While debate continues over whether Congress should extend the wind production tax credit that expires Dec. 31, the U.S. Department of Energy (DOE) is touting its progress in supporting offshore wind development, noting that it is providing up to $168 million in funding for seven “advanced technology demonstration projects” across the country.
The United States does not currently have any utility-scale wind turbines installed in its waters. A DOE-commissioned analysis projects that in a “high-growth scenario,” the offshore wind industry could support up to 350,000 jobs and stimulate $70 billion in annual investments by 2030 (the DOE seems to be sticking to a more conservative number, citing 200,000 potential jobs on its blog and infographic). But the offshore wind industry has many hurdles to overcome in order to achieve that high growth.
Aside from the potential end of the production tax credit, which would result in a loss of $10 billion in investments to the wind industry as a whole next year, according to a report from the American Wind Energy Association, the offshore wind industry faces other significant challenges. Though offshore wind has the potential to generate 4,000 gigawatts of electricity — four times the current overall U.S. generation capacity — the industry lacks adequate means of integrating that power with the nation’s grid. (See related story: “High-Voltage DC Breakthrough Could Boost Renewables“)
As the DOE notes in its National Offshore Wind Strategy document, the specialized vessels, port capacity, transmission lines and grid configuration necessary for cost-effective offshore wind energy installations does not yet exist in the United States. Projects also face a complex permitting process that must take into account an array of existing activity in U.S. waters: shipping lanes, fisheries, military operations, and wildlife.
One of the concerns for offshore wind development along the East Coast involves the endangered North Atlantic right whale, which routinely migrates up and down the Atlantic off the U.S. coast. Last week, three wind developers announced an agreement with environmental groups designed to mitigate impact on the right whale’s migration, feeding and breeding grounds. The provisions of the voluntary plan include restrictions on development activity, noise levels and ship speeds during certain times of the year, along with increased monitoring for whale presence as companies assess potential turbine sites. (See related story: “Chilean Wind Farm Faces Turbulence Over Whales“)
As the Natural Resources Defense Council notes, the agreement can help reduce delays for the U.S. offshore wind industry, which has a timeline of 7-9 years for approval of a project. “[As] we continue on this faster track, we also need ensure that these projects avoid potential conflict with endangered species that could slow down their forward progress,” writes Kit Kennedy of the NRDC.
The wind industry as a whole is racing to complete projects before the production tax credit expires. According to the Energy Information Administration, if all of the planned wind generation projects come online in 2012 as planned, they will exceed additions of generating capacity from any other fuel source, including natural gas.