Cape Wind a stark example that offshore wind policy is not working
The news that the Cape Wind project might never be built leads to the stark conclusion that U.S. offshore wind policy isn't working, according to a new report by Clean Energy Group and Navigant Consulting, Inc. The report is the first policy assessment after the major setback of the nation's first proposed offshore wind project.
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Artist's representation of Hy-line Cruises' Cape Wind Eco Tour. Credit: Cape Wind |
The report highlights the policy issues surrounding the Cape Wind project, which struggled for a decade amidst opposition.
The report, "Up in the Air: What the Northeast States Should Do Together on Offshore Wind, Before It's Too Late," says that it is almost impossible for a single state to jumpstart the entire U.S. offshore wind industry and recommends a multi-state collaboration to create stronger, more consistent regional policies, financing actions, and permitting across the Northeast states.
"Cape Wind was a battle of the wallets, and the fossil fuel wallet evidently won. But there is a larger and more important story behind this controversy," said Lewis Milford, president of Clean Energy Group and the lead author of the report. "If Northeast states want to reduce the costs of these projects and create offshore wind jobs, they must develop clear and consistent policies across the region, to give developers good reason to build projects here. If they don't act together soon, they will lose this clean energy resource for decades to come, which will be bad for the economy and the environment."
The report makes some solid recommendations for those states whose goal it is to develop major offshore wind projects. It is imperative that states work together to develop mechanisms to overcome the major barriers like high capital costs, lack of infrastructure (e.g., transmission, ports) and regulatory issues.
To address such issues, the report recommends the establishment of a practical regional target or target range for offshore wind capacity that would produce meaningful economic development and environmental benefits by creating a clear demand signal to developers. Individual state policy drivers, including any incentives for developers, the report says, should be consistent across the region to drive demand and produce cost reductions over time through scale up of the offshore wind resource.
Further, states should develop new, regional financing mechanisms for regional and single projects, including use of bonds and green bank financing, and jointly procure power from one or more large offshore wind projects to reduce costs and create a reliable pipeline of demand for project developers.
In terms of transmission, states should develop joint public funding of regional transmission and interconnection facilities associated with regional projects. It is essential that the policies ultimately adopted for permitting these facilities be standardized.
Finally, the report gives consideration to various implementing mechanisms for the adoption of these policies, including a multi-state buyers' consortium, a state acting on behalf of other states as a bargaining agent, and an offshore wind authority.
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report
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