By David Craik

The ‘Smart from the Start’ initiative was launched by US Secretary of the Interior Ken Salazar to make the leasing and construction of new offshore projects off the Atlantic Coast easier and quicker for developers.

The Government believed that the approval of such projects had become too time-consuming and that the US’s “vast Atlantic wind potential” would be fully harnessed through implementing a smart permitting process that was efficient, thorough, and “unburdened by needless red tape”.

It also wanted to ensure that the farms would be built in the right way and in the right places. The scheme would identify the most suitable Wind Energy Areas for potential development, improve the Government’s coordination with local, state and federal partners and accelerate the leasing process.

Delayed leasing schedule

The Government had hoped to start issuing leases at the end of 2011/early 2012. A commercial lease was handed to the long-delayed Cape Wind project in Massachusetts last year thereby becoming the US’s first offshore farm, but this wasn’t part of the scheme.

Therefore no leases have been issued to date. Is the scheme still going to plan or will Cape Wind remain in isolation in the years ahead?

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) says much has been done and the scheme is very much still on track. Last year it scrapped “inefficient and unnecessary” red tape including issuing two competitive interest notices for potential renewable projects instead of just one to save up to between 6 and 12 months in the leasing process.

It also identified the first WEAs – Delaware, Maryland, New Jersey and Virginia – chosen for their bountiful wind energy and relatively fewer environmental concerns.

Fast forward to 2012 and BOEM announcing in February that the environmental reviews for the WEAs were now complete and that the aim was to hold auctions and issue leases for these areas this year. It also called on interested developers to step forward.

So which developers are keen? Utility Dominion Virginia Power for one. It has already informed the Government that it is interested in obtaining leases in a 113,000 acre area off the state’s coast.

Its nomination for a licence includes all the lease blocks with the potential capacity of between 1500 and 2000MW. It expects the process to be competitive.

Guy Chapman, director Renewable Energy Technology R&D, for Dominion’s Alternative Energy Solutions Group, says the Dominion is interested in the scheme because the focus is on reducing permitting time by streamlining the process.

"We support this as we feel it is a good step towards development of offshore wind energy. The initiative has already been useful in identifying potential mid-Atlantic areas for offshore wind and completing environmental analyses for leasing”, he says.

Great Lakes wind ambition

Perhaps spurred on by the ‘Smart from the Start’ scheme the US government is hoping to do something similar in the Great Lakes, another region with huge offshore potential but not under the jurisdiction of BOEM.

Indeed it is estimated that there is a combined 10GW of wind capacity to be tapped into off the Atlantic Coast and Great Lakes by 2020.

The Government recently signed a Memorandum of Understanding with Great Lake states such as Illinois and Michigan to create a joint action plan to work together to evaluate offshore projects, have a consistent regulatory environment and speed up reviews.

But what of the state governments in the WEU areas? To what extent are they behind offshore wind?

Virginia Governor Bob McDonnell is a fan who sees wind energy as an important long-term resource. The state recently approved the construction of Gamesa prototype 5MW turbine off the coast. Gamesa, however, has since pulled the project, favouring Spain's Canary Islands instead. Delaware wants 20 per cent of its electricity generated by renewable by 2019.

Maryland Governor Martin O’Malley is another supporter. His bill requiring utilities to buy more wind power recently narrowly failed in a finance committee vote despite being approved by delegates and attracting wide public support. The bill will resurface again next year.

Cost concerns

There have been a lot of positive developments, however, it is clear that the cost of offshore wind remains a challenge. Dominion says the levelized cost of offshore wind energy is $243 per megawatt-hour - significantly higher than other generation sources in its portfolio. Dominion hopes that it can reduce the cost of energy by 25 per cent by studying and then applying turbine, foundation and installation innovations.

NRG actually halted plans to develop its 450MW mid-Atlantic wind park off the Delaware coast at the end of last year citing the possible end of government wind tax credits and the failure to secure enough investment.

It said at the time that it was maintaining its developmental rights and a spokesperson says it still expects to have a lease for the wind park by the end of this year.

With the planning in place, the US offshore wind sector is gathering force.

To respond to this article, please write to the Editor: Rikki Stancich

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