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US Speeds Offshore Wind Farm Development with More Reviews and Tax Guidance

offshore wind energy
The Biden administration is taking steps to accelerate development of the offshore wind energy industry (Vineyard)

Published Mar 22, 2024 4:03 PM by The Maritime Executive

 

The Biden administration continues to place a high priority on offshore wind as a key part of the country’s renewable energy strategy and is taking steps to support and accelerate the development of the industry. The Bureau of Ocean Energy Management (BOEM) announced plans to start the environmental review for another project while the Treasury Department finally issued long-awaited updates on the tax credits the industry views as essential to its planning.

BOEM reports that it will commence the environmental review of the plan submitted for Vineyard Northeast, the second project from Copenhagen Investment Partners which already has the Vineyard Wind Farm under construction with Avangrid. This second project calls for 2.6 GW of capacity located 29 miles offshore of Nantucket, Massachusetts.  

The Vineyard Northeast proposal includes the installation of up to 160 wind turbine generators, up to three electrical service platforms, and one booster station in an adjacent lease area. It also envisions two offshore export cable corridors, one to Connecticut and one to Massachusetts, and associated onshore transmission systems. 

This will be the 13th review initiated by the Biden administration and follows an announcement just a week ago to also start the view for Atlantic Shores Offshore Wind, which will be off the coast of New Jersey. Last month, the bureau reported it had completed the review for the New England Wind project to be located offshore Massachusetts, while it is also working on broader reviews for the New York Bight, the Central Atlantic, and now the Gulf of Maine.

The industry has also been calling for clarification and steps to implement the tax credits outlined in the Inflation Reduction Act passed in 2022. Eleven months ago they issued the first rules prompting questions from companies in the wind and other sectors. Ørsted and others cited in 2023 the challenges in gaining the credits as presenting a hurdle or the reason for abandoning some of their planned projects.

The Department of the Treasury today issued the long-awaited guidance for the requirements to gain the bonus under the Inflation Reduction Act for clean energy projects and facilities. Developers can receive a bonus of up to 10 percentage points on top of the Investment Tax Credit and an increase of 10 percent for the Production Tax Credit. The act provides a base 30 percent credit for renewable energy projects.

Saying that offshore wind projects make significant investments and create jobs at eligible ports over the duration of the projects, the guidance provided steps permitting offshore wind facilities to attribute their nameplate capacity to additional property in these ports. The guidance also clarifies details for a project that has multiple points of interconnection.

The Treasury Department says these steps will provide additional support to low-income communities by locating the equipment and jobs in those areas. The guidance was critical to the industry which was seeking additional information on the steps required for these credits.