Exploratory Leases for U.S. Offshore Wind Energy Development

Middelgruden Offshore Wind Farm in Denmark
The U.S. has some work to do to catch up to installations like the Middelgruden Offshore Wind Farm in Denmark.
(cc) United Nations Photo

Calling it a major step forward in President Obama’s new energy frontier, Secretary of the Interior Ken Salazar, joined by New Jersey Gov. Jon S. Corzine, issued five exploratory leases for renewable wind energy production on the Outer Continental Shelf offshore New Jersey and Delaware.

“We are entering a new day for energy production in the United States – a time of clean energy from renewable domestic sources on our Outer Continental Shelf,” Secretary Salazar said. “Other nations have been using offshore wind energy for more than a decade. We made the development of offshore wind energy a top priority for Interior. The technology is proven, effective and available and can create new jobs for Americans while reducing our expensive and dangerous dependence on foreign oil.”

“This is tremendous news for New Jersey and I thank Secretary Salazar and the Obama Administration for issuing these leases which are so critical to getting the development of our offshore wind turbine projects underway,” said Governor Jon S. Corzine. “New Jersey’s Outer Continental Shelf is a resource that holds a great promise for our energy independence and should be considered a haven for the clean, renewable and environmentally friendly energy that wind power provides. This is a major step for the State in meeting its goal of 1000 megawatts by 2013 and 3000 megawatts by 2020.” “The development of clean energy will be a major part of our economic recovery and will help lay the foundation for long- term economic security for our families, our state and our nation,” said U.S. Senator Robert Menendez (D-NJ). “We should be proud that New Jersey has led the way in the effort to harness the tremendous potential that offshore wind in the Atlantic has to generate clean electricity. This lease is a step toward lowering energy costs for families, creating innovative 21st Century industry jobs and reducing our reliance on dirty energy.” Secretary Salazar issued the exploratory leases, the first of their kind ever issued by the Federal Government, to Bluewater Wind New Jersey Energy, LLC; Fishermen’s Energy of New Jersey, LLC; Deepwater Wind, LLC; and Bluewater Wind Delaware, LLC. The leases were developed under an Interim Policy and authorize data gathering activities, allowing for the construction of meteorological towers on the Outer Continental Shelf from six to 18 miles offshore to collect site- specific data on wind speed, intensity, and direction.

The leases exemplify the renewable energy initiatives Secretary Salazar has made a top priority and worked to accelerate. Under his efforts, the final regulatory framework for Outer Continental Shelf renewable energy development was completed in the first 100 days of President Obama’s administration. The comprehensive framework, which regularizes the process and brings certainty to this nascent industry in terms of how applications for OCS wind, solar and hydrokinetic resources would be addressed, had been long delayed in the previous administration. Interior negotiated a breakthrough agreement with the Federal Energy Regulatory Commission on April 9 that clarified the jurisdictional responsibilities for leasing and licensing renewable energy projects.

The President and the Secretary announced the final comprehensive framework on Earth Day, April 22, and it becomes effective on June 29. It provides the “rules of the road” for states and companies with renewable energy initiatives to pursue development of those projects on federal submerged lands as well as methods for sharing 27.5 percent of the revenues generated from these projects with adjacent coastal States. The Secretary then launched a series of 12 Minerals Management Service workshops nationwide to discuss and explain the new program for renewable energy on the Outer Continental Shelf.

The data collected under these leases will be shared with Interior’s Minerals Management Service and used to inform and support future commercial renewable energy projects, such as wind turbine farms, to help coastal States meet mandated renewable energy portfolio standards.

New Jersey is actively pursing the development of offshore wind energy through various state initiatives (e.g., grant solicitations, reimbursement programs, and renewable energy portfolio standards). In October 2008, the New Jersey Board of Public Utilities established a meteorological tower reimbursement program, which provides $4 million per company to help expedite the development of offshore wind.

In Delaware, Delmarva Power signed a power purchase agreement with Bluewater Wind for up to 200MW in June 2008, and the pact was ratified by the state in July 2008. Delaware’s average offshore winds have the potential to produce 5,286 MW, which would power between 1.2 to 1.5 million average homes.

The following companies are receiving the exploratory leases for meteorological towers:

State Distance Offshore Company
New Jersey 15 – 18 miles Bluewater Wind New Jersey Energy, LLC
New Jersey 6 – 9 miles Fishermen’s Energy of New Jersey, LLC
New Jersey 15 – 18 miles Deepwater Wind, LLC
New Jersey 12 – 15 miles Deepwater Wind, LLC
Delaware 14 miles Bluewater Wind Delaware, LLC

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