Federal Agency Eases Waiting Time for Offshore Wind Projects

Tom Johnson | February 3, 2012 | Energy & Environment
No downsides to leasing and site assessments could put permits in place by year's end

The prospect of wind turbines spinning off the Jersey Coast grew more likely yesterday, when the U.S. Department of Interior cleared the way for leasing activities for offshore wind farms by the end of the year.

In finding that leasing and site assessment activities at potential offshore wind farm sites posed no significant environmental impact, the Bureau of Ocean Management probably shaved as much as two years off the time it would take developers to navigate the permitting process, according to offshore wind advocates.

The announcement, made in Baltimore, could prove especially critical for New Jersey, which hopes to become the center of an offshore wind farm industry, with 11 developers expressing an interest in leasing blocks of tracts off the coast of the state.

The competition to obtain leases off the Jersey coast is likely to be intense, given the fact that the state has adopted the most progressive policies to usher in the new technology, including a program to pay offshore wind farms for the electricity they produce from ratepayers’ subsidies over two decades.

New Jersey also benefits from geography. While wind resources are not as plentiful as in northern New England, the relative flat, sandy bottoms off the coast make it easier to install wind turbines than along the northern rocky coast, clean energy advocates said.

Some offshore wind developers welcomed the action by the federal agency.

“For New Jersey, there is nothing holding them back from moving ahead with the auction process,” said Erich Stephens, a vice president of Offshore WindMW, one of the developers seeking to build a huge wind farm off the Jersey coast.

Still, the action left some offshore wind developers privately fuming, primarily because the agency’s finding of no significant impact did not apply to all of the eastern seaboard; essentially, all projects north of Long Beach Island will have to do environmental impact studies, a step that would stretch out the permitting process and make projects economically unfeasible.

Some offshore wind advocates believe that limiting the areas that would require no further review could hamper the ability to develop a large-scale offshore wind industry, which could attract manufacturing jobs and offset the higher costs of the renewable energy.

The agency’s environmental assessment primarily focused on previously targeted Wind Energy Areas off the coasts of Maryland, Virginia, Delaware, and New Jersey.

“For us, where we want to see wind farms developed — from Cape May to Harvey Cedars — this is a major step forward,” said Jeff Tittel, director of the New Jersey Sierra Club.

Others agreed. “There is a tremendous potential for producing clean, pollution-free wind energy off New Jersey’s coast,” said Matt Elliott, clean energy advocate for Environment New Jersey. “We are thrilled that the Obama administration has announced another critical step in making this vision a reality.”

Not everyone is as enthusiastic. They worry about the price tag associated with developing offshore wind farms—projected to be as much as $5 billion by some—and the impact it will have on the states’ already steep electric bills.

Under an offshore wind law approved a few of years ago, developers would name the price they would receive for the power their wind turbines produced. It would be up to the state Board of Public Utilities to decide whether the cost is justified, when weighed against other factors, such as generating cleaner power, creating green jobs in the state, and increasing the reliability of the power grid. That task has grown even more formidable given the steep drop in natural gas prices, the fuel used to produce much of the electricity in New Jersey.

Developers also are waiting on the state to enact rules governing the financing mechanism that would allow wind farms to earn offshore renewable energy credits for the electricity they generate. They had hoped to see the rules in place by last year, but the BPU has yet to propose them, a source of frustration for many in the industry.

BPU officials say they expect to propose the rules “soon.”

In New Jersey, the Interior Department already has solicited interest from developers in building offshore wind farms. The proposed leasing area encompasses 418 square nautical miles between Barnegat Light and Avalon. The leasing area begins seven nautical miles off the shoreline and extends up to 23 nautical miles into the ocean.