30 Mar 2012

Can Maryland spin any wind turbines off its coast after setbacks in New Jersey and Delaware?

Written by Jim Pierobon

Offshore wind has two strikes against it in New Jersey and Delaware. Cape Wind off Massachusetts’ Nantucket Sound is fighting to stay alive in extra innings. Now Maryland is trying to get ‘on base’ with a second bid by Governor Martin O’Malley which is halfway toward approval (at this writing) by the state’s General Assembly.

A closely-watch proposal in New Jersey to build a 25 -megawatt pilot wind project offshore Atlantic City failed to meet a key state test earlier this year as it weighed the price premium consumers would be expected to pay with the hoped-for benefits. Before any offshore wind farm there can qualify for expensive subsidies from energy utility customers — the main source of financing for the building of wind turbines — it must demonstrate that net economic benefits such as creation of new jobs and other advantages outweigh projected price increases.

The relatively small size of New Jersey’s approach (see The Energy Fix post Nov. 3, 2011 here ) in state waters may doom its chances, especially with Republican Chris Christie as Governor there.

Not one to give up easily, O’Malley recast his 2011 proposal to fund 300 megawatts of wind energy with Offshore Renewable Energy Credits, or ORECs. One OREC is equal to the clean generation attributes of 1 megawatt hour of wind energy. Electricity suppliers in Maryland buy ORECs to help meet their share of a state requirement for sales of electricity generated from renewable and alternative sources.

Last year O’Malley and his allies tried — but failed — to pass a law that would have required the state’s electricity suppliers to pay for wind-generated electricity using a Power Purchase Agreement.

Green, religious and labor groups are planning to surround Maryland's Capitol building Monday hoping to persuade the state Senate to approve Gov. O'Malley's 2012 offshore wind energy proposal. CREDIT: Chesapeake Climate Action Network

O’Malley strengthened his support from clean tech-minded lawmakers in Maryland’s House of Delegates led by Tom Hucker, D-Silver Spring. Today (Friday) Hucker led the charge in passing House Bill 441.

At the start of 2012, O’Malley’s new proposal set the cost cap at 2.5% for businesses. The House Bill 441 has cut it to 1.5% with special considerations for farmers and industrial energy users. The cap on price increases for the “average” household would be $1.50 per month. This is no small difference because wind project developers need to be able to charge higher prices for electricity to earn a satisfactory return on their investment.

Now the sales pitch turns to the often more skeptical Maryland Senate, beginning with its Finance Committee. Senate Majority Leader Robert J. Garagiola, a Montgomery County Democrat and Finance Committee member, said this week he thinks he and supporters of Senate Bill 237 are currently one vote short of passage on the 11-member committee.

Sensing this may be the best — and perhaps last shot — at wind energy off Maryland’s small share of the Mid-Atlantic coast, supporters of many stripes are organizing a “Circle of Support” around the state Capitol in Annapolis Monday, April 2.

O’Malley Administration officials project that a 310-megawatt offshore wind project could support 1,300 manufacturing and construction jobs to build it and 250 permanent jobs maintaining and running the turbines afterward.  O’Malley asserts that Maryland imports nearly 40 percent of the electricity its residents and businesses use, while paying millions in extra charges because of bottlenecks in the regional PJM power transmission network.

If O’Malley’s “Maryland Offshore Wind Energy Act of 2012” fails in these the closing days of the 2012 legislative session, it will likely be a very long time — if ever — before turbines are generating electricity anywhere along the Mid-Atlantic coast.

Earlier this year, the Bluewater Wind project off the coast of Delaware lost the active support of its principal backer, NRG Energy, leaving that state’s efforts up in the air. Without a project in either Maryland, New Jersey or Delaware, Cape Wind Associates in Massachusetts would be in lone pursuit of the elusive distinction of wind-generated electricity in state or U.S. waters. With a federal lease and power purchase contract in hand, developers there hope to begin construction in 2013 in Nantucket Sound.

Commercial scale offshore wind systems have been operating in Europe since 1991. An estimated 3,160 MW of capacity are currently operating worldwide.

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