Ready to go, offshore wind sector awaiting government incentives


A regulatory framework is in place. Government agencies have issued permits. One by one, lawsuits have been defeated. Maritime traffic lanes are being identified. Construction contracts are ready to go out.

Glosten Associates and Keppel AmFELS have designed a jackup barge able to transport three preassembled turbine units that onboard hydraulic pile-driving equipment could install in water as deep as 213 feet. (Photo courtesy Glosten Associates)

Now all the offshore wind industry needs to start installing turbines along the East Coast is a renewal of federal financial incentives that the companies thought had already been secured.

Cape Wind Associates stands ready to award the general contract to build the nation's first-ever offshore wind farm off Massachusetts. The agreement would include the hiring of lift boats, tugs, barges and cable-laying vessels, while providing jobs for mariners and shoreside shipyard workers.

Unfortunately for the Nantucket Sound project, Congress has halted two key funding programs that the nation's offshore wind industry was counting on to leverage enough private investment to get started. The 2011 budget resolution ended an investment tax credit, and the U.S. Department of Energy's loan guarantee program is set to expire Sept. 30.

The permanent demise of either the tax credit or the loan guarantees may prevent the industry from getting off the ground in the United States said Jim Lanard, president of the Offshore Wind Development Coalition.

"The elimination of federal loan guarantees presents a significant problem for offshore wind developers, since these guarantees significantly lower the cost of borrowing funds for an offshore wind farm," Lanard said. "The loans would also begin to balance the substantial subsidies other sources of electricity generation receive from various federal tax incentive programs."

The loan-guarantee program was part of the 2009 federal stimulus package. The September 2011 deadline for loan closings proved to be unrealistic, given the complexity of government permitting processes.

During the 2011 budget and debt-ceiling debates, some members of Congress expressed a desire to end federal subsidies for alternative energy, either to reduce the deficit or to preserve existing aid for oil and gas producers.
 

No U.S.-flag vessels designed expressly for offshore wind construction and maintenance now exist, but an Austal shipyard in Australia is building 69-foot aluminum catamarans designed for moving service crews and equipment to turbine farms. (Photo courtesy Glosten Associates)

The financial uncertainty is delaying Cape Wind's final decision on awarding a general contract for its 130-turbine project. NRG Bluewater Wind has postponed the construction of a weather-data tower at the site of its proposed Delaware wind farm.

Fisherman's Energy's six-turbine demonstration project, which won permits for construction in 2012 near Atlantic City, N.J., also may be impacted as it hasn't secured a revenue stream yet.

Both the recent Bush and Obama administrations endorsed the goal of producing 20 percent of the nation's electricity from wind by 2030.

Cape Wind spokesman Mark Rodgers said there was always an understanding that government incentives would be needed to germinate the industry, which is brand new in the United States. He said Cape Wind is "a good fit" for the government's stated policy goal. Although the Massachusetts project has a 15-year agreement to sell 50 percent of its generated power to National Grid, taxpayer money inevitably would be needed to develop the estimated $2.5 billion project — or any other large-scale offshore wind farm.

"In the present financial market, it's going to be difficult for an offshore wind farm in the United States to go forward," Rodgers said. "More broadly, where you see clean energy really taking off and flourishing in the world is places where governments felt that the investment makes sense. The current policy debate in the United States is really running counter to that."

Europe, which has a 20-year head start on the United States, now boasts more than 40 farms in European waters, generating about 2,400 megawatts (mW). Sixteen more that are under construction will almost triple that amount of power. China also is building rapidly and soon will have about 2,400 mW in offshore wind power generation.

For the past few years, government agencies, industry representatives and other interested parties have been busy setting up the rules and partnerships to make offshore wind a reality in the United States. This year, the U.S. Department of the Interior released the rule-making framework it will use to approve offshore wind farms. Interior's Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) later approved the Cape Wind project and entered lease negotiations with Bluewater Wind.

In July, BOEMRE signed a collaboration agreement with the U.S. Coast Guard clarifying each agency's responsibilities in overseeing offshore installations. BOEMRE also pledged to study worker safety issues at offshore wind sites. The Coast Guard is talking with American Waterways Operators and other stakeholders about the need for maritime fairways in the vicinity of the proposed wind farms, some of which lie in or near busy shipping lanes.

Lawsuits opposing offshore wind farms have been filed by environmental groups, Indian tribes and coastal landowners. In the case of Cape Wind, courts rejected at least 14 legal challenges, with one more tribal lawsuit pending as of August.

If Cape Wind does get built, a diverse fleet of commercial vessels will be needed to install, service and maintain the Siemens wind turbines and their towers and cables. Rodgers said the boats and mariners would be hired by the general construction contractor. These would not be purpose-built for the offshore wind industry.

According to an environmental impact report the company filed with the state of Massachusetts, an estimated four to six vessels ranging in length from 90 to 400 feet — mostly tugs and barges — would work during the subsea platform and pile-driving phases. The other vessels would carry construction materials from various local ports. Crew boats would deliver and remove crews twice a day.

A jackup barge with a large crane and pile-driving equipment would install the monopiles. The vessel is expected to have six legs with pads. The crane would lift the monopiles from the delivery barge, which would be held in place by a tug. Two of the specialized pile-driving barges would be present at any given time over the duration of the estimated eight-month installation.

A second barge would carry transition pieces that get placed on the monopiles. Towers, nacelles, hubs and blades would be transported on a third barge. After the turbines were installed, a cable-laying vessel would string inner-array cables and high-voltage transmission lines along the seabed toward shore.

Much of the platform and superstructure equipment will be prefabricated on shore. Rodgers said Cape Wind may choose New Bedford Marine Commerce Terminal for its construction staging port. The company is considering Falmouth and Harwich Port for the "operation and maintenance-phase port."

A halt to the first offshore wind projects also would inhibit development and construction of Jones Act offshore wind specialty vessels. Bluewater Wind has said it hoped to partner with Aker Philadelphia shipyard to construct three wind turbine installation vessels in a project that would depend on a Department of Energy grant.

Glosten Associates and Keppel AmFELS shipyard in Brownsville, Texas, have designed a jackup wind turbine installer barge that can be self-propelled or towed. Each vessel would be able to transport three preassembled turbine units upright and their foundations. Onboard hydraulic pile-driving equipment would install the turbine assemblies in water as deep as 213 feet.

Offshore wind specialty vessels are already being manufactured for overseas markets. For example, Austal's shipyard in Henderson, Australia, has a contract to deliver three purpose-built wind energy offshore support vessels for U.K.-based Turbine Transfers Ltd. The 69-foot aluminum catamarans will specialize in transporting service crews and equipment to turbine farms.

Purpose-built Jones Act offshore wind specialty vessels will not be available in time for the scheduled construction of Cape Wind's Nantucket Sound farm.

"We don't plan on using them for our project, but certainly the industry will need them as it evolves," Rodgers said.

Two Maine marine construction companies are contributing to a university experiment that is testing various designs for deepwater floating wind energy turbines. Bath Iron Works and Cianbro Corp. will assemble and deploy a prototype turbine in 300 feet of water near Monhegan Island in July 2012. Project leader DeepCwind Consortium originally had planned to install multiple test turbines this year.

First, the consortium is experimenting with three deepwater turbine designs in miniature form at a University of Maine laboratory's wave-wind basin, said Habib Dagher, professor of civil and structural engineering and director of the university's Advanced Structures and Composites Center. The three candidates are a ballast-stabilized spar design, a tension leg platform and a semi-submersible.

"We're studying the pros and cons of each design," Dagher said. "We're very encouraged by the performance of these units. All three … survived the extreme events and the stresses and the strains."

Noting the government budget deficits and ongoing federal spending debate, Dagher said political leaders ultimately will support investment in offshore wind.

Offshore wind power "is an extremely high priority for the country and it has been selected as a key program for the energy future of the United States," he said.

Even during Congress's highly charged debt-ceiling confrontation, the industry garnered some bipartisan support. In July, U.S. senators Tom Carper, a Democrat from Delaware, and Olympia Snowe, a Maine Republican, introduced a bill that would extend the tax credit program for the nation's first 600 offshore wind turbines. No committee action had been taken on that bill by press time.

By Professional Mariner Staff