12-2-08 Offshore Wind Webinar

Offshore Wind Power’s
Contribution to 20% Wind

Energy by 2030
December 2, 2008
Outline
20% Wind Energy by 2030: Offshore Wind Power’s

Contribution
• Jen Banks, American Wind Energy Association
Recent Developments in the Offshore Wind Landscape

• Laura Smith Morton, Fulbright & Jaworski L.L.P.
Government Actions to Promote Offshore Wind Energy

Production
• Jim Lanard, Bluewater Wind
1
20% Wind Energy
by 2030
Offshore Wind Power’s Contribution
Jen Banks
American Wind Energy Association
20% Wind Scenario
Explores one scenario for reaching 20% wind

electricity by 2030 and contrasts it to a scenario in
which no new U.S. wind power capacity is
installed
Is not a prediction, but an analysis based on one
scenario
Analyzes wind’s potential contributions to energy
security, economic prosperity and environmental
sustainability
Would require about 300 GW (300,000 MW) of
wind generation
2
Resource Potential Exceeds Total
Electricity Demand
180
Land-Based Offshore Deep Offshore
Class 7 Class 7
160 Class 6
Class 6
Levelized Cost of Energy, $/MWh
Class 5 Class 5
140 Shallow Offshore
Class 4 Class 4
Class 3 Class 3
120
Land-Based
100
80
60
The United Stateshas
United States hasample
amplewind
windresources,
resources,
40 including more
more than
than8,000
8,000GW GWland-based—
onshore —the
the most
most affordable
affordable type
type to to harness.
harness.
20
0
2,000 4,000 6,000 8,000 10,000
Quantity Available, GW
2010 Costs w/o PTC, w/o Transmission or Integration costs
Resource Economically Available Including

Transmission Costs Can Support 20% Wind
160 10% of existing transmission
Land-Based Offshore capacity available to wind
Class 7 Class 7
140 Class 6 Class 6
Levelized Cost of Energy, $/MWh
Class 5 Class 5
120 Class 4 Class 4
Class 3 Class 3
100
80
60
40
20
0
- 200 400 600 800 1,000
Quantity Available, GW
2010 Costs w/ PTC, $1,600/MW-mile,
2010w/o Integration
Costs costs
without PTC, $1,600/MW-mile, without Integration costs
43
3
U.S. Wind Resource Map
Wind Power Classification
Wind Resource Wind Power Wind Speeda Wind Speeda

Power Potential Density at 50 m at 50 m at 50 m
2
Class W/m m/s mph
3 Fair 300 - 400 6.4 - 7.0 14.3 - 15.7

4 Good 400 - 500 7.0 - 7.5 15.7 - 16.8
5 Excellent 500 - 600 7.5 - 8.0 16.8 - 17.9
6 Outstanding 600 - 800 8.0 - 8.8 17.9 - 19.7
7 Superb 800 - 1600 8.8 - 11.1 19.7 - 24.8
a
Wind speeds are based on a Weibull k value of 2.0
20% Wind Scenario
305 GW
Installed Capacity as of July

2008 = 19,500 MW
4
Annual Installed Capacity vs. Current Installed
Capacity
18
16
Annual Installed Capacity (GW)

Capacity additions in 20% Scenario 14
12
10
Actual installations 4
2007: 5,329 MW Projected installations
2008: 7,500 MW* 2
0
06
08
10
12
14
16
18
20
22
20
20
20
20
20
20
20
20
20
Annual GW Installed
Source*: AWEA, 2008
46 States Would Have Substantial Wind

Development by 2030
Wind Capacity
Total Installed (2030)
(GW)
0.0 - 0.1 Includes offshore wind.
0.1 - 1
1-5 The black open square in the center of a state represents
the land area needed for a single wind farm to produce the
5 - 10
projected installed capacity in that state. The brown square
> 10 represents the actual land area that would be dedicated
to the wind turbines (2% of the black open square).
5
Economic Costs of the 20% Wind Scenario
Incremental investment cost of 20%

$3000
Wind Scenario
$2500
2% investment
difference between
Billions of 2006 Dollars
$2000 20% Wind and

No New Wind
$1500
$1000
$500
$0
No New Wind 20% Wind
Wind O&M Costs Fuel Costs

Wind Capital Costs Conventional O&M Costs
Transmission Costs Conventional Capital Costs
Incremental Cost of Scenario Compared to Natural

Gas Consumer Savings from 2007-2030
160
140 The benefits from reduced

120
pressure on natural gas
prices across all gas users
100
would be $150 billion
Dollars*
80 (NPV), by itself exceeding

the incremental cost of
60
investing in the 20%
40 Scenario.
20
0
Incremental Fuel Gas
Natural
Cost Savings
Price Benefits
*NPV in Billions of 2006 Dollars
Source: Hand et al., 2008
6
Wind Could Lead the Fight Against Climate
Change
Million Metric Share of

2006 CO2 Sources Tons/Year Total
Power Generation 2,328 41.3%
Transportation 1,856 32.9%
Industry 862 15.3%
Residential 327 5.8%
Commercial 210 3.7%
Other 55 1.0%
Total 5,638 100.0%
Source: US EPA Inventory of US GHG Emissions & Sinks 1990-2006
Summary: Costs & Benefits
$43 billion
Incremental direct cost to society
50 cents/month avg. hh
825 million tons of CO2
Reductions in emissions of greenhouse gasses and
annually
other atmospheric pollutants
$50 to $145 billion
8% total electric
Reductions in water consumption
17% in 2030
500,000 total with
150,000 direct jobs
Jobs created and other economic benefits
$2 billion in local
annual revenues
Natural gas use reductions and present value 11%

consumer benefits $86-214 billion
Sources: DOE, 2008 and Hand et al., 2008
7
Offshore Projects
Capital cost reduction of 10%
Turbines only 1/3 of installed project cost
Research Development and Demonstration options

• Develop certification methods and standards
• Minimize work at sea
• Increase offshore turbine reliability
• Assess potential of ultra-large offshore turbines
20% Wind by 2030 – Key Findings
20% US wind by 2030 is feasible
Even at 20%, wind still part of an overall portfolio
Substantial net benefits would be realized, and would

be spread across all 50 States
Consistent, long term Federal policies are needed to

realize the full potential of wind
Shows that affordable, accessible wind resources are

available across the nation
8
Recent Developments in the
Offshore Wind Landscape
Laura Smith Morton, Senior Counsel
Washington, D.C.
lmorton@fulbright.com
The Political Landscape
9
Presidential Platform:
Investment in Wind Energy
"We should be building windmills all across the country . . . .”

- Barack Obama
March 11, 2008
“That’s one of the reasons I supported the energy bill that was
passed a year ago . . . because it represented a huge expansion
and investment in wind energy . . . . But it’s also a terrific tool
for economic development, especially in rural areas and places
. . . where we could generate as much as half, the equivalent of
half of the electricity needs of the United States . . . .”
- Barack Obama
May 16, 2008
Transmission Lines
“One of the most important infrastructure projects we

need is a whole new electricity grid. If we are going to
be serious about renewable energy, I want to be able
to get wind power from Minnesota to population
centers like Chicago . . . .”
- Barack Obama
October 30, 2008
10
Renewable Electricity Standards
National Renewable Electricity Standard

● Percentage of electricity consumed in U.S. must be derived from clean,
sustainable energy sources
● Goals:
2012: 10%
2025: 25%
Federal Renewable Electricity Standard

● 2020: 30% of federal government’s electricity to come from renewable
sources
Production Tax Credit
Extend production tax credit for 5 years to encourage

production of renewable energy
“If we don’t get those tax incentives, those federal tax

breaks in place, then you’re going to see a whole lot of
wind power generation and industry moving to
Europe. … It’s already starting to happen.”
- Barack Obama
May 16, 2008
11
OFFSHORE WIND:
CONTRIBUTION TO 20% GOAL
Federal Government Progress:

● U.S. Department of Interior’s Minerals Management Service (MMS)
to publish final regulations on “Alternative Energy and Alternate
Use on the Outer Continental Shelf” by Year-End 2008
States Proceeding with Offshore Wind Development:

● Massachusetts
● Texas
● Delaware
● Rhode Island
● New Jersey
● On the Horizon?
Federal Lands On the OCS

In 2006, DOE estimated that more than 900,000 MW of potential wind
energy exists off the coasts of the United States.
● “Development of offshore wind energy technologies has the potential to
provide up to 70,000 MW of domestic generating capacity to the nation’s
electric grid by 2025.”
Technology White Paper on Wind Energy Potential on the U.S. Outer
Continental Shelf, Minerals Management Service, Renewable Energy and
Alternate Use Program, U.S. Department of the Interior
http://www.ocsenergy.anl.gov/documents/docs/OCS_EIS_WhitePaper_Wind.pdf
In May of 2008, DOE estimated offshore wind capacity could be about

one-sixth of total wind power generation by 2030.
● 28 of the 48 contiguous states have coastal boundaries and use 78% of the
nation’s electricity
12
Statutory Authority
For the seabed of the continental shelf beyond state submerged lands,
OCSLA is the authority, MMS the agency. 43 U.S.C. § 1331 et seq.
Before 2005, OCSLA was a statute for leasing “minerals”: oil and gas,
sulfur, and “other” minerals. 43 U.S.C. § 1337(a), (i) & (k).
EPAct 2005 added § 1337(p): DOI acquired the authority to manage

Alternative Energy and Alternate Use (AEAU) projects on the OCS
● DOI may “grant a lease, easement, or right-of-way” on the OCS for
facilities which “produce or support production, transportation, or
transmission of energy from sources other than oil and gas.” 43 U.S.C. §
1337(p)(1)(c).
Primary Statute Governing Environmental Review

● National Environmental Policy Act
13
Principal Statutes Governing
Wind Development
NEPA (42 U.S.C. § 4331, et seq.) Endangered Species Act (16 U.S.C. §§ 1531 -
1544)
● Requires environmental impact statement ● Consultation with FWS or NFMS on
for federal actions “significantly affecting effects of action on endangered or
the quality of the human environment” threatened species before agency issues
● Triggered by siting on federal land, leases or permits
accessing federal transmission line, federal ● Triggered by acts that result in take or
grants harm to species or habitat such as site
clearing or wind turbine operations
Clean Water Act (33 U.S.C. § 1251, et seq.)
● Regulates discharge of dredged or fill National Historic Preservation Act (16
materials into waters of the United States U.S.C. § 461 et seq.; 30 C.F.R. parts 60 & 800).
● Triggered by activities that may impact ● Applies whenever a federal “undertaking”
federal waters, including wetlands ● Agencies responsible are Advisory Council
on Historic Preservation, Tribal Historic
Federal Aviation Act of 1958 (49 U.S.C. § Preservation Office, State Historic
44718; 14 C.F.R. part 77) Preservation Office, and NPS
● Form requiring proposed markings and lighting
notifies FAA of proposed structures that might
affect navigable airspace Migratory Bird Treaty Act (16 U.S.C. §§703-
712)
● FAA must review possible impacts to air safety
and navigation, as well as the potential or adverse ● Prohibits harm, possession, or taking of
effects on radar system migratory bird species, nests, and eggs
● Strict liability statute
● FWS is lead agency
Principal Statutes Governing

Wind Development (Cont’d)
Rivers and Harbors Act of 1899 (33 U.S.C. Coastal Zone Management Act (16 U.S.C. §
§ 401 et seq.; 33 C.F.R. parts 320-331 & 40 C.F.R. part
230) 1451 et seq.)
● Regulates obstructions to navigable waters of the
● States with federally-approved programs for
United States coastal zone management play major role in siting
wind facilities along the coast and offshore
● U.S. Army Corps of Engineers issues permits.
● Applicant for a federal license or permit to
conduct an activity “affecting any land or water
Marine Mammal Protection Act (16 U.S.C. use or natural resource of the coastal zone of that
§ 1361 et seq.) state” must certify that activity will be conducted
“in a manner consistent with the program”
● Imposes “moratorium” on the “taking” of marine
mammals. Lead agency either FWS or NMFS
● Exceptions relevant to wind development Resource Conservation and Recovery
offshore: intentional take authorization, incidental
harassment authorization Act (42 U.S.C. § 6901 et seq.)
● Requires waste generators to determine whether
they generate hazardous waste
Clean Air Act (42 U.S.C. § 7401 et seq.) ● If any, determine how much they generate and
● Requires EPA (or authorized State agency) to notify the responsible regulatory agency
issue a permit before construction of any new
major stationary source or major modification of a
stationary source of air pollution Marine Protection, Research, and
Sanctuaries Act of 1972 (33 U.S.C. § 1401, et
seq.)
Magnuson-Stevens Fishery ● Prohibits, with certain exceptions, the dumping or
Conservation and Management Act (16 transportation for dumping of materials into ocean
U.S.C. § 1801 et seq.) waters without a permit from the EPA
● Federal agencies must consult with the NMFS on ● Army Corps of Engineers issues permits
proposed Federal actions that may adversely affect
Essential Fish Habitats
14
PROGRESS ON THE
DEPARTMENT OF INTERIOR’S
ALTERNATIVE ENERGY PROGRAM
MMS Alternative Energy Program:

Progress Made
Final Programmatic EIS (PEIS) (issued Nov. 2007)

http://www.ocsenergy.anl.gov/
● Record of Decision (Jan. 2008)
http://www.ocsenergy.anl.gov/documents/docs/OCS_PEIS_ROD.PDF
● Adoption of 52 Best Management Practices
Interim Policy for Leasing (issued Nov. 2007)
● Over 40 nominations received
● Lease Form & Information Collection
● Stakeholder meetings with State agencies
15
MMS Alternative Energy Program:
Progress Made
Regulations (proposed July 11, 2008) 73 Fed. Reg. 39376

http://www.mms.gov/offshore/AlternativeEnergy/Assets/PDFs/NPRfinalF
R07-09-08.pdf
● 283 individual comment letters submitted September 8, 2008
● Currently being reviewed by OMB and other federal agencies
● Expected to be finalized and made effective before January 21, 2009
Alternative Energy Study Program (Ongoing)

● Collecting information for pre-lease needs such as basic
characterization of the environment
● Creation of database of historical properties that may be impacted by
offshore wind development
● http://www.mms.gov/offshore/AlternativeEnergy/Assets/PDFs/AE_SD
P_2009_2011_FINAL.pdf
Interim Policy for Leasing

Interim policy on Offshore Alternative Energy Resource Assessment and
Technology Testing Activities issued Nov. 6, 2007. 72 Fed. Reg. 62673
● http://www.mms.gov/federalregister/PDFs/DataCollectionTechTesting.pdf
● Received over 40 nominations related to approval of meteorological or
marine data collection facilities
Lease Form MMS-0001: for short-term data collection and testing leases
issued Dec. 14, 2007. 72 Fed. Reg. 71152.
● Limited-term leases authorizing data collection and technology testing
subject to compliance with relevant federal statutes;
● Requestors must also obtain necessary approvals for the construction and
placement of associated structures on the OCS lease area;
● No priority rights for commercial sale or distribution
On April 18, 2008, MMS designated five areas as priorities for alternative
energy research. Ten proposed wind energy projects could go forward
in the waters offshore New Jersey, Delaware, and Georgia. 73 Fed.
Reg. 21152.
16
Proposed Rule:
Major Elements
Leasing Process and Issuance Payments (Subpart E)
(Subpart B)
● Competitive & Noncompetitive ● Bonding & Payments
Leasing
● Commercial & Limited Leases
Decommissioning (Subpart I)
Plans (Subpart F)
● Site Assessment & Construction
& Operations Alternate Use (Subpart J)
● General Activities
Conduct of Approved Plan

Activities (Subpart H)
● Environmental & Safety
Monitoring & Inspections
The Rule: Lease Process
Call for Information

Area Identification
Lease Sale Compliance Documents (e.g., EIS, ESA)
Proposed Notice
Final Notice
Award Lease
17
Leases issued on a competitive basis unless there is no

competitive interest
● Section 388: Secretary shall issue a lease, easement, or right-of-way on
a competitive basis unless the Secretary determines after public notice
of a proposed lease, easement, or right-of-way that there is no
competitive interest
Competitive or Non-Competitive
● Competitive bidding process, possibly including auctions of proposed
sites
● Alternative methodologies for resolving lease requests from different
proponents involving overlapping areas.
● Non-competitive? Similar to negotiated agreements for conveyance of
sand or gravel on the OCS
At each stage, MMS will conduct required Federal

environmental compliance (e.g., NEPA, ESA, MBTA,
MMPA) and technical reviews
● Applicant pays for NEPA compliance
Coastal States potentially impacted by proposed lease and

project retain a consulting role in leasing process
● Coastal Zone Management Act (CZMA) and individual state’s
federally-approved coastal zone management plans
● Access to grid
Must obtain all permits otherwise required under state or

federal law (e.g., state energy plans, Army Corps of
Engineers’ permits)
18
The Rule: Lease Types
Commercial Lease: Full development and power generation
● Access and operational rights to produce, sell, and deliver energy
● 6-month preliminary term
● 5-year site assessment term
● 25-year operations term; can be relinquished
Limited Leases: Resource/site assessment and technology testing

● Access and operational rights to conduct short-term activities
● 6-month preliminary term
● 5-year operating term
● Cannot be converted into commercial leases
Both types include a project easement for necessary wires, cables or

pipelines necessary for transmission and/or transportation of energy to
shore (subject to state rights)
● Can be added through an addendum to lease without separate, competitive process
The Rule: General Requirements

for Competitive Leases
Developer’s general eligibility (i.e., U.S. citizen or resident

alien over 18 years of age)
Posting of security:
● $100,000 initial bond proposed
● Additional bonds possible with site assessment and construction and
operations plans
Mandatory payments to U.S.
● Upfront payments of site acquisition fee or deposit on cash bonus
established through solicitation
● Ongoing rental and operating fees for site and rights-of-way and easements
Minimize adverse effects on marine and coastal environment
● Comply with site assessment and construction and operations plans
● Make available to MMS all data about project
19
The Rule: Plans
Site Assessment Plan (SAP) – describes assessment and

survey activities needed to characterize the site (applies to
commercial leases)
Construction & Operations Plan (COP) – describes all

activities and facilities to be installed and used to gather,
transport, transmit, generate, or distribute energy from the
lease (applies to commercial leases)
General Activities Plan (GAP) – describes all activities and

operations related to technology testing, siting (applies to
limited leases, ROWs, RUEs)
The Rule: Inspections
MMS will conduct scheduled and unscheduled inspections
● Verify that activities are conducted as outlined under the lease and
approved plan
● Determine that proper safety equipment has been installed and is
operating as provided under the approved plan
Lessee must develop an annual shelf inspection plan

describing type, extent, and frequency of plan inspections
20
The Rule: Decommissioning
Decommissioning plan
approved by MMS
MMS discretion to allow

structures to remain in place
for alternate use or “rigs to
reefs”
ENVIRONMENTAL STUDIES
AE Environmental Studies Development Plan will guide

MMS’ funding decisions, Leasing, Plan review,
Environmental Assessments and Program decisions.
Proposed, Ongoing, and Completed Studies include:
● Avian Workshops
● Visual Impacts on Historic Properties
● Meteorological and Wave Measurements
● Interactions between Bird Species and Wind Facilities
● Noise Impacts
● Energy Market and Infrastructure Evaluation
For more information on the program, see
http://www.mms.gov/offshore/AlternativeEnergy/Studies.htm
21
Technological Assessment &
Research Studies
Technological Standards and Safety Risk Assessments must
be addressed. Included in program are:
● Comparative Studies to Assess Offshore Wind Turbine Generators
● Inspection Methodologies for Wind Turbine Facilities
● Design Standards to Ensure Structural Safety, Reliability, and
Survivability of Wind Farms and/or Wave or Current Energy
Devices
● Accident studies
For more information, see

http://www.mms.gov/tarprojectcategories/AlternativeEnergy.htm
STATE INITIATIVES:
Offshore Wind Project Developments
22
Massachusetts
Massachusetts Ocean
Management Act enacted
May 2008
● Mandates development of a
comprehensive plan for
state waters, including
identification of offshore
wind development sites, by
December 2009
Massachusetts
Cape Wind
● 130 wind turbines, up to 420 MW, Horseshoe Shoal in Nantucket
Sound
● Permitting process for project components in state waters ongoing
● MMS issued a Draft Environmental Impact Statement (DEIS) and
received public comment
● FEIS anticipated by the end of 2008
Hull
● Mass Technology Collaborative
$1.7 million in a forgivable pre-development loan provided to Town of
Hull Municipal Light Plant (HMLP) for preliminary studies for a 4
turbine wind farm approximately 1.5 miles offshore
● Hull submitted an Environmental Notification Form (ENF) and
Secretary issued Scope for a DEIR
● Technical analysis ongoing
23
Texas
Texas General Land Office (GLO) awarded

competitively bid leases for offshore power
● Five active leases being explored for wind generation.
● First open bidding for leases in 2006
● Four leases awarded in 2007 to Wind Energy Systems
Technology, which already held lease off of Galveston
● Resource Assessment Progressing
● State Waters so not governed by MMS regulations
Delaware Offshore Wind Grant
June 23, 2008, Bluewater

Wind and Delmarva Power
executed a negotiated PPA
for construction of a 200
MW facility off the coast
of Rehoboth Beach,
Delaware
● 25 year contract
● 11.5 miles off coast
● Output of up to 600 MW
expected
24
Rhode Island Offshore Wind
State law mandates that the State must get 16 % of its energy from
renewables by 2019
Wind Farm Siting Study – June 2007

● State and Federal Areas identified
● Entire Rhode Island RPS (15%) to be satisfied
“Special Area Management Plan” funded July 2007 (ongoing)

● Leads: R.I. Coastal Resources Management Council (CRMC), Univ. RI, Sea
Grant
● Participants: MMS, ACOE, RI DEP & adjacent States
● To address Federal Consistency & State Ocean Zoning for current uses - such
as commercial fishing; habitat protection for fish, marine animals, and birds;
and marine transportation --and potential new activities, including renewable
energy development
Rhode Island Grant

RFP issued for company to
● design, build, finance and
operate a wind generation
facility in the waters off RI
coast
● supply at least 15% of the
energy consumed by RI’s
electricity customers
Grant awarded October 2008 to

Deepwater Wind LLC
● 90 day negotiation period
● Cost: $1.5 billion
● Privately funded
First Wind Holdings Inc.
D.E. Shaw & Co., L.P.
Ospraie Management LLC
of New York
25
New Jersey Grant
Executive Order December 2004
● Blue Ribbon Panel on Offshore
Wind
● April 2006 recommendation to seek
pilot program of up to 350 megawatts
Department of Environmental
Protection (DEP) commissioned 18
month, $4.5 million Ocean/Wind
Power Ecological Baseline Study of
Ocean Resources
● Covers waters 20 miles off NJ shore,
excluding Delaware Bay and other
specified areas.
● Environmental analysis (EA)
expected to be issued in summer 2009
● Construction can begin at that time
New Jersey Grant
Solicitation for Proposals to Develop Offshore Wind

Renewable Energy issued in October 2007
● $19 million, 5-year production credit for construction and operation
of an up to 350 MW facility
● 10% to be made available up front to support studies and permitting
September 2008, Board of Public Utilities (BPU) awarded

grant of $4 million to Garden State Offshore Energy
● Joint venture between PSEG Renewable Generation and Deepwater
Wind
● Anticipated to install 96 wind turbines 16-20 miles off the coast of
Atlantic City
● 345.6 MW -- over 1% of State annual electricity consumption
● Construction: 2010 at the earliest
26
New Jersey Offshore Wind
Going Forward
New Jersey Master Plan (October 2008)
● Offshore Wind Planning Group to be established to consider
environmental and economic impacts and various financing
models to support development
● Encourages 4 companies that lost the bid to work with the
Governor’s office, the BPU, and the DEP in order to achieve 1000
MW by 2012
New Goal:
● 20% of state’s power from renewables by 2020
● Includes 3,000 MW from offshore wind power
800,000 homes
13% of state’s energy needs
On the Horizon?
On the Horizon? For a summary of state initiatives

● Federal Waters/OCS as of September 2008, please see
the Report issued by the U.S.
Carolinas
Offshore Wind Collaborative
Georgia
● Status of US Offshore Wind
Maine Development Activity by State
Maryland (2008) which can be
New York downloaded at:
Oregon http://offshorewind.net/Othe
r_Pages/Links%20Library/S
Virginia
ept%202008%20Status%20
● State Waters of%20US%20Offshore%20
Great Lakes Wind%20Development%20
by%20State.pdf
27
When You Think
ALTERNATIVE ENERGY,
TM
Think Fulbright.
HOUSTON • NEW YORK • WASHINGTON, D.C. • AUSTIN • DALLAS • DENVER • LOS ANGELES • MINNEAPOLIS
SAN ANTONIO • ST. LOUIS • BEIJING • DUBAI • HONG KONG • LONDON • MUNICH • RIYADH
www.fulbright.com • 866-FULBRIGHT [866-385-2744]
Government Actions
to Promote Offshore Wind
Energy Production
28
OSW needed to meet state RPS
450 MW OSW Park = ~1.6 M MWh/Yr
• VA 12% 2022 (voluntary) Elec use:106 M MWh/Yr*
• MD 20% by 2022 Elec use: 63 M MWh/Yr
• DE 20% by 2019 Elec use: 11 M MWh/Yr
• NJ 22.5% by 2021 Elec use: 79 M MWh/Yr
• NY 24% by 2013 Elec use: 142 M MWh/Yr
• RI 16% by 2020 Elec use: 7 M MWh/Yr
• MA 15% by 2020 Elec use: 55 M MWh/Yr
Database of State Incentives for Renewables and Efficiency; US EIA 2006 usage data.
*"Elec use" data reflect all electricity used for each state; RPS may be lower.
Benefits of OSW:
ES³ Plus
• Economic Security – Creates jobs and
manufacturing opportunities
• Environmental Security – Supports efforts
to fight climate change
• Energy Security – Reduces reliance on
foreign energy sources
• Consumer Protection – Guarantees stable
pricing
29
Benefits of OSW:
Emissions avoidance
Pollution avoided annually from a
450 MW offshore wind park
CO2 1.35 billion pounds
SOx 14.4 million pounds
NOx 5.17 million pounds
Source: Analysis based on data provided in “Assessment of Delaware Offshore

Wind Power”, University of Delaware. Dhanju, Whitaker, Burton, Tolman, and
Jarvis. September 2005.
The OSW Industry:

Ready for prime time
• By end of 2009, states/utilities will have:
– Issued RFPs for as many as ten OSW parks
– Selected OSW developers to begin fed/state
permitting process
• By end of 2009, OSW developers will have:
– Committed to projects valued at over $10B
– Begun development on siting, ports, vessel
construction/procurement, and
identification of turbine suppliers
30
States will play critical role in
development of OSW
• Provide incentives for U.S. manufacturing
• Job training for OSW technicians
• Adopt policies to support financeable projects
– PPAs
– Merchant with carve out for OSW-RECs
• Coordinated permitting with neighboring states
and federal government
– Coastal zone consistency
– MMS final rule
Federal government has

critical role: Executive Branch
• Publish final MMS Rule
• Single NEPA review
• Fair lease and operating fees
• Permitting
• Support additional staff positions
• Inter (and intra) agency coordination
31
Federal government has
critical role: Congress
• Enact effective PTC and carbon regulation
• Create informal Congressional OSW caucus
to support
– Regulatory refinements
– Inclusion in stimulus package of OSW
initiatives; e.g., support for manufacturing
and port facilities and technology upgrades
Thank You
For more information contact:
Jim Lanard
201.420.1195
jim@bluewaterwind.com
32
Questions?
Offshore Wind Power’s
Contribution to 20% Wind
Energy by 2030
33

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12-2-08 Offshore Wind Webinar

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Offshore Wind Power’s

Contribution to 20% Wind

 20% Wind Energy by 2030: Offshore Wind Power’s

 Recent Developments in the Offshore Wind Landscape

 Government Actions to Promote Offshore Wind Energy

20% Wind Scenario

 Explores one scenario for reaching 20% wind

Resource Economically Available Including

120 Class 4 Class 4

Wind Power Classification

Wind Resource Wind Power Wind Speeda Wind Speeda

3 Fair 300 - 400 6.4 - 7.0 14.3 - 15.7

20% Wind Scenario

Installed Capacity as of July

Annual Installed Capacity (GW)

46 States Would Have Substantial Wind

Incremental investment cost of 20%

$2000 20% Wind and

Wind O&M Costs Fuel Costs

Incremental Cost of Scenario Compared to Natural

140 The benefits from reduced

80 (NPV), by itself exceeding

*NPV in Billions of 2006 Dollars

Source: Hand et al., 2008

Million Metric Share of

Summary: Costs & Benefits

Natural gas use reductions and present value 11%

Sources: DOE, 2008 and Hand et al., 2008

 Capital cost reduction of 10%

 Turbines only 1/3 of installed project cost

 Research Development and Demonstration options

20% Wind by 2030 – Key Findings

 20% US wind by 2030 is feasible

 Even at 20%, wind still part of an overall portfolio

 Substantial net benefits would be realized, and would

 Consistent, long term Federal policies are needed to

 Shows that affordable, accessible wind resources are

The Political Landscape

"We should be building windmills all across the country . . . .”

“One of the most important infrastructure projects we

 National Renewable Electricity Standard

 Federal Renewable Electricity Standard

Extend production tax credit for 5 years to encourage

“If we don’t get those tax incentives, those federal tax

 Federal Government Progress:

 States Proceeding with Offshore Wind Development:

Federal Lands On the OCS

 In May of 2008, DOE estimated offshore wind capacity could be about

 EPAct 2005 added § 1337(p): DOI acquired the authority to manage

 Primary Statute Governing Environmental Review

Principal Statutes Governing

MMS Alternative Energy Program:

Final Programmatic EIS (PEIS) (issued Nov. 2007)

 Regulations (proposed July 11, 2008) 73 Fed. Reg. 39376

 Alternative Energy Study Program (Ongoing)

Interim Policy for Leasing

 Conduct of Approved Plan

The Rule: Lease Process

 Call for Information

 Leases issued on a competitive basis unless there is no

The Rule: Lease Process

 At each stage, MMS will conduct required Federal

 Coastal States potentially impacted by proposed lease and

20% Wind Energy by 2030: Offshore Wind Power’s

Recent Developments in the Offshore Wind Landscape

Government Actions to Promote Offshore Wind Energy

Explores one scenario for reaching 20% wind

Capital cost reduction of 10%

Turbines only 1/3 of installed project cost

Research Development and Demonstration options

20% US wind by 2030 is feasible

Even at 20%, wind still part of an overall portfolio

Substantial net benefits would be realized, and would

Consistent, long term Federal policies are needed to

Shows that affordable, accessible wind resources are

“One of the most important infrastructure projects we

National Renewable Electricity Standard

Federal Renewable Electricity Standard

Extend production tax credit for 5 years to encourage

Federal Government Progress:

States Proceeding with Offshore Wind Development:

In May of 2008, DOE estimated offshore wind capacity could be about

EPAct 2005 added § 1337(p): DOI acquired the authority to manage

Primary Statute Governing Environmental Review

Final Programmatic EIS (PEIS) (issued Nov. 2007)

Regulations (proposed July 11, 2008) 73 Fed. Reg. 39376

Alternative Energy Study Program (Ongoing)

Conduct of Approved Plan

Call for Information

Leases issued on a competitive basis unless there is no

At each stage, MMS will conduct required Federal

Coastal States potentially impacted by proposed lease and

Must obtain all permits otherwise required under state or

Limited Leases: Resource/site assessment and technology testing

Both types include a project easement for necessary wires, cables or

Developer’s general eligibility (i.e., U.S. citizen or resident

Site Assessment Plan (SAP) – describes assessment and

Construction & Operations Plan (COP) – describes all

General Activities Plan (GAP) – describes all activities and

MMS will conduct scheduled and unscheduled inspections

Lessee must develop an annual shelf inspection plan

MMS discretion to allow

AE Environmental Studies Development Plan will guide

For more information, see

Texas General Land Office (GLO) awarded

June 23, 2008, Bluewater

Wind Farm Siting Study – June 2007

“Special Area Management Plan” funded July 2007 (ongoing)

Grant awarded October 2008 to

Solicitation for Proposals to Develop Offshore Wind

September 2008, Board of Public Utilities (BPU) awarded

On the Horizon? For a summary of state initiatives