The Evolution of Offshore Wind Energy in the U . S .⎯

The Evolution of Offshore Wind Energy in the U.S.⎯Virginia’s Role in Achieving Energy Independence

“All of the Above” Energy Policy

Dirty/Fossil Fuels

Clean/Renewable Energy

Coal

Oil

Natural Gas

BiofuelsSolarWind

Onshore

Offshore

: 85% of total energy production


Dirty/Fossil Fuels

Clean/Renewable Energy

Coal

Oil

Natural Gas

BiofuelsSolarWind

Onshore

Offshore

: hidden costseconomic

environmentalsocial

Hidden Costs of Dirty/Fossil Fuels

National/Energy Security: $1B/Day to Import Crude Oil

$67-83B/yr on Overseas Oil Security MissionsX

X The Pew Project on National Security, Energy and climate

VA: $44.5MM/yr Coalfield Employment Enhancement Tax Credit*

* Commonwealth Institute

economic

Federal Coal Subsidies & Benefit PaymentsEstimated at $3.2-$5.4B/YR+

+ Mining Coal, Mounting Costs: The Life Cycle Consequences of Coal

KY: $115MM/yr Coal Subsidies+


environmentalClimate Change

Contributor: Methane & Carbon due to Mining-Related Land Disturbance: $2.2B/yr

Gulf Oil Spill

MTR 500 Appalachian Summits Removed Transforming 1.4mm Acres of

Forest and Burying 2000 Miles of Streams; 2500 miles of Polluted Streams in KY alone

Air Pollution

Sludge, Slurry, and “Fly Ash” Ponds 1300 Coal Combustion Waste (“Fly Ash”) impoundments are adjacent

to Coal-Fired Plants, receiving 130 Million Tons of Waste/YR

COAL: $345B/yr Health & Environmental Costs*

* harvard medical school survey released 2/17/11


Social

100,000 U. S. Miner Deaths since 1900 +200,000 More from Black Lung Disease


Dirty/Fossil Fuels

Clean/Renewable Fuels

Coal

Oil

Natural Gas

SolarWind

Onshore

Offshore

: The Last Mountain: Gasland

: FUEL

Biofuels

Biomass

: FUEL

: Gasland The Last Mountain

SCALE

Distributed GenerationROOFTOP SOLARMICROTURBINES

Community-ScaleBIOMASSWIND: ONSHORE

Biomass

Klickitat County, WA“Wind Power is an Economic Engine for a Rural American Community” (YouTube)

Sherman County, OR“Wind Blows in to a Patch of Oregon Known for Its Unrelenting Winds” (NYT, 5/30/11)

U. S. Currently has 35GW of Onshore Wind in Place and More on

the Way

SCALE



Biomass

Utility-ScaleSOLAR

2/23/10 BrightSource Energy$1.4B Loan Guarantee to Build Some of the World’s Largest Solar Plants

6/17/11 Blythe Solar Plant“Construction Begins on World’s Largest Solar Power Plant”

SCALE



Utility-ScaleSOLAR

Biomass

Wind: OffshoreU. S. Could Have 20GW of Offshore

by 2020 If It Made the Commitment To Do So

Offshore Wind Energy has Existed commercially in europe for nearly 20 Years

Offshore Winds Are Stronger and Steadier than Onshore Winds

Offshore Wind Loads are Closer to Customers

OFFSHORE WIND

DOES NOT EMIT HARMFUL AIR POLLUTANTS, LIKE GREENHOUSE GASES AND MERCURY

WOULD REDUCE THE FINANCIAL RISKS ASSOCIATED WITH FOSSIL FUEL ENERGY PRODUCTION

NEVER BEEN A WIND BLOWOUT

NO WIND MELTDOWNS

NOT A SINGLE WIND-MINING DISASTER

NO GROUND WATER CONTAMINATION FROM WIND FRACKING

NO CLEAN UP NEEDED FROM A WIND SPILL

SOURCE: DEPARTMENT OF ENERGY, NATIONAL RENEWABLE ENERGY LABORATORY

U. S. Renewable Resources

1953: Outer Continental Shelf Lands Act (OCSLA) enacted

1969: National Environmental Policy Act (NEPA)

1970: The Clean Air Act

1972: The Clean Water Act

1981: Congress enacts a moratorium banning offshore drilling for oil and natural gas in the majority of the Outer Continental Shelf (OCS)

1990: President George H. W. Bush issues Presidential Directive supporting the 1981 offshore drilling ban

1998: President Bill Clinton extends the Presidential Directive against offshore drilling through 2012

2005: Energy Policy Act of 2005 authorizes the Minerals Management Service (MMS) to regulate alternative energy on the OCS including wind, wave, current, tidal, and hydrogen generation sources.

2006: “An Inconvenient Truth” premieres

2006: Virginia Energy Plan creates the Virginia Coastal Energy Research Consortium (VCERC) to serve as an interdisciplinary study, research, and information resource for the Commonwealth on coastal energy issues with an initial focus on offshore winds, waves, and marine biomass

2008: President George W. Bush lifts a presidential moratorium on drilling for oil and natural gas on the OCS

2009: 2009 Virginia General Assembly streamlines regulatory process for small renewable energy policy through passage of Permit by Rule (PBR)

2010: March 31: President Obama proposes to open vast expanses of American coastlines that would open up the eastern Gulf and parts of the Atlantic, including off the coast of Virginia, to offshore oil and gas exploration ending a longstanding moratorium on oil exploration along the East Coast from the northern tip of Delaware to the central coast of Florida, covering 167 million acres of ocean

2010:April 8: My 10-year-old son Louie, a Jack Russell Terrier, loses a 4-month battle with lymphoma, heightening my awareness of carcinogens in our environment

April 20: Deepwater Horizon Oil Rig explodes and sinks off the Louisiana coast

June 8: U. S. Secretary of the Interior Ken Salazar and the governors of 10 East Coast states (ME, NH, MA, RI, NY, NJ, DE, MD, VA, and NC) sign a Memorandum of Understanding that formally establishes an Atlantic Offshore Wind Energy Consortium to promote the efficient, orderly, and responsible development of wind resources on the OCS. Salazar quoted as saying “By one estimate, if our nation fully pursues its potential for wind energy on land and offshore, wind can generate as much as 20% of our electricity by 2030 and create a quarter-million jobs in the process.”

June 18: Salazar renames MMS the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE)

June 19: EPA Administrator Lisa Jackson reports: "Three out of four city officials expect that their use of clean energy technologies will increase in the next five years, according to a survey from the U.S. Conference of Mayors. It's great to hear that local leaders recognize that despite tough economic times, an investment in clean energy technology is also an investment in job growth, in healthy communities and families and in the future of our country."

2010:October 6: Salazar signs the nation’s first lease for commercial wind energy on the Outer Continental Shelf (OCS) 4.7 miles off the shore of Cape Cod, MA, with Cape Wind Associates, LLC potential to meet 75% demand for Cape Cod, Martha’s Vineyard, and Nantucket Island

November 23: Salazar launches a “Smart from the Start” wind energy initiative for the Atlantic OCS to facilitate siting, leasing, and construction of new projects

October 12: Google (37.5% Equity Share “ES”), renewable energy investment firm Good Energies (37.5% ES), Japanese trading company Marubeni Corporation (15% ES), and Trans-Elect Development Company (10% ES), LLC, partner to create the Atlantic Wind Connection (AWC) project an underwater transmission “backbone” that will connect more than 6,000 MW of offshore wind to the transmission grid•350 miles of high voltage direct current (“HVDC”) lines•New York City to Virginia •$5B over 10 years in 5 phases to power 1.9mm HH•Estimated construction start: 2013 •First phase operational: 2016

SMART FROM THE START17-20 Agencies/Acts

8 years from application to permit

AGENCIESDepartment of the Interior (DOI)

National Parks & RecreationFish & Wildlife

Department of Defense (DOD)U. S. Coast Guard

Environmental Protection Agency (EPA)U. S. Army Corps of Engineers

National Oceanic and Atmospheric Administration (NOAA)Department of Energy (DOE)

Federal Aviation Administration (FAA)

ACTSThe Rivers and Harbors Act of 1899

Section 401, Clean Water ActEndangered Species Act

Coastal Zone Management ActNEPA

Fish & Wildlife Coordination ActNational Historic Preservation Act (Sunken Historic Vessels)

2010:December 1: The Obama Administration rescinds its decision to expand offshore oil exploration into the eastern Gulf of Mexico and along the Atlantic and Pacific Coasts as part of the next five-year drilling plan, reversing 3/31 policy changes and effectively extending the drilling moratorium in this area through 2017

2011:March 23: Swedish Vattenfall Group announces the installation of one of the world's largest offshore wind turbines, the first of 30 to be installed at its Ormonde Offshore Wind Farm in The Irish Sea that will ultimately supply clean energy for 100,000 homes each year.

March 24: Salazar announces plans to auction off 758 million tons of coal reserves in Wyoming that will take somewhere between 10-20 years to mine

2011:March 30: The VA Marine Resources Commission unanimously votes to allow Gamesa Energy to conduct scientific surveys to determine if conditions are ripe for construction of a single, prototype windmill that would generate as much as 5MW electricity in waters about 3 miles west of Cape Charles on the Eastern Shore.

May 19: The Federal Energy Regulatory Commission (FERC) unanimously granted a 12.59% return on AWC’s equity investment clearing the way for the energy transmission backbone to move forward

MID-ATLANTIC BIGHTCape Cod, Ma

to Cape Hatteras, NC

Mid-Atlantic Bight

Cape Cod, Ma to

Cape Hatteras, NC

Windy

Shallow

Close to Consumers

“the Saudi Arabia of offshore wind”

81% of the Population (245mm People) Live in 28 Coastal States

Consuming 75% of the Country’s Electricity

Rank by % of Electricity Wind Can Provide

State

% of State Electric Generation Potentially Supplied by Offshore

Wind

Economically Recoverable

Offshore Wind Resource (MW)

% of State Electricity

Supplied by Fossil Fuel (2008)

Primary Source of Electric Energy (2008)

1 Delaware 137% 2,850 91.3% Coal (70%)

2 Massachusetts 130% 13,800 80.6% Natural Gas (50.6%)

3 North Carolina 112% 37,900 64.1% Coal (60.5%)

4 New Jersey 92% 16,000 47.3% Nuclear (50.6%)

5 Virginia 83% 16,000 58.1% Coal (43.7%)

6 South Carolina 64% 19,200 47.0% Nuclear (51.3%)

7 Rhode Island 38% 739 97.8% Natural Gas (97.4%)

8 Maryland 36% 4,680 62.3% Coal (57.5%)

9 Florida 16% 10,300 82.1% Natural Gas (47.1%)

10 New York 12% 4,730 47.7% Natural Gas (31.3%)

11 Georgia 3% 1,190 73.2% Coal (62.8%)

Total 48% 127,389 64.9% Coal (39%)

Maine 913% 38,900 48.4% Natural Gas (43.2%)

New Hampshire 21% 1,230 46.6% Natural Gas (30.9%)

Source: Untapped Wealth: Offshore Wind Can Deliver Cleaner, More Affordable Energy and More Jobs Than Offshore Oil

Developing 127GW (30% more capacity than comparable oil & gas) offshore wind energy over 20 years would provide energy at a cost of about $36B less than the production of

economically recoverable new offshore oil and natural gas.

Offshore Wind Potential Offshore Wind as Percent of Electric Generation Carbon Dioxide Displaced

16 GW 83% 43.6 million metric tons

Renewable 3%

Coal 44%

Oil2%

Natural Gas 13%

Nuclear38%

83%Of Virginia’s Electricity Generation

Offshore Wind PotentialCurrent Energy Mix

Annual Electricity Fuel Costs

Coal $926.5 Million

Natural Gas $762.6 Million

Petroleum $196.5 Million

Nuclear $147.7 Million

Average Residential Cost per kWh

09.6¢

Average Offshore Wind Cost per kWh

11.8¢

4thLargest Offshore Wind Capacity Potential on East Coast

5.5 MillionAverage Homes Powered Annually


Virginia

Job Creation Estimates of 10,000 to 16,700-26,600 permanent jobs

Nearly 58%

from Fossil Fuel

Cape Wind

NJ

Capacity16GW

468MW

130 Turbines

200,000HH

75% of the electricity for Cape

Cod, Martha’s Vineyard, and

Nantucket Island

Bluewater Wind

DE

Capacity2.85GW

450MWDE

Gamesa

VA

Capacity16GW

5MW VA

BARRIERS TO ENTRY OF OFFSHORE WIND ENERGY

Former EPA Air Enforcement Division Director Bruce Buckheit is currently working on a comprehensive study

Environmental Impact Study (EIS)

Adjustment in migratory patterns (Danish 8 year avian study)

Prime scalloping dredging fleet

Military Radar Interference

Shipping Lanes

Intermittency

Eliminate federal subsidies for fossil fuels and redirect these funds to renewable energies and energy efficiency programs.

Stop all new offshore oil and gas drilling to prevent future spills and minimize competition for resources and expertise that will slow the development of offshore wind energy.

Require leasing of installation vessels for offshore wind turbine construction be given priority so that it is not impeded by offshore oil and natural gas development.

Increase and make permanent the tax credit for investment in advanced energy property outlined in the American Recovery and Reinvestment Tax Act of 2009. This legislation extends the 30% credit for investment in qualified property used in a qualified advanced energy manufacturing project, but ends in 2012. In addition, these tax credits should be extended to manufacturers of offshore wind turbine components and turbine installation vessels.

RECOMMENDATIONS


Increase and make permanent the Innovative Technology Loan Guarantee Program for opening, expanding or modernizing facilities to manufacture offshore wind turbine components and extend this program to turbine installation vessel manufacturing.

Use policy mechanisms that increase the long-term demand for and supply of renewable energies, such as a robust Renewable Electricity Standard or Feed-In Tariffs, Production and Investment Tax Credits, Loan Guarantee programs for renewable energy products and technology manufacturers and training programs.

Accelerate the electrification of the transportation fleet through incentives to automobile manufacturers and purchasers and by building the needed infrastructure such as charging stations to allow maximal use of this new technology.

Recognize external costs of fossil fuels to ensure realistic cost comparisons.

Set mandatory Renewable Portfolio Standards (RPS) for VA.

RECOMMENDATIONS


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The Evolution of Offshore Wind Energy in the U . S .⎯