension of their prized production tax credit during the fiscal-cliff negotiations at the end of 2012. The agreement included a one-year patch for the investment tax credit — which is more beneficial to offshore wind developers because of their projects’ larger size — in addition to a modification allowing companies to claim the benefits once they begin construction, rather than when they start generating electricity.
May 22, 2013, 7:35 p.m.
May 22, 2013, 7:05 p.m.
May 22, 2013, 1 p.m.