With the aim of expediting development of offshore wind farms, the federal government yesterday designated 417 miles of coastal waters in New Jersey as Wind Energy Areas, a move that should tighten the timeframe for approval of projects.
The announcement by the U.S. Energy Department and Interior Department also includes setting aside $50.5 million in funding to support the deployment offshore wind farms, a top priority of the Obama administration. It has set a goal of having 80 percent of the nation’s electricity be generated from clean energy sources by 2035.
The proposal is important to New Jersey, where four developers are vying to build huge offshore wind farms, costing more than $1 billion each and able to generate up to 350 megawatts of electricity. In another development that could speed up that effort, the Christie administration is expected to unveil its proposed rules governing the awarding of offshore renewable energy certificates (ORECs) at a meeting Thursday of the New Jersey Board of Public Utilities (BPU).
The eagerly awaited rules will spell out the details of how offshore wind developers can earn the credits, which are modeled after similar certificates earned by owners of solar energy systems.
With the rules in place, it will be easier for the developers to line up financing for their projects. The offshore farms will generate certificates for the electricity their systems produce, allowing them to convince Wall Street the venture will be profitable. The state hopes to develop 3,000 megawatts of offshore wind capacity by 2020.
The coordinated plan released yesterday by the two federal agencies tries to address three key challenges facing the sector: the relatively high cost of offshore wind energy; technical challenges regarding installation, operation and connection with the power grid; and the lack of site data in the permitting process.
By designating New Jersey and three other locations as Wind Energy Areas, the agencies hope to remedy what has been a big hurdle for offshore wind developers -- a permitting process that could take up to seven years to navigate. Besides New Jersey, areas on the Outer Continental Shelf in Delaware, Maryland and Virginia were given the designation.
Based on stakeholder and public participation, the Interior Department’s Bureau of Ocean Energy Management, Regulation and Enforcement will prepare regional environmental assessments for Wind Energy Areas. These will evaluate the effects of leasing and site activities in designated areas. If no significant effects are identified, the office could offer leases in these Mid-Atlantic areas as early as the end of 2011 or early 2012.
"It could shave up to one-and-a-half to two years off the permitting process," said Jim Lanard, president of the Offshore Wind Development Coalition, a Washington D.C.-based trade organization. "That’s why it is so important."
Others agreed. "Any initiative that strives to and actually achieves reductions in permitting timeline and relative cost of offshore wind is welcomed by the industry," said Scott Jennings, president of PSEG Global L.L.C., a partner in Garden State Offshore Energy, a 350-megawatt project off the New Jersey coast.
Jeff Tittel, executive director of the New Jersey chapter of the Sierra Club, also praised the announcement. "This is an important decision in order to make offshore wind a reality in New Jersey. Secretary of Interior Salazar’s decision to fast track permitting off the coast of Atlantic City will bring New Jersey one step closer to having windmills off our coast. This will ensure clean renewable energy and provide green jobs. Before now it was easier for oil rigs to be built off our coast then windmills. This is a real victory for offshore wind," he said.