Is the United States Ready to Embrace Offshore Wind?

Casey O'Brien(1)-5 By Casey O’Brien, GIELR Senior Editor

Although admirably ambitious, the Cape Wind Project has demonstrated the disappointing shortcomings of the current regulatory scheme for offshore wind. As proposed, the Cape Wind Project would consist of 130 wind turbines located off the coast of Massachusetts in the Nantucket Sound. Cape Wind Associates, the developer of the project, first submitted an application for permitting to the Army Corps of Engineers in 2001 for the construction of a data-collecting meteorological tower. This initial permit set off a cascade of regulatory hurdles for the developers to navigate as they sought to develop the wind farm. It was not until 2010 that Cape Wind was issued a commercial lease to build the offshore wind farm – the first in the United States – and construction has yet to begin. Part of the reason for the delay is the changing regulatory landscape at both the federal and state level, exacerbated by the overwhelming local outcry and years of costly litigation, much of it brought by the Alliance to Protect Nantucket Sound, which has raised fiscal, environmental, and aesthetic counterarguments to the Project.

Unlike landlocked wind farms located in the Midwest, offshore wind farms implicate cumbersome federal and state regulatory issues. Even if the wind farm is located in federal waters, which are generally at least three miles from the shore, transmission lines to carry the energy to the consumer would necessarily cross state land. This means that offshore wind farms require both federal and state permits, which, as the Cape Wind delay demonstrates, can be both drawn-out and costly. Apart from the millions already spent on the permitting and approval process, Cape Wind will lose a significant tax subsidy if construction does not begin by the end of the year, marking yet another possible consequence of the prolonged approval process.

Despite the regulatory and litigation setbacks, offshore wind farms offer an attractive alternative to the issue of transmission bottleneck plaguing wind turbines located on land. As a renewable energy source with plenty of success internationally, many argue that an offshore wind farm like Cape Wind yields more benefits than drawbacks. Some, however, counter that Cape Wind is poised to be an expensive energy source; reacting to similar concerns over the prices to be borne by consumers, the Massachusetts Attorney General, Martha Coakley, negotiated a price reduction in 2010 from 20.7 to 18.7 cents per kilowatt-hour. This is the price to be borne by utility company National Grid, which has agreed to purchase electricity from Cape Wind once the turbines are operational, and ultimately to be passed on to customers. The question becomes whether this price is worth the anticipated energy output, estimated by Cape Wind to average 174 megawatts, 75% of the 230 megawatt average demand for Cape Cod, Martha’s Vineyard, and Nantucket. The legal costs, of course, are quite sizeable, with many powerful opponents motivated to finance delaying tactics to stall the Cape Wind Project from advancing.

When completed, Cape Wind is set to last for twenty-five years before being decommissioned. As the litigation and regulatory hurdles continue, this seems an increasingly short time-span, even if construction were to begin before the end of 2013. The overall delay is disappointing to advocates but shows the importance of allowing community members from the local, state, and federal level to voice opinions on a developing field of energy technology. Litigation has been costly, but has prompted public notice of the technology and the weaknesses of how permitting is currently conducted. While Cape Wind has been the first offshore wind proposal to forge through a changing regulatory scheme – with the federal regulatory jurisdiction being shaped by new legislation as the permitting process was ongoing – ultimately, the lesson may be one of community readiness. Whether the United States is ready to adopt offshore wind farms remains to be seen.