The US Energy Information Agency closed out 2016 by re-issuing some of its “favorite” observations from the last 12 months, and to cap the series it chose an article that summarizes the Interior Department’s offshore wind lease program for the Atlantic Coast states.
Just a wild guess, but by favorite the agency probably means most significant, and it certainly has hit the nail on the head with offshore wind — even though the US has barely gotten its first “steel in the water.”
US Atlantic Seaboard Should Be A Wind Energy Juggernaut But It’s Not…Yet
That’s too bad, particularly for Atlantic Coast states that are characterized by burgeoning urban centers in the north, industrial acceleration in the south, and a nice long, relatively shallow Continental Shelf of the US eastern seaboard, upon which wind farms are relatively easy to build.
Recognizing the potential (and the need), in 2010 the Obama Administration enlisted practically all of the east coast states to coordinate offshore wind energy development, by committing to an active or at least an observer role in the so-named Atlantic Offshore Wind Energy Consortium.
However, with the notable exception of Rhode Island the effort has stalled, partly due to blowback from Koch-funded state policymakers.
By 2014 the Interior Department began to take matters into its own hands by holding lease auctions for designated offshore wind energy development, state level support or not.
Wind Replaces Diesel
That brings us to the EIA summary. Before getting into the leases, EIA notes the significance of the new Block Island wind farm.
There’s an interesting story behind those generators. Back in 1998, the Wall Street Journal reported that the island’s power company had been installing new diesel generators without permits. Once the US Environmental Protection Agency caught on, the company proposed running a pricey undersea cable over to the mainland to draw electricity from the grid.
According to the Wall Street Journal, Block Island customers were already paying among the highest electricity rates in the US, and the $10 million (in 1998 dollars) cable project would have boosted them even higher.
The emergence of commercial-ready wind technology provided an alternative, though electricity from the new wind farm is also relatively high. According to the Providence Journal it started at 23.5 cents per kilowatt hour in December and rose to 24.4 cents in January, which is almost three times the price of the grid blend. The contract calls for annual increases that top out at 47.9 cents in the final year, though if everything works out the increase will come out to a few cents less.
Like It Or Not, Offshore Wind Leases Are Here
According to EIA, the first federal offshore wind leases went out for bid in 2013, with almost 165,000 acres off Massachusetts and of Rhode Island.
Only eight companies qualified to bid on the 2013 leases. In comparison, 14 companies qualified for the most recent sale, which occurred last month for 80,000 acres off New York State’s Long Island (for the record, Norwegian oil and gas giant Statoil won the lease).
The plan worked, though perhaps a little too well. Backlash against state policy focused on the Koch-supported governor, Pat McCrory. The disaffection grew so intense that Governor McCrory lost his bid for re-election last November, making himself the first incumbent governor in North Carolina history to lose the office.
Wind energy may finally get some wind in its sails with more and more companies qualifying for wind leases.