The Department of Energy (DOE) has announced new funding opportunities for offshore wind energy projects. The DOE has not yet confirmed the amount of new funding that will be made available, but early indications from officials suggest grants could total between $100 million to $175 million. The DOE awards are expected to cover roughly half of a selected offshore project’s total costs.
According to a draft funding announcement available on the DOE’s website, the focus of this assistance is to support advanced technology demonstration projects that test new technology and verify performance and cost under actual operating and market conditions. The announcement indicates that one of the primary goals of providing financial assistance to advanced technology demonstration projects is to expedite development of offshore wind farms with the potential for bringing the cost of energy down to a point where these sources can compete with other generation technologies on an unsubsidized basis.
The announcement includes a potential roadmap to cost competiveness for offshore wind projects. The roadmap highlights development of innovative turbine architectures and advanced infrastructure to cut costs and increase efficiency. The DOE’s roadmap assumes that validation of construction, generation and operating expenses will be key drivers to reducing financing costs.
The DOE funding announcement is part of a broader effort by the federal government to facilitate offshore wind projects in the U.S. Recently, the U.S. Department of the Interior, Bureau of Ocean Energy Management announced completion of an environmental assessment for wind energy development off the coasts of New Jersey, Delaware, Maryland and Virginia. The assessment — required by the National Environmental Policy Act — identifies areas where offshore wind development would not have a significant impact on wildlife and the environment. Lease solicitation and application processes are underway for areas offshore of these Mid-Atlantic states.
Applications for offshore wind project funding are tentatively due on May 31, 2012. The DOE anticipates that it will select award recipients in August 2012 and make awards available in September 2012.