First commercial offshore wind farm set to open late 2016

by Talk Business & Politics staff ([email protected]) 116 views 

The first commercial wind farm operating off shore of the United States is set to open late this year, according U.S. Energy Information Administration.

Block Island is three miles southeast of the coast of Rhode Island and has five wind turbines, producing 30 megawatts of electricity. The electricity will be used on Block Island, which has received its electricity via diesel-powered generators.

“The high cost of current electricity sources on Block Island helps to reduce the economic hurdles typically associated with power from offshore wind,” according to EIA.

Construction on the project started in July 2015. The developer, Deepwater Wind, has two other leases off the coast of Rhode Island and Massachusetts for future developments, according to EIA. “Although the Block Island Wind Farm was constructed in state waters, these additional leases are farther from shore in federal waters.”

State waters extend offshore about three nautical miles and federal waters reach out to 200 nautical miles. This area forms an exclusive economic zone. The United States has 4,200 gigawatts of potential offshore wind energy, according to an estimate from the National Renewable Energy Laboratory. And most of this potential is in federal waters.

State agencies handle wind development in state waters, and the Bureau of Ocean Energy Management oversees wind projects in federal waters. BOEM hands out leases through competitive bidding and finds areas with wind potential, known as call areas, according to the EIA. If enough commercial developers are interested, BOEM will identify “a call area with sufficient potential for wind development as a wind energy area, where it can hold a future lease sale.”

In 2013, BOEM auctioned off nearly 165,000 acres for wind energy projects off the coasts of Massachusetts and Rhode Island. It was the first competitive federal offshore commercial wind lease sale. Since then, BOEM has hosted four auctions for wind projects in the Atlantic, handed out 11 commercial leases, leased more than 1 million acres of land in federal waters and generated more than $16 million from the lease sales for the federal government.

In the same period, the federal government has received more than $24 billion from offshore energy extraction, mostly from the oil and natural gas industries.

Offshore wind speeds are typically higher and less variable compared to onshore. Also, offshore wind could provide electricity to coastal areas in which demand is great and renewable energy sources are limited on land. But offshore wind costs more than onshore wind, solar or nonrenewable electricity production to meet the U.S. power demand.