OFFSHORE WIND:

Can a DOE competition jump-start wind power in America's vast offshore?

Part one of a two-part series

Right about now, offshore wind developers across the United States have started holding their breath.

Next month, the Department of Energy will announce three competition winners that could blaze a path for offshore wind's future in the United States, where, despite the best efforts of a few determined mavericks, no utility-scale offshore wind farms have yet been built.

When announced in December 2012, the DOE competition involved seven offshore wind demonstration projects that were awarded an initial $4 million to get off the ground. Each has spent the past year scrambling to prove it is one of three that merit an additional $47 million to transform their ambition to "get steel into the water" into reality.

The projects, with backers as diverse as a 501(c)(3) nonprofit and one of the Southeast's largest energy companies, have started work on both U.S. coasts, in the Great Lakes and in the Gulf of Mexico. All aim to be the impetus that begins to spin a robust offshore wind industry in their region.

"It's by building projects that the industry will further enhance knowledge and expertise related to things like installation techniques and shore-side logistics," said Christopher Long, offshore wind siting and policy manager for the American Wind Energy Association. "This really is the first step to launching this industry."

"It's a very intense competition," added offshore wind advocate Catherine Bowes, senior manager for climate and energy with the National Wildlife Federation. "Everyone is watching this very, very closely."

The economics, the ecological challenges and the engineering involved in this competition will present many obstacles. Migratory birds, hurricane-force winds, icy winter conditions and ocean waters more than a mile deep each must be contended with. For the winners, the prize will be to tap the estimated 4,000 gigawatts of wind power that blows unimpeded off America's coastlines.

And the politics have already proved to be tricky, resulting in the death of at least one of DOE's chosen pilot projects.

The projects must prove that offshore wind can compete with other energy sources in an era of cheap natural gas and little hope of nationwide carbon regulations that, by curbing the growth of fossil fuels, could raise the demand for wind technology.

A hefty cost-shaving contest

Speaking at an offshore wind conference held in Boston this February, Deputy Secretary of Energy Daniel Poneman acknowledged offshore wind's "incredible potential" for America. But he also implored industry leaders to prioritize "bringing down every jot and tittle that we can, shaving costs through technology, through improved installation, and critically, critically lowering the cost of capital."

High capital costs can make offshore wind pilot projects a risky venture -- without the $47 million, several of the competitors conceded it's unlikely their projects will proceed as planned.

"This is an emerging industry and they have no revenue...without revenue, it's all investment right now," Bowes said. "For the Department of Energy to step up and join in that investment is really significant."

One of the competitors who allowed that not winning DOE funding "would put a significant delay in the process" was Ian Hatton, CEO of the Austin, Texas-based Baryonyx Corp., which is spearheading an effort to install a three-turbine, 18-megawatt project in the Gulf of Mexico at a cost of $112 million.

The pilot project, called Gulf Offshore Wind or GOWind, is a first step toward Baryonyx's ultimate goal to install a commercial-scale farm in the 41,000 acres on the Gulf that the company has leased from the state.

But Hatton, who spent much of his career in the oil industry, thinks that Texas' long experience with building and supporting offshore drilling rigs will be able to deliver the cost-cutting strategies DOE is seeking.

"I just fundamentally believe that the oil and gas industry, and the industries associated with that in terms of fabrication and project delivery, are able to come up with solutions to deliver a much, much lower cost," Hatton said.

At sea with hurricanes, birds and 'NIMBY'

Beyond developing a cheaper wind farm, GOWind hopes to prove its technology can withstand the hurricanes that frequently batter the Texas coast, a goal that could bring offshore wind to other storm-prone parts of the globe like Southeast Asia, Hatton said.

Another challenge will be demonstrating that the turbines won't threaten bird species that fly over the Gulf of Mexico, a major migratory corridor in the spring and fall. Several Texas environmental groups have expressed concerns about the project.

"There's estimates of millions and millions of birds crossing that Gulf twice a year," said Felipe Chavez-Ramirez, director of conservation programs with the Gulf Coast Bird Observatory in Lake Jackson, Texas. "Clearly, the possibility for impact is there."

Baryonyx and the Army Corps of Engineers are evaluating the project's impacts to migratory birds, with the final environmental impact statement expected in about a year.

"The work that's been carried out so far suggests that actually we're in a location where it is much less of an issue than elsewhere," Hatton said.

But, he added, if the final evaluation determines that building GOWind would come at a significant environmental cost, he's willing to close up shop: "If it turns out there's an overriding reason why the project can't be done, that's it," he said.

The Cleveland-based Lake Erie Energy Development Corp., or LEEDCo, must also overcome issues related to its surrounding environment to move forward.

LEEDCo, a nonprofit public-private partnership between local governments and economic development groups, aims to spur a resurgence of industry jobs in the region by building the first freshwater wind project in North America, an 18 MW, six-turbine project in Lake Erie that will connect to Cleveland's power grid.

The goal of the project, dubbed "Icebreaker," is to develop foundations that can withstand the thick ice that forms on the Great Lakes during the winter, which can compromise a turbine's structural integrity.

"Ice is our biggest challenge. It's also our project's biggest opportunity," said LEEDCo spokesman Eric Ritter, noting that the Great Lakes contain close to 20 percent of the total U.S. offshore wind resources. "You solve the icing challenge, and that unlocks the potential of the entire Great Lakes region."

But like GOWind, Icebreaker's potential impacts to birds and other species have been questioned by environmental groups and wildlife agencies. In an April 7 letter, the Ohio Power Siting Board noted that both the U.S. Fish and Wildlife Service and the Ohio Department of Natural Resources found LEEDCo's bird and bat impact assessments to be incomplete.

Ritter said that the wildlife agencies' request is "a normal part of the permitting process, especially for a first-of-a-kind project like Icebreaker," and that LEEDCo will complete the assessments this summer. He added that the project's small size, distance from shore and location in Lake Erie's central basin were designed specifically to minimize wildlife impacts.

But compared with conservative state leaders and "Not in My Backyard" constituencies, birds and ice may prove relatively low hurdles for Great Lakes offshore wind developers, said Arnold Boezaart, director of the Michigan Alternative and Renewable Energy Center.

The 2010 elections in Michigan and Wisconsin both saw Democratic governors replaced by Republicans, which "instantly kind of turned the lights off on the whole subject" of developing supportive policies for offshore wind in those states, Boezaart said.

Boezaart also raised the example of a private Scandinavian developer's 2010 attempt to build a utility-scale project in Lake Michigan. This effort was stymied by neighboring counties' concerns about the project's visual impacts on tourism and lakefront property values.

"They practically got run out of town with pitchforks," Boezaart said. "... I truly wish LEEDCo all the best, but the Great Lakes region is definitely a challenging environment to advance offshore wind development."

A serious contender in Ore.?

But Ritter has been hard at work rallying local support for Icebreaker, holding more than 300 public meetings since LEEDCo was founded in 2009, with some success; a recent poll found that 80 percent of U.S. Great Lakes Basin residents surveyed supported offshore wind (ClimateWire, April 21).

"There are a heck of a lot of people in Ohio that want to buy clean energy that's produced locally," Ritter said.

Like LEEDCo and Baryonyx, DOE contender Principle Power Inc. is also jockeying to spur offshore wind development in a region the offshore wind industry has mostly overlooked.

The National Renewable Energy Laboratory found that waters off Northern California and southern Oregon hold some of the most significant offshore wind resource potential in the nation at 800 GW. Both states also boast aggressive policies in support of renewables.

The key obstacle facing offshore wind development on the West Coast is simply that the ocean waters are too deep to support the installation of traditional offshore wind turbines (ClimateWire, Oct. 9, 2013).

Seattle-based Principle Power Inc., widely considered to be a top contender for the DOE grant, aims to fix this problem with its floating turbines, called "WindFloat" units, which have been tested on a smaller scale in Portuguese waters. If it wins the $47 million, Principle plans on installing five 6 MW floating units in deep ocean waters near Coos Bay, Ore.

Principle Power passed one milestone this February when the Bureau of Ocean Energy Management released a determination of no competitive interest for the proposed development area. The announcement spurred laudatory remarks for the project from both Interior Secretary Sally Jewell and Oregon Gov. John Kitzhaber (D).

Despite high-profile support for the project, the $47 million grant is a "hugely important" to the project's future, said Principle Power's Kevin Banister, who is WindFloat's project manager. Principle's plan to complete the project by 2017 is contingent on whether it wins the DOE funding.

"We're focused on getting it, and we're assuming we will," Bannister said.

Twitter: @ElizHarball | Email: eharball@eenews.net

Want to read more stories like this?

E&E is the leading source for comprehensive, daily coverage of environmental and energy politics and policy.

Click here to start a free trial to E&E -- the best way to track policy and markets.

Latest Selected Headlines

More headlines&nbspMore headlines

More headlines&nbspMore headlines

More headlines&nbspMore headlines

More headlines&nbspMore headlines

Latest E&ETV Videos