Following the news that the United States’ first offshore development, the Cape Wind Project, may never happen has led to much discussion leading to the conclusion that US offshore wind policy simply isn’t working.
A new report by Clean Energy Group and Navigant Consulting attempts to prove that the problems that surrounded Cape Wind serve to highlight a much larger and widespread issue — that it is almost impossible for any individual state in the Union to jump start an offshore wind industry.
The report therefore recommends a multi-state collaboration that might have a chance at creating a more stable and consistent set of regional policies, financing actions, and permitting, specifically in the Northeast states of the US, where Cape Wind was hoped to be built.
“While the Cape Wind project floundered amidst fierce local opposition, the project’s difficulties highlight a larger policy problem—it is difficult, if not impossible, for any single state to jumpstart the offshore wind industry,” wrote the authors of the report.
Cape Wind endured nearly fifteen years of planning and policy making — not to mention contentious debate — all in an effort to build a 430 MW wind farm off the coast of Cape Cod, Massachusetts. The first proposed US offshore wind farm, and for a time the first set to be built, the idea of Cape Wind now stands as a testament to the incredible difficulty of initiating an offshore wind industry in a country without the political willpower to back it.
“Offshore wind will only become cost competitive and reach its true potential if the states in the Northeast region act together to help create a market for the technology,” the authors add. “The current, go-italone, single-state policy approach has failed.”
The authors of the paper state that “effective collaboration among the states” is the only solution to develop an offshore wind market in the Northeast that has the potential to last. As such, the paper puts fourth seven multi-state policies east-coast states must consider if they are to develop major offshore wind projects.
- Regional Offshore Wind Target. The establishment of a practical regional target (or target range) for offshore wind capacity would produce meaningful economic development and environmental benefits by creating a clear demand signal to developers.
- Coordinated Policy Incentives. Individual state policy drivers, including any incentives for developers, should be consistent across the region to drive demand and produce cost reductions over time through scale up of the offshore wind resource.
- Financing. States should develop new, regional financing mechanisms for regional and single projects, including use of bonds and green bank financing.
- Procurement. States should jointly procure power from one or more large offshore wind projects to reduce costs and create a reliable pipeline of demand for project developers.
- Economic Development. Coordinated, multi-state, economic development strategies rather than purely competitive action would spur economic development activity in the region through the creation of clean energy jobs and potentially new manufacturing facilities.
- Transmission. States should develop joint public funding of regional transmission and interconnection facilities associated with regional projects.
- Permitting. It is essential to the success of the multi-state projects that the policies ultimately adopted for permitting these facilities be standardized.
The report, Up in the Air: What the Northeast States Should Do Together on Offshore Wind, Before It’s Too Late, is available for free download courtesy of Clean Energy Group, and delves further into each of the seven policy areas that need to be addressed.