U.S. Offshore Wind Sector Sees Major Developments

Key developments for U.S. offshore wind this week could give that sector a much-needed boost: On Monday, NRG Energy acquired offshore wind developer Bluewater Wind, and on Tuesday, the governors of Maryland, Virginia, and Delaware formed a tri-state partnership for the deployment of offshore wind energy in the Mid-Atlantic coastal region.

NRG Energy said it had acquired Bluewater from Babcock & Brown and Arcadia Windpower with cash on hand, for an undisclosed sum. This acquisition would combine Bluewater’s project pipeline of offshore wind parks in the northeast—one of NRG’s core regions—with NRG’s development, engineering, procurement and construction teams, the Princeton, N.J., company said in a statement.

“As public policy trends toward ever-increasing renewable portfolio standards at the state and federal levels, each region of the country will seek to comply with projects that tap the best renewable resource from within that region,” said NRG President and CEO David Crane. “There is no doubt that offshore wind is the highest potential renewable resource proximate to the population centers along the eastern seaboard of the United States.”

Crane added that the acquisition of an offshore wind developer with “good projects” already in the development pipeline would give NRG an advantage in a potentially lucrative market. Bluewater is working on seven offshore projects in the Northeast, including projects in Delaware and New Jersey, which are in advanced stages of development. Bluewater also has a 25-year, 200-MW power purchase agreement, starting in 2012, with Delmarva Power & Light Company that has been approved by the Delaware Public Service Commission and other state agencies.

In New Jersey, the company is one of three preferred developers awarded a $4 million rebate from the state to build a meteorological tower, which collects wind data, for offshore projects. Bluewater also has proposed several offshore wind projects in other Northeast locations.

The Energy Department has said that the U.S. possesses the potential for 900,000 MW of power generation from its offshore wind resources. In October, the U.S. Offshore Wind Collaborative (USOWC) released its study "U.S. Offshore Wind Energy: A Path Forward" (PDF) to coordinate activities among government agencies, academia, and businesses to develop this potential.

Besides Bluewater’s projects, current efforts to develop offshore wind power in the U.S. include the 486-MW Cape Wind project, proposed for Horseshoe Shoal in Nantucket Sound, about 4.7 miles off the shore of Cape Cod. That project is awaiting a federal permit. In Maryland, the Maryland Energy Administration (MEA) recently began a new initiative to explore the potential for developing the state’s offshore wind resources. In North Carolina, Duke Energy and the University of North Carolina, Chapel Hill, recently announced plans to build up to three demonstration turbines in eastern Pamlico Sound, about 7 to 10 miles from the Outer Banks.

Efforts are also under way to develop offshore wind power in the Great Lakes. Last year, the Land Policy Institute (LPI) at Michigan State University issued an offshore wind power report, finding the potential for nearly 322 GW of power production off the state’s coast. This September, the Michigan Great Lakes Wind Council (GLWC) delivered a report to Governor Jennifer Granholm highlighting 587 square miles of state-owned Great Lakes bottomlands considered "most favorable" for wind energy development, and highlighting legislative and rule changes needed to encourage the development of the offshore resource.

Meanwhile, the Ohio-based Great Lakes Energy Development Task Force has issued a feasibility study for an offshore wind power facility in Lake Erie, near Cleveland. The report found that a pilot project of up to 20 MW, located between 3 and 5 miles from shore, would be feasible and would cost up to $92 million.

In a more recent development, Governor Martin O’Malley of Maryland, Governor Tim Kaine of Virginia, and Governor Jack Markell of Delaware on Tuesday signed a memorandum of understanding (MOU) creating a formal partnership that will build on the region’s significant offshore wind resources.

Through the MOU, the Mid-Atlantic states plan to focus on leveraging resources and information to bring offshore wind energy to the region. “Immediate tasks under the MOU are to identify common transmission strategies for offshore wind energy deployment in the region, discuss ways to encourage sustainable market demand for this renewable resource and work collaboratively in pursuing federal energy policies which help advance offshore wind in the Mid-Atlantic area,” the governors said in a joint press release.

The MOU also calls for examination of ways to coordinate regional supply chain facilities to secure supply, deployment, and operations and maintenance functions to support offshore wind energy facilities. Collaboration on strategies to utilize academic institutions to create standards and opportunities for training and workforce development will also be developed.

Sources: NRG Energy, Bluewater Wind, EERE, USOWC, Michigan State University, Great Lakes Energy Development Task Force, Office of the Governor Jack Markell of Delaware

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