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Incentivized Offshore Wind Act Tabled in U.S.

offshore wind

By MarEx 2015-07-13 16:47:53

U.S. Senators Tom Carper (D-Del.) and Susan Collins (R-Maine) have introduced the Incentivizing Offshore Wind Power Act into Congress to provide financial incentives that encourage investment in offshore wind energy. 

The legislation would create an investment tax credit that is redeemable for the first 3,000 megawatts of offshore wind facilities placed into service, amounting to approximately 600 wind turbines.

In the past, Congress has offered a temporary credit for investments in wind power, the last extension of this credit expired December 31, 2014. This credit has been a lifeline to the nascent offshore wind industry, but it has only been extended by periods of one and two years at a time, say the Senators. This leaves the offshore wind industry without the predictability it needs to fully take advantage of the incentive. The Incentivizing Offshore Wind Power Act would give the industry the certainty needed to plan investments and maximize deployment of this clean power technology.

"Offshore wind energy will mean reliable, homegrown power, cleaner air and good-paying American jobs – it's a win-win-win,” Carper said. "Senator Collins and I have introduced this bill to help create the nurturing environment the industry needs to grow and thrive. Instead of yearly extensions of the investment tax credit that fall short, a credit for the first actors will encourage private sector development of offshore wind facilities across the country and help move the United States closer to energy independence."

"This bipartisan legislation will help catalyze the offshore wind industry and create jobs in the United States," Collins said. "This proposal will help give private sector companies the tax certainty they need to develop this industry in America past its infancy and create a new sustainable source of domestic power."

The legislation defines offshore facilities as any facility located in the inland navigable waters of the United States, including the Great Lakes, or in the coastal waters of the United States including territorial seas, the exclusive economic zone and the outer continental shelf.

The University of Delaware Special Initiative on Offshore Wind estimates that the Atlantic coast holds 330 gigawatts of offshore wind power – enough to meet all electricity needs of the East Coast. The expansion of America’s offshore wind industry would provide not only an opportunity to protect the environment and grow the nation’s economy, but it would also create large scores of new jobs for people living in areas near the coast, state the Senators.

Industry in Its Infancy

While the U.S. is internationally recognized for its strong offshore energy operations, there has been no utility-scale offshore wind energy production in the country to date, says Douglas-Westwood.

Several groups have been working on offshore wind project plans, but they have faced funding difficulties and public resistance, which have negatively impacted their ability to reach a final investment decision. Throughout two rounds, the U.S. Department of Energy selected three offshore wind advanced technology demonstration projects which are expected to start their operation in 2017.

Ahead of the government supported projects, and after seven years of planning, the construction of the Block Island Wind Farm – the first U.S. offshore wind plant – finally began in April 2015. The 30MW farm, located 18 miles from the coast of Rhode Island, consists of five turbines and is expected to start its operation in Q4 2016. The feasibility of the project is secured by a 20-year power purchase agreement.

Supporters

Joining Senators Carper and Collins are Senators Cory Booker (D-N.J.), Sherrod Brown (D-Ohio), Ben Cardin (D-Md.), Chris Coons (D-Del.), Kirsten Gillibrand (D-N.Y.), Angus King (I-Maine), Robert Menendez (D-N.J.), Edward Markey (D-Mass.), Barbara Mikulski (D-Md.), Jack Reed (D-R.I.), Brian Schatz (D-Hawaii), Elizabeth Warren (D-Mass.) and Sheldon Whitehouse (D-R.I.).

A summary of the legislation can be found here