offshore wind development Archives

offshore wind development

Seeing a $100 Billion Market Opportunity, North Carolina Governor Commits to Developing 2.8 Gigawatts and Eight Gigawatts of Offshore Wind by 2030 and 2040, Respectively, through Executive Order

by Carl J. Fleming, Elle Hayes and Dominique J. Torsiello | Jun 17, 2021 | Environmental, Project Development and Finance, Renewables

Last week, North Carolina Governor Roy Cooper issued Executive Order No. 218 titled, “Advancing North Carolina’s Economic and Clean Energy Future with Offshore Wind,” announcing a goal of developing 2.8 gigawatts of offshore wind energy resources by 2030 and eight gigawatts by 2040. This executive order comes after the North Carolina Department of Commerce issued a report in March that found offshore wind energy development along the Atlantic is a more than $100 billion market opportunity through 2035.

Within the order, Cooper recognizes the favorable economic impact offshore wind development will create for North Carolina, including an estimated 85,000 new jobs and $140 billion in capital expenditure along the Atlantic Coast by 2035. “This coordinated approach to developing our offshore wind supply chain will bring new jobs to North Carolina for generations to come,” North Carolina Secretary of Commerce Machelle Baker Sanders said. “From building out the supply chain, to installing equipment, to operating the wind facilities, North Carolina’s manufacturers and workforce are well positioned to play an integral role in the entire East Coast market, not just for projects directly off the state’s coast.”

In addition to the economic benefits the offshore wind development will bring to North Carolina, this executive order will further assist the state in achieving the North Carolina Clean Energy Plan’s goal of a 70% reduction in power sector greenhouse gas emissions by 2030 and carbon neutrality by 2050. “The coordinated effort of state and federal partners on this issue is an important step forward in our transition to a clean energy economy in North Carolina and key to meeting the goals of the state’s Clean Energy Plan,” North Carolina Clean Energy Director Dionne Delli-Gatti said.

North Carolina’s commitment to create 2.8 gigawatts of offshore wind capacity by 2030 and eight gigawatts by 2040 is one of the largest targets to date, exceeding Virginia’s goal of installing 5.2 gigawatts of offshore wind power by 2034 and New Jersey’s goal of 7.5 gigawatts by 2035, Michelle Allen, project manager for the North Carolina political affairs team at the Environmental Defense Fund, said. Although North Carolina’s target is one of the biggest to date, the target of 2.8 gigawatts would almost be completely fulfilled should North Carolina’s current offshore wind project, Kitty Hawk Offshore, be built to its full capacity of up to 2.5 gigawatts. If North Carolina reaches its target, the energy generated will power roughly 2.3 million homes by 2040.

As a result of the executive order, Sanders must appoint a clean energy economic development coordinator and create the North Carolina Taskforce for Offshore Wind Economic Research Strategies. The order further requires the state’s Department of Environmental Quality and Department of Military and Veterans Affairs (NCDMVA) to elect offshore wind coordinators and take steps to support offshore wind development.

Nine Governors Issue Letter to President Biden Urging Continued Prioritization of Offshore Wind Development

by Carl J. Fleming, Elle Hayes and Dominique J. Torsiello | Jun 16, 2021 | Environmental, Project Development and Finance, Renewables, U.S. Congress

On June 4, 2021, days before the Biden Administration announced its intent to consider further expansion of offshore wind development in the Gulf of Mexico, nine governors issued a joint letter to US President Joe Biden’s administration to commend its commitment to offshore wind development and provide recommendations to build upon the momentum to prioritize offshore wind development in the United States.

Signed by the governors of Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Virginia, the letter urges the Biden Administration to continue to prioritize offshore wind development while also focusing on the development of a long-term relationship and plan between the federal and state governments to advance the offshore wind industry. According to the governors’ joint letter, doing so will create thousands of jobs and cause significant investments to be made in aging ports and the accompanying US supply chain that will build, operate and maintain the new infrastructure.

The governors further noted that the expansion of the offshore wind industry “creates an unprecedented opportunity for the United States to capture significant economic development activity and build equity in coastal communities while improving air quality and increasing the option for energy diversity.” However, the governors also recognized in their joint letter that realization of this opportunity will depend on several variables, including “the pace and uniformity of the federal permitting process, the degree of regional coordination among states, the amount of available space in federal lease areas, the potential impacts on marine resources, and the availability of supporting infrastructure to deliver high-voltage power from project areas to the mainland.”

Notwithstanding, the governors aim to collaborate across their respective states to consult with one another regarding any permitting challenges, natural resource consideration, opportunities to coordinate schedules and to align construction timelines so that states’ respective clean energy targets may be met. Additionally, the governors provided the following strategies to support offshore wind development:

Set long-term targets for the Bureau of Ocean Energy Management’s lease area scoping and establishment that are informed by state clean energy goals
Supplement interstate coordination during project design and permitting processes
Consider setting long-term targets for offshore wind ports that can support the scale and timeline of state procurement targets
Ensure adequate transmission capacity
Provide support for other marine industries and users

DOI Announces Competitive Lease Sale for Offshore Wind Development off the Coasts of New York and New Jersey

by Carl J. Fleming, Elle Hayes and Dominique J. Torsiello | Jun 16, 2021 | Environmental, Project Development and Finance, Renewables, U.S. Congress

The US Department of the Interior (DOI) announced plans to expand offshore wind development off the coasts of New York and New Jersey by proposing a lease sale it strives to complete by the end of this year. More specifically, the Biden Administration proposed a competitive sale of eight lease sites for over 627,000 acres of federal waters on the Outer Continental Shelf in the New York Bight. This proposed lease sale will support the administration’s goal of installing 30 gigawatts of offshore wind energy by 2030.

The proposed leases contain notable stipulations, including the encouragement of project-labor agreements during construction and the requirement of increased engagement with the fishing industry and other affected ocean users during the leasing process. “The development of renewable energy is an important piece of addressing climate change,” US Secretary of the Interior Deb Haaland said in the DOI’s statement, adding, the “new proposed lease stipulations puts a priority on creating and sustaining good-paying union jobs as we build a clean energy economy.”

The lease sites have the potential to generate an additional seven gigawatts of offshore wind energy, powering more than 2.6 million homes and creating thousands of new jobs. “A lease sale not only opens a door to investment in New York and New Jersey, but will support jobs and businesses throughout the U.S.,” National Ocean Industries Association President Erik Milito said. “Providing new offshore wind opportunities will boost critical investments into the supply chain, ports, and workers, and will provide a foundation for exceptional offshore wind growth.”

Despite the stipulations within the proposed leases, the DOI’s Bureau of Ocean Energy Management (BOEM) claimed that 11 offshore wind developers have already expressed interest in the leases. Should the lease sale occur, it would be the first competitive offshore wind lease sale for the administration. A Proposed Sale Notice has been issued in the Federal Register, which opens a 60-day public comment period and provides further information about the potential lease areas, proposed lease provisions and conditions, as well as auction details.

The lease sale announcement builds upon the Biden Administration’s commitment to advance offshore wind development, which includes approval of the Vineyard Wind project—the first large-scale project in federal waters—and the recent announcement to assess potential renewable energy opportunities in the Gulf of Mexico.

Biden Administration Explores Offshore Wind Development in the Gulf of Mexico

by Carl J. Fleming, Christopher Gladbach, Elle Hayes and Dominique J. Torsiello | Jun 9, 2021 | Project Development and Finance, Renewables, U.S. Congress

Earlier this week, the Biden Administration announced its intent to consider further expansion of offshore wind development in the Gulf of Mexico. This announcement comes two weeks after the Biden Administration announced an agreement to lease almost 400 miles off California’s northern and central coasts for wind development. Potential offshore wind leasing in the Gulf of Mexico may play an integral role in the administration’s goal of installing 30 gigawatts of offshore wind by 2030.

To continue its exploration into offshore wind development in the Gulf of Mexico, the US Department of the Interior’s Bureau of Ocean Energy Management (BOEM) will publish a Request for Interest (RFI) in the Federal Register on June 11 to evaluate development interest, potential environmental consequences and other possible uses of the proposed area. Interior Secretary Deb Haaland acknowledged that, “Offshore wind development has the potential to create tens of thousands of good-paying, union jobs across the nation. This is an important first step to see what role the Gulf may play in this exciting frontier.”

The RFI will focus specifically on the Gulf of Mexico’s Western and Central Planning Areas offshore to Louisiana, Texas, Mississippi and Alabama. Although the emphasis is on wind energy, BOEM is also seeking information on other renewable energy technologies, according to the Interior Department. Publishing the RFI will open a 45-day comment period, after which the agency will review comments and data received to determine the next steps in the renewable energy leasing process in the Gulf.

“The Gulf of Mexico has decades of offshore energy development expertise,” Mike Celata, regional director of BOEM’s Gulf of Mexico office in New Orleans, said. “Working directly with our partners in the Gulf, we will make sure that offshore renewable energy development proceeds in an orderly, safe, and environmentally responsible manner.”

Developing offshore wind projects in the Gulf may prove more difficult than projects on the east coast (or even deepwater projects in California) for a few reasons. First, other than the Electric Reliability Council of Texas (ERCOT), wholesale power markets are generally not developed in the region. Second, the wind resource (with some exceptions) is not as strong as the wind resource on the east coast. Finally, it is unclear whether states will provide the necessary incentive programs (in the form of offshore wind renewable energy certificate (OREC) programs or otherwise) to support development. There are a few mitigating counterfactors however, including the historic presence of major oil developers in the region that are collectively looking to “go green,” vocalized support from leadership—including the Governor of Louisiana—the declining price of offshore wind technology and the recently expanded offshore investment tax credit (ITC).

Currently, BOEM has leased approximately 1.7 million acres in the Gulf of Mexico’s Outer Continental Shelf for offshore wind development and has 17 commercial leases on the Atlantic— from Cape Cod to Cape Hatteras. After the comment period concludes on the RFI, information on offshore wind development in the Gulf is expected to [...]

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Biden Administration Advances California Offshore Wind Development

by Carl J. Fleming, Christopher Gladbach and Elle Hayes | May 26, 2021 | Featured, Project Development and Finance, Renewables, U.S. Congress

On May 25, 2021, the Biden Administration announced an agreement to lease almost 400 miles off California’s northern and central coasts for offshore wind development. The announcement expands on the recent approval of the first major offshore wind project in US waters. In an effort to decarbonize US power generation, the administration noted, “These initial areas for offshore wind development in the Pacific Ocean could bring up to 4.6 gigawatts of clean energy to the grid, enough to power 1.6 million American homes.”

Furthering the Biden Administration’s “whole-of-government approach” to clean energy, the US Department of Interior in connection with the US Department of Defense identified an area northwest of Morro Bay that will support three gigawatts of offshore wind. The Humboldt Call Area is also being considered as a potential offshore wind location, which would bring 4.6 gigawatts of energy to California. The Department of Defense played a significant role in identifying areas for offshore wind development, as they take part in significant training and operations off the coast of California that are essential to national security. Both the Department of Defense and Department of Interior plan to work closely together to ensure protection of military operations while pursuing new domestic clean energy resources.

To support this development in the deep Pacific Coast waters, new floating offshore wind technology will be deployed. The US Department of Energy (DOE) has invested more than $100 million in researching, developing and demonstrating floating offshore wind technology. Floating turbine technology will likely be a prime candidate for DOE Loan Programs Office support because it is (1) large enough in scale, (2) has a long lead time to develop and (3) is not commercially scalable in the same way as offshore technology that utilizes bottom anchoring. Lenders will have questions about the technology and having that guaranty could significantly aid project financing.

Ahead of yesterday’s announcement, California invested millions into its budget for environmental needs, including funding port upgrades and power lines that will carry electricity to California homes. We expect further developments in California from a legislative perspective to further offshore development.