Offshore wind drifts in a sea of uncertainty after last month's federal budget wrangling. One of many compromises in order to keep the government running was to cut funding for the Energy Department's loan programs.
As a result, NRG Bluewater Wind has halted construction on a weather tower for its 200-megawatt wind farm off the East Coast's Delmarva peninsula. Whether the company will resume development is up in the air. Northward to Nantucket, Cape Wind's 130 turbines are slated to be the first-ever wind farm in U.S. waters. That project is also in a holding pattern after the DOE tabled its application for a loan guarantee.
Bluewater's five-year-old agreement with Delmarva Power—the first offshore wind contract in the U.S.—may now fall through. According to the The News Journal, the company must make a hard decision later this month: bail out and lose $2 million or pay $6 million to the utility to continue with the farm's development. In April, NRG pulled out of a project to build two nuclear reactors in southeastern Texas. The company, reports the Journal, had already invested $331 million in that endeavor.
Representative John Carney (D-DE) says in a statement:
I’m disappointed by NRG’s announcement that they are temporarily halting construction on the Mid-Atlantic Wind Park.
Unfortunately, many in Congress have decided that instead of investing in new sources of energy, the U.S. should continue to hand out billions in unnecessary oil subsidies. Alternative energy creates jobs and helps to curb the nation’s addiction to fossil fuels.
Last summer, Delaware expanded its renewable energy portfolio, requiring utilities to generate 25 percent of their power via renewable sources by 2025.
Standing 13 miles from the shoreline, the Delaware Offshore Wind Park could potentially power 54,000 homes. Bluewater previously expected the farm to come online in 2016. Its unfinished tower, which would monitor weather conditions and bird migrations, is necessary to secure a federal permit.
With all of its necessary permits in hand, the Cape Wind project learned two weeks ago that its application for a loan guarantee will not meet the DOE's September 30th deadline. The loan, according to the developers, would help lower electricity bills for customers. At 18.7 cents per kilowatt-hour, offshore wind power is currently pretty pricey.
But it's not all stormy seas lately for the emerging industry, the Federal Energy Regulatory Commission recently gave its conditional approval for a 250-mile transmission "backbone" that could bring up to 6,000 megawatts of wind power to shore. The $5 billion project could be ready within the decade.
Of course, an undersea transmission line would be useless without any wind turbines connect to. While Bluewater seems to be weighing its options, Cape Wind says it will continue to pursue financing.
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