Big Projects, Money at Offshore Wind Conference

By TIM FAULKNER/ecoRI News staff

PROVIDENCE — There may not be many wind turbines in the water — just one, so far, in the United States — but there is certainly an abundance of interest and money going into the idea.

On Oct. 22, the first day of the two-day Offshore Windpower Conference & Exhibition at the Convention Center, some 800 attendees and dozens of energy companies from across the United States and from Scotland, British Columbia, England and China looked for a share of the funds flowing into proposed projects in the Northeast and around the country.

In recent years, the Department of Interior (DOI) has invested $180 million in research and development for offshore wind. During the past six years, the Department of Energy has spent $300 million on offshore wind, including $24 million for an indoor turbine test facility in Charlestown, Mass., and $10 million to the University of Maine for a floating platform wind system.

In addition to the Rhode Island offshore wind projects, federal water off Massachusetts, Virginia, Maryland, New Jersey and Oregon will be auctioned for commercial wind energy development.

The opening of public waters and financial incentives to help build the infrastructure needed for national growth in offshore wind development have sparked renewed interest in the sector, said the event's keynote speaker, DOI director Sally Jewell. There’s no need to apologize for subsidies, she said, as the fossil-fuel sector also gets its share. “I will tell you there isn’t an energy industry in this country that doesn’t continue to get incentives. Even some (sectors) that are well established,” Jewell said.

The nation’s first water-based turbine, at a modest 65 feet high, began sending power to the grid in May. The University of Maine project is a prototype for what's ahead in southern New England: Cape Wind, Deepwater Wind off Block Island, and the Energy Center off Massachusetts and Rhode Island.

To get these and other wind farms spinning, speakers stressed the need for Congress to extend federal tax incentives beyond 2013 and to garner broader public support.

Messaging. Lobbyists are hard at work on Capitol Hill to extend the tax credits, said Tom Kiernan, head of the American Wind Energy Association, the organizer of the conference. It helps that 70 percent of all congressional districts have a wind farm or a wind manufacturing business, he said. “The wind industry is pervasive throughout the country.”

The messaging, Kiernan said, must emphasize that wind energy is good business. Offshore wind helps diversify the broader energy pool, which is dominated by natural gas, he said. Kiernan noted that last February’s snowstorms “clogged” natural gas supplies, causing prices to jump 400 percent to 800 percent. A diversified portfolio keeps long-term prices down and helps meet energy needs when demand is strongest, he said.

“The wind is at our backs but we do have a long way to go,” Kiernan said.

Jewell, who made her third trip to Rhode Island since taking her post six months ago, described the recent government shutdown “as a bit of a rude awakening.” The former CEO of outdoor retailer REI said, “I didn’t expect the government to be shut down. I didn’t expect to be dealing with the kind of dysfunction we are dealing with in Congress right now, which is very, very frustrating.” Lease auctions off Massachusetts, New Jersey and Maryland were delayed until 2014 by the government shutdown.

She advocated for generating electricity in public waters to achieve President Obama’s goal of 10 gigawatts of renewable power by 2015, and 20 gigwatts that by 2020. Since 2009, she said, the country's renewable output has doubled.

She congratulated Deepwater Wind for winning the nation’s first-ever auction for the right to develop offshore wind turbines in federal waters, between Rhode Island and Massachusetts. Deepwater paid $3.8 million to build on 165,000 acres, an area with enough capacity to power a million homes.

Aside from government prerogatives, Jewell said, businesses already see the value of renewable energy and cutting carbon pollution, much as she did at REI. “The point is business get this,” she said. Despite opposition in Congress, companies such as Walmart, Fox News and the Wall Street Journal company are cutting carbon. “The business train is marching down that track because customers expect companies to reduce their carbon footprint,” Jewell said.

Rhode Island. Gov. Lincoln Chafee said the Ocean State's shallow water offshore and steady wind make it ideal for developing an estimated 3.5 gigawatts of wind energy. Concerns related to fishing, sea life and boaters have been addressed with help from the state’s Ocean Special Area Management Plan (Ocean SAMP).

“We’ll just have to continue to do more on renewable energy. And we want to be in the forefront of that here in Rhode Island," Chafee said.

Sen. Sheldon Whitehouse, D-R.I., said offshore wind projects will create jobs at ports in Providence and Quonset. He stressed an urgent need to expand renewable energy to address climate change. “We are in a very scary spot right now with respect to our carbon pollution," Whitehouse said.

Atmospheric readings show carbon dioxide levels well out of range from the past 800,000 years, when CO2 measured between 170 and 300 parts per million. “We are already at 400 (parts per million). The number is climbing,” Whitehouse said. “And we’re only seeing the leading edge of the effects we’ve already backed in with carbon pollution."

Massachusetts. Richard Sullivan, secretary of the Executive Office of Energy and Environmental Affairs, said the state’s policies for wind energy helped cut the cost of wind below the market rate for electricity. Incentives also helped create 80,000 jobs and 5,500 companies in the renewable energy sector. Massachusetts, he said, plans to invest more in renewable energ, including money for a wind development terminal in New Bedford.

Cape Wind. Twelve years in, the 130-turbine, 420-megawatt project has all the needed state and federal permits, said Dennis Duffy, vice president of Cape Wind. The power-purchase agreements are in place. Final design and financing is underway. The project has weathered 13 appeals and expects decisions on two others this fall, including one financed by billionaire William Koch.

Block Island. Deepwater Wind has invested $30 million in the five-turbine, 30-megawatt project, 3 miles southeast of Block Island. CEO Jeffrey Grybowski said the project is “moving into financial closing mode.” His top priority is to make sure the project qualifies for the federal investment tax credit. Grybowski said he has been challenged to find local vessels to build the turbines. He expects to have final permits issued in the first half of 2014, including construction easements to build an electric transmission line between Block Island and the mainland.

Federal waters. Deepwater Wind won the development rights for the 256-square-mile federal site, which Grybowski described as one of the best in the country for wind development. Commercial fishing concerns have been addressed, he said.

While many permits are still needed, he praised the Ocean SAMP for making the project feasible. Deepwater Wind contributed $3.2 million toward the development of the Ocean SAMP. “We’re confident that the Ocean SAMP has given us a leg up on the whole permitting process," Grybowski said. "And we feel confident that we understand that area much better, frankly, than probably any other developer who understands any other wind energy area on the East Coast.”

The project would run electricity transmission lines to Massachusetts, Connecticut and Long Island, he said. “And make Rhode Island an energy exporter for perhaps the first time in the state’s history," Grybowski said.