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The on-again, off-again US offshore wind industry is on again, at least for the time being. This time around the state of Maryland is stepping up to the plate with some good news. Although one developer rained on the wind parade by pulling out of an off-take agreement, lawmakers swung into action and set the table for a do-over. What was that again about halting the US offshore industry in its tracks?
The US Offshore Wind Industry Is On Again
Wind developers pulled a vanishing act on several offshore projects in the US last year, with the nearby mid-Atlantic states of New York and New Jersey joining Maryland among those affected by inflation, supply chain woes, and a reported shortage of offshore service vessels.
Resolution is in sight for the service vessel shortfall and other issues, and the curse of the mid-Atlantic is already beginning to vanish into distant memory. Maryland is a case in point. In January, the state appeared to be on the point of losing clean kilowatts from the massive 966-megawatt Skipjack project after the developer, Ørsted, withdrew from off-take agreements with the State of Maryland.
Although Ørsted reportedly said it was still committed to the project (a combination of the company’s Skipjack 1 and 2 proposals), the Maryland Public Service Commission was left holding a massive bag of unused Offshore Renewable Energy Credits.
Not to worry, said state legislators. As reported by offshorewind.biz and other news organizations, by May 9th a fresh piece of legislation, House Bill 1296, was printed up and sent to the desk of Maryland Governor Wes Moore for signing.
When HB 1296 goes into force on June 1 this year, the Maryland PSC will be empowered to reallocate Offshore RECs from the Ørsted’s 846 MW Skipjack 2 project to other offshore projects.
US Wind Picks Up The Offshore Wind Ball
HB 1296 also provides for other offshore developers to revise the capacity of their projects upward, and that’s where the firm US Wind comes in. The company has been pushing to get Maryland’s offshore industry off the drawing board and into the water for the past 13 years.
US Wind was founded in 2011 under the majority ownership of the Italian renewable energy developer Renexia, a subsidiary of the large scale infrastructure firm Toto Holding. It holds the right to develop an offshore wind area in Maryland of up to 1,800 megawatts in capacity. It has two projects in the works, the 300-megawatt MarWin and the 808-megawatt Momentum Wind, potentially allowing room to grow.
US Wind got a shot of adrenaline in 2020 when the leading asset management firm Apollo Global Management climbed on board as a strategic investor with a commitment of up to $265 million to support development and construction costs for the two offshore projects.
“For Apollo, this is an exciting partnership that leverages our track record in renewable energy infrastructure investments and underlines the Firm’s strong commitment to sustainability,” Apollo Senior Partner Geoffrey Strong stated in a press release dated August 14, 2020.
“US Wind is a premier developer at the forefront of an offshore wind energy industry that is rapidly expanding in both the US and abroad, as interests coalesce around clean energy,” Strong added.
Slow & Steady Wins The Offshore Wind Race
All that hard work is finally beginning to pay off for US Wind and Apollo. If all goes according to plan, US Wind expects to build the first offshore wind farm in Maryland waters, along with the state’s first permanent offshore wind manufacturing facility, to be located at the former Bethlehem Steel Shipyard in Baltimore County.
“This legislation is a game-changer for the Maryland offshore wind program,” said US Wind CEO Jeffrey Grybowski, US Wind CEO in a press statement supporting the legislative effort to repair the damage after Ørsted dropped the offtake ball.
State lawmakers did more than damage control. Through HB 1296, they also affirmed their state’s commitment to developing 8.5 gigawatts’ worth of offshore wind by 2031.
HB 1296 also affirms that the “development of offshore wind energy is important to the economic well–being of the State and the nation.” Among other factors, it takes note of the availability of federal funding through two of President Joe Biden’s legislative priorities, the 2021 Infrastructure Investment and Jobs Act (the Bipartisan Infrastructure Law) and the 2022 Inflation Reduction Act.
In addition, Maryland lawmakers deployed HB 1296 to take a few good pokes at the fossil energy industry. They affirmed that the public has an interest in developing “renewable energy sources that increase the nation’s independence from foreign sources of fossil fuels,” reducing “the adverse environmental and health impacts of traditional fossil fuel energy sources,” and providing “a long–term hedge against volatile prices of fossil fuels.”
The Offshore Ripple Effect
If Maryland legislators had not acted swiftly and effectively, the damage could have knocked one leg out of a three-legged offshore wind collaboration announced in 2020, joining the state with North Carolina and Virginia. The three states aim to establish themselves as the centerpiece of the Atlantic coast wind industry for both offshore power generation and onshore manufacturing.
Under the name SMART-POWER (short for Southeast and Mid-Atlantic Regional Transformative Partnership for Offshore Wind Energy Resources), the three states are coordinating resources, including deepwater ports and transportation infrastructure, along with skilled workforces and A-list universities and research institutions.
In the latest development, last October the SMART-POWER collaboration embarked on a workforce and supply chain analysis, aimed at identifying and filling gaps among the member states. The report is expected early next year.
In an interesting twist, the analysis will include Delaware. Despite its relatively ample coastline, Delaware is the only state between North Carolina and Maine without an offshore wind project to its name, as recently pointed out by a team of wind energy advocates.
That could change. In an op-ed published by USA Today on April 4, the advocacy team drew attention to proposed legislation under the title, “Delaware Energy Solutions Act of 2024.” The bill anticipates that offshore wind will be “a significant element of Delaware’s energy future,” assuming costs are competitive.
The bill authorizes the State Energy Office to issue offshore wind solicitations ranging from 800 megawatts to 1,200 megawatts. When last heard from, it passed through committee status on May 7 and is ready for a full hearing, so hold onto your hats.
Meanwhile, as the 2024 Presidential election cycle heats up, it’s worth taking a look at what the candidates are saying about offshore wind.
One is pursuing a widely reported goal of 30 gigawatts of offshore wind by 2030. Another publicly opposed the nation’s first offshore wind farm, which would have been located in the neighborhood of his family’s coastal compound. The third is Donald Trump, who established a strong distaste for wind turbines going back to his 2016 run for office.
Apparently we’re in for another round this year. “Donald Trump has vowed to immediately halt offshore wind energy projects ‘on day one’ of a new term as US president,” The Guardian reported on May 13.
Well, at least we know where he stands.
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Image (cropped) Maryland is back on track to develop its offshore wind resources, with a timely assist from the state legislature (courtesy of US Wind).
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