Wednesday, June 25, 2008

'First State' in offshore wind energy, too?

Delaware, known as The First State because it was the first of the 13 original states to ratify the U.S. Constitution, is on track to also become the first to meet some of its energy needs from offshore wind turbines.

Bluewater Wind Delaware, LLC, a subsidiary of Babcock & Brown, announced on Monday (6/23) that it had signed a 25-year contract with Delmarva Power to sell the utility up to 200 megawatts of power from an offshore wind farm to be built 11.5 miles off the coast of Rehoboth Beach in Delaware. The turbine mounts will extend 90 feet into the seafloor and 250 feet above the waterline. Each of the three blades will be 150 feet long.

The agreement didn't come easily. For more than a year, Delmarva Power balked at the idea, despite pressure to sign from the state's Public Service Commission, from project supporters in the state legislature and from numerous environmental organizations.

With the project stymied for months in the Legislature, Delmarva Power mounted a public relations campaign claiming the offshore project would increase the average consumer's energy bills. Then the utility appeared to put a nail in Bluewater Wind's coffin with a June 3 announcement that it had signed an agreement with Annapolis, Md.-based Synergics Wind Energy for the purchase of up to 100 megawatts of energy and renewable energy credits from land-based wind farms in western Maryland.

But polls have shown widespread support for the wind project and political bloggers continued to hammer at its critics, lamenting the potentially lost opportunity for Delaware to lock in stable energy prices for consumers and wean the state off fossil-fuel-based power production. With a final push from State Senate Majority Leader Anthony DeLuca, D-Newark, and Delaware Governor Ruth Ann Minner, Delmarva Power agreed to negotiate.

The final agreement is a compromise. Delmarva Power will buy about half of the amount of wind power suggested under an earlier proposal, and at a lower price per megawatt hour. The price drop is due to a reduction in the costs that Delaware customers will pay for renewable energy credits.

The agreement also required legislation to change the state's Renewable Portfolio Standard to allow for a different handling of renewable energy credits from an offshore wind farm. But that posed little problem. On Wednesday, only two days after the agreement was announced, the Legislature passed a bill to do just that--Senate Bill 328--and Governor Minner signed it the same day.

With Delmarva Power agreeing to purchase 200-megawatts of the power produced by the wind farm, Bluewater Wind either will have to scale back it original plan to produce up to 600 megawatts or find other buyers for the power. The company says it will determine the final size of the wind farm within two years and will seek additional energy buyers in the meanwhile. It recently announced a deal to supply power to the Delaware Electric Municipal Corporation and to its nine municipal members.

Before starting construction, the company also must conduct numerous environmental studies and await adoption by the U.S. Department of Interior of final regulations regarding the leasing of land on the Outer Continental Shelf. Draft final regulations are currently being reviewed, according to Bluewater, by the President's Office of Management and Budget (OMB).

Bluewater Wind is one of the companies that is seeking to construct a wind farm off the New Jersey coast to provide renewable energy to the Garden State. It also has expressed interest in offshore projects in New York and Rhode Island.


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