Over a year ago, the Maryland Public Service Commission approved wind turbines to be located in the Atlantic Ocean off the coast of Ocean City, Maryland, and the federal Bureau of Ocean Energy Management (BOEM) has been reviewing those plans. But the town of Ocean City is creating a problem for the wind developer by requiring the turbines to be located at least 26 nautical miles offshore—about twice the distance planned—so that they cannot be seen by tourists that flock to the peninsula during the summer months. U.S. Wind, the developer, has offered the town incentives, including ‘free’ electricity, to get the town to renege on its stance but there is no agreement in sight.
Even the offer of other community investments worth hundreds of thousands of dollars each year and an offer to alter its plans if Ocean City agreed to cover the costs of seeking new government approvals could not help U.S. Wind achieve agreement from Ocean City officials. Town officials fear that tourists will abandon Ocean City and flock to other beaches if its horizon is speckled with huge wind turbines. According to U.S. Wind, building that far offshore would require starting from scratch on an offshore leasing process that began in 2010.
According to Ocean City officials, however, the community benefit package that U.S. Wind offered is vague and undefined. They conclude that the money would be better spent on figuring out a way to move the wind turbines further east. They also note that any offers to supply ‘free’ electricity have been vague, not clearly defined and would potentially violate state and federal law.
The Maryland Public Service Commission approved subsidies, to be paid by ratepayers, last year for two offshore wind projects that would add about $1 to average monthly residential electricity bills across the state, which are a necessary part to financing these very expensive projects. The commission approved 62 turbines at least 14 miles off the coast of Ocean City to be developed by U.S. Wind—a $1.4 billion project—and a 15-turbine, $720 million project by Skipjack Offshore Wind LLC to be situated north of the U.S. Wind project.
Despite the approval by the Maryland Public Service Commission, U.S. Wind now claims they will build just 32 turbines at least 17 nautical miles from shore. U.S. Wind’s original proposal was planned to maximize the project’s profitability, but the company is scaling-back those plans because the market will not bear its larger proposal.
Earlier this year, Ocean City officials pushed for a bill in the Maryland assembly that would have prohibited offshore wind turbines within 30 miles of the coast, but the bill did not make it out of committee. They also asked the Public Service Commission to reconsider the project because of an increase in the proposed turbines’ height–from 200 feet to about 370 feet. Since the offshore wind farms were first approved by the Maryland General Assembly in 2010, the height of the proposed turbines increased due to new technology, making them more visible to those onshore.
U.S. Wind still has several regulatory hurdles it needs to clear to get federal approval, including the presentation of a construction and operation plan to BOEM.
Offshore Wind Power is Expensive
According to the Energy Information Administration, offshore wind turbines are the second most expensive generating technology that the agency considers in its Annual Energy Outlook, behind only solar thermal. The agency estimates that the levelized generating cost of an offshore wind turbine coming on-line in 2022 would be 13.8 cents per kilowatt hour in 2017 dollars—almost 3 times more than a natural gas combined cycle plant and more than twice as much as onshore wind. Transporting and installing turbines on land is significantly easier than constructing foundations and installing turbines at sea—particularly when offshore turbines are becoming much larger.
Offshore projects are massive in scale and size, work has to be performed in a highly corrosive marine environment under variable conditions and installing foundations in seabed of 35 or more meters below sea level is difficult. Performing this work requires a specialized port infrastructure, logistic service providers, construction and maintenance vessels, helicopters and related aviation resources, and other assets. Further, general marine facilities must be strengthened and otherwise upgraded to handle large turbines and foundations. And, offshore wind development has unique transmission concerns, which also add to its cost.
In order for Maryland to reach its goal of 25 percent of its electricity being generated by renewable sources by 2020, it is estimated that at least 2.5 percent will need to come from offshore wind. Maryland electricity consumers and taxpayers will be paying more for electricity produced from these offshore wind farms due to their higher cost and subsidization. For reference, Germany and Denmark—pioneers in offshore wind development—have residential electricity prices that are three times higher than those in the United States. Maryland seems to want to become the state with the first large wind farms despite the higher cost and the failure of the now-cancelled Cape Wind project off Cape Cod, Massachusetts.
A previous article on Maryland’s offshore wind development can be found here.