Developers: Tax credit among the needs for offshore wind’s growth in U.S.

Efforts to build both offshore wind farms and the transmission necessary to bring that wind to shore continue in several areas of the United States.

After years in the permitting process, Cape Wind Associates’ Cape Wind project in Massachusetts received the nation’s first lease for commercial wind energy development on the Outer Continental Shelf in 2010.

Efforts also continue in Texas through such companies as Baryonyx, which received that state’s first lease to develop offshore wind in the Gulf of Mexico, and Wind Energy Systems Technology (W.E.S.T.), who along with Coastal Point Energy, chose in 2011 to focus all efforts on developing offshore wind energy in Galveston, Texas.

Other companies, like Deepwater Wind and Fishermen’s Energy, are pursuing offshore wind energy development in Rhode Island and New Jersey, respectively.

Mark Rodgers, Cape Wind communications director, told TransmissionHub that what the industry most needs at this point is “steel in the water,” adding that Cape Wind is “working hard to try to make that happen.”

Demonstration-scale projects like those proposed by Deepwater Wind in Rhode Island and Fishermen’s Energy in New Jersey are going to be important to provide local examples and success stories that will help all stakeholders, including regulators and members of Congress, increase the amount of capital invested in the sector, he said.

Governments in Europe and China have recognized that this is an industry that creates public benefits and is worthy of incentives in the early years, he said, adding, “It would be a shame if here in the U.S., we did not do that.”

Rodgers said Cape Wind continues to work with the American Wind Energy Association (AWEA) and others on an extension of the production tax credit (PTC) for land-based wind and an extension of the investment tax credit for offshore wind.

In a March 15 statement, AWEA CEO Denise Bode applauded a bipartisan group of Senators for introducing legislation to extend the PTC.

“The support of these Senate leaders, alongside the overwhelmingly strong and bipartisan support the production tax credit extension has received in the House, clearly shows that wind energy is one of the few items of consensus in an otherwise difficult political climate,” Bode said, adding that immediate extension of the PTC is critical in order to save 37,000 U.S. wind manufacturing jobs that will otherwise be lost in the next year.

Atlantic Wind Connection (AWC) CEO Robert Mitchell told TransmissionHub that Congress and President Obama “need to face up to the opportunity of offshore wind and offer tax credits for the launch of this industry.”

While Obama has been supportive of renewable energy and the development of offshore wind, “the administration and Congress need to be even more aggressive in promoting the tax credit,” he said.

The Atlantic Wind Connection project is a proposed offshore backbone electrical transmission system that will be able to connect up to 7,000 MW of offshore when complete. It is led by Trans-Elect Development Company and involves Google, Good Energies and Marubeni Corporation.

Mitchell said there are few opportunities for a nation, and particularly the East Coast states of New Jersey, Delaware and Maryland, to have a new industry launched, noting that offshore wind could produce tens of thousands of jobs over the next 10 or 12 years.

W.E.S.T. Chairman/CEO Herman Schellstede told TransmissionHub that demonstration units must be placed offshore in the U.S., adding that the system will be designed for U.S. waters and will allow low capital cost and low maintenance.

“We cannot use the design model which is used in Europe,” he said. “The capital cost is too exorbitant and the maintenance cost is not within reason. The new design which we have developed will lower the cost of wind farms and allow maintenance to occur offshore without high-priced support vessels. We have worked in the offshore waters for the oil and gas industry for 50 years. We understand what is required to provide the power offshore system.”

This is the second part of a two-part feature. The first part can be accessed here.

About Corina Rivera-Linares 3205 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.