Fed Official Still Optimistic about Offshore Wind

Wind turbines off the Danish coast.

Wind turbines off the Danish coast.

by James A. Bacon

As the cost of offshore wind energy in Europe continues to decline, Abigail Ross Hopper, director of the federal Bureau of Ocean Energy Management, believes that offshore wind will come to the United States eventually.

Responding to a question by Dave Mayfield with the Virginian-Pilot what prospect she sees for ocean wind energy by 2050, she said:

I think there will be turbines running up and down the coast, the Eat Coast and the West Coast, and I don’t think it will be a big deal. Just like I’m looking out the window right now and there’s power lines along the side of the road that I ordinarily don’t see because I’m used to them.

Recently, the Dutch government auctioned rights for two large wind farms in the North Sea. The winning bid came in at the equivalent of about $95 per megawatt hour generated — $40 per megawatt hour below the previous low set by a Danish project just last year. That’s still higher than the cost of other energy sources, but the trend-line is moving in a positive direction.

The U.S. has a lot of catching up to do, Mayfield notes. Compared to the 500 wind turbines off the coast of tiny Denmark, there are five turbines off the East Coast of the U.S. — off Block Island, R.I.

Bacon’s bottom line: Europe is driving down costs now because national governments used massive subsidies to build a large and competitive wind industry, with all the supporting infrastructure and expertise required to install wind turbines in the open sea. That scale and expertise does not exist in the U.S. yet, and given the fact that offshore energy policy is driven mainly by uncoordinated state initiatives, there is no sign that it will develop any time soon.

If all East Coast states could coordinate their policies, they conceivably could generate a critical mass sufficient to entice European major players to set up shop in the U.S. For whatever reason, no one has undertaken the task of getting all the states working together.

Here in Virginia, Dominion Virginia Power investigated the cost of building two experimental turbines off the Virginia Beach Coast. That project would have tested, among other things, innovations designed to help the turbines stand up to hurricane-force winds, thus laying the groundwork for the large-scale deployment of offshore wind power. But the cost of the two experimental turbines was so high that the power company did not think it could get State Corporation Commission approval to build. Progress has stalled since the feds pulled a $40 million research grant.

Virginia has the most to gain of any U.S. state from building a vital offshore wind energy industry because Hampton Roads, centrally located along the East Coast and home to a large ship repair industry, is the most logical location for companies to operate. But the McAuliffe administration has done little — at least nothing visible — to build the interstate cooperation needed to achieve European-style economies of scale. Perhaps that’s because the McAuliffe team has chosen to focus on solar energy, for which the economics are considerably more favorable and the development lead times are much shorter. Given the string of recent solar project announcement, the administration arguably made the right decision.

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8 responses to “Fed Official Still Optimistic about Offshore Wind

  1. Jim – what’s the difference between the US “investing” in R&D for new technologies and “subsidizing” it?

    do you characterize the money the Govt gives to Universities for research and the actual work the govt does like Darpa and Navy Labs as “subsidies”?

  2. LarytheG,
    Yep, the joke is that the U.S. nuclear industry isn’t heavily “subsidized.”

    Or, that the U.S. coal industry doesn’t get zillions of secondary subsidies such as cheap severance tax rates and getting to use their balance sheets instead of having to put cash in escrow to make sure they actually clean up mountaintop removal.
    .

    But if it’s renewable, it naturally “subsidized.

    Now who subsidizes Bacons Rebellion again? Oops, forgive me, it’s a “sponsorship.”

    • Conservatives do have a myopic view of subsidies. First, they tell you how much they believe in private land ownership and property rights. Then, they tell you that one of government’s legitimate roles is the protection of property rights. But when a 550 page energy bill come up in Congress in 2005 they insert a paragraph that protects fracking companies from being sued for polluting groundwater. Now, isn’t the groundwater under my house one of my property rights? And if some company wreaks my property by polluting my groundwater, doesn’t the government have a legitimate role in making the offending company pay restitution for their misdeed (even if unintentional)? Not according to the Republicans in Congress …

      http://www.eenews.net/stories/1060023558

  3. Of course just a few short years ago – DARPA (that’s one of those evil and profligate govt agencies…) did this:

    https://en.wikipedia.org/wiki/DARPA_Grand_Challenge

    and GAWD FORBID – DARPA or the govt might do something like that with Offshore Wind – Oh the HORROR!!!!

    and UBER – lord their sorry butts would be nowhere if it were not for that good old fashioned govt subsidized GPS satellites!

    or drones… geeze…

  4. Right now I’d say Massachusetts and maybe NC are in the lead. Don’t have time to look up references, but I believe Mass. recently “committed” to a major offshore wind development. Presumably MA and NC have some natural advantages of stronger winds, and MA perhaps less hurricane potential. My guess is those states might have better Fed/state gov’t support as far as being the lead locations to get started on this, if in fact it is going to happen at all.

  5. Certainly development lead times are considerably shorter for solar than Offshore Wind, but maybe there are other reasons that the Governor choose to avoid the issues of building offshore wind … like the support for offshore drilling in those same coastal waters by the majority of our pols. Given the risks to Virginia’s coast from rising seas, storm surges and sinking lands, I find a willingness to subject our coast to more risk hard to understand.

    In 2012 I testified at a Virginia BOEM hearing, excerpted here in quotes

    “One year ago at a BOEM hearing in Virginia I testified against a proposal to lease a large section of the Virginia coast for oil and gas drilling. I stated then that offshore wind power offered a higher and better use for the unique geology of the Atlantic Bight …”

    “In my previously testimony I made three primary points. Those points remain valid and are actually more compelling one year later. First, we would be remiss not to use the uniquely suited geology of the Atlantic coast’s continental shelf for wind power. Shallow, wide and relatively far from shore, wind power on the Atlantic Bight is certainly a ‘best use’. Coupled with the proposed underwater ‘spine’ to connect and transmit the ocean wind’s power output to nearby, large population centers, Bight wind can produce a substantial portion of the electricity needs of eastern seaboard.”

    “The idea of the transmission spine, first put forth by Markian Melnyk in his book “Offshore Power”, and now proposed by the Atlantic Wind Connection, optimizes that ‘best use’ and puts to rest many of the old myths about wind power still heard among so called energy experts. The spine will join the farms, regularizing their output and connecting to the grid at a limited number of transfer points reducing intermittancy.”

    And now we can add the synergy of solar and offshore wind to meet peak, expensive, demand.

    “The second point I made a year ago was that our energy future requires major investment dollars … no matter what. Seventy percent of our coal plants and all of our nuclear facilities are more than 30 years old. Thirty percent of our coal plants are more than 40 years old. Retrofitting and/or replacing their output will cost $70+Billion over the next 10 years regardless of any new EPA pollution rules. (NYT11/30)… Where will those required investment dollars go, and Investors are asking … what is the real cost of our electricity today?”

    Cost comparisons need to be based on real numbers, not today’s utility KWhr charge. They need to include some value for the long-time tax preferences and offloaded environmental/health costs. Without a carbon tax, they are not part of the cost for w/hr we pay for all fossil fuels.

    Dominion outbid 7 other companies for those offshore leases, yet have no plans to move ahead. I ask again. … Is Dominion’s proposal merely a “layaway plan”?

    “Finally, the third argument; developing offshore wind can be a major factor in revitalizing our manufacturing sector. In addition to building the very large offshore turbines that need to be produced close to their future home, there are 8,000 parts to a windmill.
    In North Carolina the federal government estimates that building enough wind turbines for the NC coast to replace 10 nuclear plants would create 50,000 local jobs and provide $22Billion in local economic benefits over the next 20 years.”

    This kind of business development is happening today in Cleveland where the monies for pilot projects went when Dominion turned down moving ahead. The strength of the Lake Erie Icebreaker project … lies in LEEDCo’s commitment to leverage offshore wind energy with local Ohio-based jobs in the steel, construction and transportation industries,’ Ohio Congresswoman Marcy Kaptur said. Fifteen local companies are involved and the project plans to add fabrication and construction.

    “According to the September 2010 NREL analysis, ”offshore wind would create approximately 20.7 direct jobs per annual megawatt in the United States. If 54 GW were installed in the U.S, more than 43,000 permanent operations and maintenance (O&M) jobs would be created, while more than 1.1 million job-years would be required to manufacture and install the turbines (NREL White Paper). Many of these jobs would be located in economically depressed ports and shipyards, which could be revitalized as fabrication and staging areas for the manufacture, installation, and maintenance of offshore wind turbines”.

    Compare those figures to the idea that the ACP is supposed to give us a leg up for possible new business, even when a majority of Fortune 500 companies are looking for the ability to produce renewable energy on-site, or buy it from a 3rd party with a long-term contract, assuring future utility bills remain low.”

    Finally, you are right … the nature of our ‘staggering” wind potential demands a coordinated effort. The Department of Energy has estimated that achieving 20% of our national energy from wind energy by 2030 will require 54 gigawatts of offshore wind, so in 2010 the Department of the Interior (DOI) and 10 East Coast states established the Atlantic Offshore Wind Energy Consortium to simplify, not toss out, the rules. Unfortunately that Memorandum of Understanding expired in 2014.

    Working together under the “Smart from the Start” initiative, the governments ‘conducted a thorough analysis, ensuring future projects are sited where the wind energy potential is significant.’ Environmental assessments were made and NOAA updated old wind maps for the region, to be used for optimum siting. To date, BOEM has awarded 11 commercial offshore wind leases, including nine through the competitive lease sale process (two offshore New Jersey, two in an area offshore Rhode Island-Massachusetts, another two offshore Massachusetts, two offshore Maryland and one offshore Virginia). The first is about to produce energy and more are on the way. NY’s initiative looks promising, and NC will have leases this fall.

    Given that Offshore Wind is central generation, Dominion should give it another look instead of going all in for natural gas, a resource that may create more problems as world prices drop, and fracking comes under the clean air and clean water regulation that the drillers were exempted from years ago. The economic development that could be created with offshore wind is also worth another look by the Legislature.

    … and maybe, now that 190 countries are taking steps to forestall Climate Change, Virginia can step up. Projections by the Virginia Institute of Marine Science say the state’s coastal waters could rise as much as two feet by 2050 and up to six feet by the end the century. Virtually all of the land where Pocahontas and Captain John Smith once walked is now less than five feet above water. To make matters worse, the land is sinking, partly because of groundwater extraction. Certainly we can generate energy without adding to the risks of Climate Change and stop investing billions in new fossil infrastructure.

  6. As far as why less support from VA gov (you mentioned solar focus) but also I’d say also we are a nuclear state and wind power tends to make nuke plants less viable economically.

    The way I look at it, there are less costly options: Nat Gas, on-shore wind, add now utility scale solar. Then we have the more costly options: new nuke plants, off-shore wind, clean coal (per the new Mississippi gasification plant starting-up now). Sort of a major political decision at the state level, as far as which and how many super expensive options will get the nod.

    • I’m not in disagreement with Tbill’s logic but would like to hear responses that do disagree…

      I do think if you look on the east side of the eastern shore – you’ll see it’s not prime scenic ocean-front.. and probably is a good spot to put turbines…

      and just an aside – I do not find the turbines adverse to scenery.. I see them like I do bridges.. which are a normal part of the landscape and can even complement it.

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