September 29, 2015
Nothing Will Take the Wind out of This Industry’s Sails
This week, Oceana and other stakeholders are gathering in Baltimore, MD for the American Wind Energy Association conference on offshore wind power. This event connects the latest in offshore wind energy policy, education, and business, and features keynote speaker Abby Hopper, BOEM Director. The meeting provides an opportunity to examine offshore wind’s promise, as well as barriers to its widespread success.
Between 2007 and 2014, U.S. onshore wind capacity nearly quadrupled, while it took only half that time for the cost of generating wind electricity to fall by more than 40 percent. 2014 saw the installation of 2,500 wind turbines with a combined new wind capacity of 4,854 megawatts (MW). These projects brought the national total of operational wind capacity to 65,877 MW at the end of 2014. This is pretty impressive given that a single onshore 1 MW wind turbine can provide electricity to 225-300 homes, while a single offshore 1 MW wind turbine can power more than 400. In other words, in 2014 the U.S. generated enough electricity through wind energy to power 16.7 million American homes.
The offshore wind industry, while still in its infancy, has also seen historical advances. History was made on July 27, 2015 when Deepwater Wind officially put the first steel in the water for its Block Island Wind Farm. This farm, the first commercial-scale offshore wind installation in the United States, is located three miles off the coast of Rhode Island and scheduled to come online in 2016. The farm will consist of five turbines with a capacity of 30 MW. These turbines will produce most of Block Island’s power while also creating 330 local jobs. The Block Island Wind Farm demonstrates how other states can leverage clean energy mandates and stakeholder involvement to identify offshore projects that combine high quality wind with minimal usage by existing communities (e.g. fisheries, defense).
In North Carolina, the Bureau of Ocean Energy Management (BOEM) has advanced three pre-designated Wind Energy Areas (WEAs) towards the leasing process. After completion of environmental analysis required by the National Environmental Protection Act (NEPA), BOEM produced a Finding of ‘No Significant Impact’ for potential offshore wind developments. Offshore wind may also prove uniquely valuable to Atlantic states in their efforts to comply with the targets set recently by the Environmental Protection Agency in the Clean Power Plan, which is designed to reduce carbon pollution from power plants.
Oceana is deeply interested in the economic and environmental benefits offered by offshore wind. In January 2015, Oceana released a report entitled Offshore Energy by the Numbers. This analysis found that offshore wind trumps offshore drilling in terms of job creation, energy production, and environmental protection. These findings indicate that offshore wind is an efficient energy choice and a worthy competitor for more traditional – and harmful – energy sources.
However, the continuing development and health of offshore wind is threatened by the impending expiration of the Production (PTC) and Investment Tax Credits (ITC). The PTC provides a 2.3-cent per kilowatt-hour incentive for the first ten years that a renewable energy facility is in operation. The ITC gives a credit of 30% on the cost of the property where a wind facility is installed. Since its inclusion in the Energy Policy Act of 1992, Congress has extended the PTC and allowed it to expire on six occasions, leading to a stop-and-go cycle of development in the wind industry. Uncertainty regarding the longevity of the tax credits has seriously impacted the growth and productivity of the wind industry by slowing – or even completely disincentivizing – the planning and construction of wind projects and causing layoffs. Although the Senate Finance Committee included a two-year extension of the PTC and ITC in its tax extenders package this summer, the House Ways and Means Committee and some Senate Republicans oppose these extensions. Congress’ failure to extend these credits will gravely affect the wind industry and the communities that rely upon it for employment, energy, and tax revenues.
You can learn more about offshore wind in Oceana’s reports and web resources on offshore wind here.
