Race to Erect First Offshore Wind Turbine in USA

Choppy waters are curtailing offshore wind development and frustrating the industry’s cause. The race to be the first to generate electricity in this country may be a close call, although the guys in Texas say that they have the leading edge.

Challenges are ahead and notably winning the regulatory permits and investment capital to move forward. As long as the focus is on diversifying the energy mix and creating carbon-free fuels, developers and other proponents of offshore wind say that they can deliver the goods.

To that end, Coastal Point Energy is in the process of getting a 300-megawatt offshore wind site built about 8.5 miles from Galveston, Texas — and a huge population center. By the end of this year, the private developer expects three megawatts of that total to be ready.

“We have commenced the most critical environmental permitting process and agency contacts indicate we are ahead of any other applicant to get the first offshore wind energy project permitted and in place,” says Coastal Point’s website.

Interestingly, federal permitting is not necessary in Texas when development occurs within 10 miles of the border, making it easier to avoid entanglements. The company says furthermore that the wind turbines will be in 53 feet of shallow water that is more conducive to offshore wind generation. According to the American Wind Energy Association, Texas leads the nation in total wind development with a quarter of the overall installations.

The trend may continue both nationally and internationally, says Pike Research. It says that investment in offshore wind farms will surge in the next several years. From now until 2017, offshore wind will grow from 4.1 gigawatts to 70 gigawatts, says the international consultancy.

“Some of the world’s best wind resources are located offshore,” says senior analyst Peter Asmus. “Often, these high-potential areas are in shallow ocean waters relatively close to urban population centers. Interest in freshwater offshore wind is also picking up, especially in the Great Lakes in the United States and Canadian Midwest.”

Offshore Market

Asmus adds that Europe has been operating wind turbines offshore for close to a decade. Denmark, which already obtains more than 25 percent of its total electricity from wind power, is a key pioneer. Nevertheless, the United Kingdom is the current market leader in Europe. Meanwhile, Germany – despite its limited coast on the North Sea – is also investing heavily in offshore wind, he says.

Along those lines, the European Wind Energy Association says that offshore wind could provide as much as 17 percent of the continent’s electricity by 2030. The long-term offshore wind movement, however, is not limited to Europe. In fact, Pike Research’s market forecast shows that China’s offshore wind market will pull even with Europe’s largest national leaders by 2017.

But Pike Research’s analysis indicates that offshore wind has high associated costs. The price of such generation is greater than that of onshore wind, adding that in some cases it is two to three times more. That factor is driving the industry to deploy larger wind turbines to achieve better value.

Here in this country, Cape Wind has been pending for at least a decade, although developers want to get the first turbines installed this year at the Nantucket Sound site. But regulatory hurdles along with difficulties getting financing still obstruct the project. The U.S. Army Corps of Engineers, which studied the Cape Wind project for three years, says that the economic and overall environmental benefits of that wind farm would outweigh the costs.

When all is said and done, the wind site will cost as much as $2.6 billion — with some of that money going to fight court battles. But in the end, it would generate more than 468 megawatts of wind power that would supply three-quarters of the energy that the residents of the island get.

Meantime, an offshore wind project in Lake Erie that is about seven miles from Cleveland, Ohio has strong legs. It is a $100 million deal that the Lake Erie Energy Development Corp. says will bring 20-30 megawatts on line by late 2013. The agency’s ultimate goal is to get 1,000 megawatts built in Lake Erie.

“By working collaboratively with private industry and our state and federal partners, we can help to accelerate and support the development of wind energy in the Great Lakes,” says U.S. Energy Secretary Steven Chu.

Offshore wind has huge possibilities. But if it is to reach that potential, costs must continue to fall while the regulatory process needs to be streamlined. Some projects could then get going and make private financing much easier.

By Ken Silverstein (energybiz)

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Source: energybiz, June 13, 2011; Image: coastalpointenergyllc