They say the third time’s a charm, and as of Friday, that saying is true for offshore wind in Maryland.
After failing in the state legislature in 2011 and 2012, Maryland Governor Martin O’Malley’s signature clean energy initiative was finally passed by the state senate, ensuring it will reach his desk to be signed into law.
AB 226, also known as the Maryland Offshore Wind Energy Act of 2013, will create a “carve-out” within the state’s renewable portfolio standard (RPS), mandating a certain percentage of total electricity generated in Maryland is met by offshore wind energy beginning in 2017.
200MW Of Offshore Wind Blowing This Way
The exact percentage of state electricity sales that must be met by offshore wind under the state RPS will be determined annually by state regulators, and will be based on the creation of “offshore wind renewable energy credits” (ORECs).
Roughly 200 megawatts (MW) of offshore wind capacity will likely be built as a direct result of the bill, and Governor O’Malley has previously said 40 turbines will be built about 10 miles off the coastline, creating 850 green jobs.
In previous years, offshore wind legislation was killed by concerns about impacts on consumer utility bills, but the 2013 legislation contained multiple safeguards to reduce that risk.
Multiple Consumer & Price Protections
To start, regulatory approval will only occur if the rate impact does not exceed $1.50 per month for an average residential customer. Statewide polling from 2012 showed two-thirds of voters favored developing offshore wind even if it raised rates by $2 per month.
In addition, the price set in proposed OREC pricing schedule may not exceed $190 per megawatt-hour (MWh) in 2012 dollars and OREC payments may not be made to project developers until electricity supply is generate by the project. ORECs will be sold at competitive prices and credit prices would be allowed to rise and fall with market rates to ensure stable profits.
Gigantic Green Economic Growth?
Even though the expected offshore wind farm would only be half the size as those proposed in previous years, advocates still hailed the legislation’s potential to jump start Maryland’s clean energy economy.
“This bill is to offshore wind power in the Mid-Atlantic what the early railroads were to American transportation,” said Mike Tidwell, executive director of the Chesapeake Climate Action Network. “It’s a driver of innovation that will create jobs, enhance our economy, improve public health, and protect the climate.”
Indeed, a recent report estimated US offshore wind’s potential at 300,000 jobs and $200 billion in new economic activity. Mid-Atlantic states seem to sense this opportunity and are clamoring to be first in line to harness offshore wind.
Maryland’s action comes fast on the heels of Massachusetts finally approving Cape Wind’s power purchase agreement with local utility NSTAR, and New Jersey being selected for the first Atlantic Wind Connection offshore transmission project phase.
But while an offshore wind industry is finally coming into sight on America’s horizon, Europe installed more than one offshore wind turbine per working day in 2012 and China plans 5,000MW of new offshore wind capacity by 2015, leading many to ask if the ship has sailed for America to lead in this growing economic opportunity.
Silvio is Principal at Marcacci Communications, a full-service clean energy public relations company based in Washington, D.C.