September 22nd, 2010
By Dina Fine Maron, E&E reporter, Climate Wire
Offshore wind development needs a jump-start. And the Energy Department thinks it can provide the needed jolt, according to a new draft plan from the agency.
While Europe and China have blazed ahead with such projects, offshore wind projects along the United States have snagged on issues including steep energy costs, technical challenges and permitting hurdles. Concerns about the aesthetics of turbines dotting coastal waters have also posed a formidable obstacle.
But the United States cannot afford to hang back any longer, the Obama administration has said: Tapping the strong winds that whip the oceans offshore could help make a sizable dent in U.S. goals to slash greenhouse gas emissions and create tens of thousands of jobs.
Now a new DOE Offshore Wind Innovation and Demonstration Initiative, slated to launch in fiscal 2011, aims to provide the needed momentum to propel such work forward. DOE’s report outlines a plan to develop three to five partnerships that could serve as the initial research and permitting test cases for offshore wind — paving the way for future projects.
Under the plan, DOE would partner for five years with commercial developers, research consortia, power producers and utilities on several offshore projects.
DOE would expect its potential partners to foot at least half the bill for such projects, but the agency did not specify how much it expects the effort will cost or how it will scrounge up its share.
The end goal: helping install 54 gigawatts of offshore wind energy by 2030, with ratepayers paying 7 to 9 cents per kilowatt-hour, it says, citing earlier agency projections. By 2020, the goal would be 10 gigawatts at 13 cents per kilowatt-hour.
An effort to drive down prices
“By providing funding, technical assistance and government coordination to accelerate deployment of demonstration projects, DOE can help eliminate uncertainty, mitigate risks, and facilitate the use of the first commercial projects as testbeds for R&D,” DOE’s report says.
While estimates for the price tag for power from Cape Wind, the controversial offshore wind project in Massachusetts, are projected to be 18.7 cents per kilowatt-hour, followed by an annual price hike of 3.5 percent, wind industry players said the agency’s 2020 and 2030 goals seem achievable (ClimateWire, Sept. 10).
“I think we have to be pushing the technologies and the policies to get to that outcome,” said Jim Lanard, president of the Offshore Wind Development Coalition. DOE’s “high goals” are realistic, he said.
“Targeted technical research and development, partnerships to remove market barriers and implementation of pioneering demonstration projects” will all be part of the recipe, the report reads.
Overcoming these hurdles is a matter of pooling resources, DOE says. Agencies, universities, nongovernmental organizations, offshore oil and gas players, and European offshore wind industries must come together to create industrywide understanding and identify cost-savings options while developing new technologies.
DOE becomes a bridge to greater capacity
DOE maintains in the report that it is uniquely positioned to assist these projects, since it has no role in the permitting process. Bridging the gaps among the different agencies involved in the permitting process and coordinating research among stakeholders will give these projects a needed boost, DOE says. Plus, the agency has already started down the path, it says: It formally partnered with the Department of the Interior in June to begin ramping up commercial offshore renewable energy projects.
This role makes sense for DOE, said Peter Mandelstam, chairman of the American Wind Energy Association’s offshore group and president of NRG Bluewater Wind. “It reminds me of what the DOE did in the early 1990s with land turbines, where they wanted to increase efficiency and drive down the costs, and they did that,” he said.
Right now, there are several major challenges with offshore wind, according to Lanard. The cost of purchasing both the turbines and the specialized vessels and infrastructure to install them, and crafting a more efficient transmission system to bring that power back to the grid, is part of the problem, he said. DOE can help spur fixes through supporting this initial research and development, said Lanard.
Another main issue for the offshore wind industry is achieving needed economies of scale to get investors interested. “We need more projects in the queue in order to get more manufacturers to commit to building facilities along the East Coast, and we get there by having efficient regulatory practices and programs and economic opportunities to put people to work,” he said.
“What you’re looking at with Cape Wind and these initial projects is the fact that these first-round developers have to fund all of the infrastructure that is necessary for their work,” Lanard said. “It’s hard to compare what we’re starting with and what we may get to in 20 years. We have to start — [otherwise] it would be just as if we said, ‘Well, let’s wait for that really fast computer, and let’s not build the first six generations.’”