The Offshore Grid: the Future of America's Offshore Wind Energy
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The Offshore Grid: The Future of America’s Offshore Wind Energy Potential Benjamin Fox* As the United States moves toward the increasing integration of renewable energy sources, an examination and analysis of the country‘s failure to develop its offshore wind resources is essential. Such a failure is incongruous with the United States‘ world-leading status in renewable energy innovation and is particularly troubling given the abundance of offshore wind resources along densely populated U.S. coastal states that lack other renewable energy alternatives. First, this Note will establish the importance of offshore wind as a renewable energy resource and examine major barriers to its development. Second, an examination of the Atlantic Wind Connection transmission project will demonstrate the important role offshore transmission may play in jumpstarting the U.S. offshore wind industry. Third, this Note will survey approaches adopted by other states and regions to develop transmission infrastructure to deliver disparate sources of renewable energy. Last, this Note will identify best practices from previous transmission approaches to identify where future offshore transmission projects would be most effective and identify the types of policies necessary to spur offshore wind energy development. Introduction ............................................................................................... 652 I. Why is Offshore Wind Power Important? ........................................... 655 A. Advantages of Offshore Wind Power .......................................... 655 B. Challenges to the Development of Offshore Wind Power ........... 657 1. Financial Challenges .............................................................. 657 2. Regulatory Challenges ........................................................... 660 C. Future Significance ...................................................................... 663 II. The Atlantic Wind Connection ............................................................ 663 A. AWC Background Information .................................................... 664 B. Is the AWC an Important Project? ............................................... 666 1. AWC and RPS ....................................................................... 666 2. Economic Benefits offered by the AWC ............................... 670 651 652 ECOLOGY LAW QUARTERLY [Vol. 42:651 III. The ―Chicken-and-Egg‖ Problem: Additional Approaches to Foster Transmission and Renewable Energy Development ........................... 673 A. Texas‘s Competitive Renewable Energy Zones .......................... 674 B. California‘s Renewable Energy Transmission Initiative ............. 675 C. Hawaii‘s Inter-Island Undersea Cable ......................................... 677 D. Regional and Federal Approaches ............................................... 679 1. Western Renewable Energy Zone Process ............................. 679 2. Energy Policy Act of 2005 and FERC Order 1000 ................ 681 E. Summary ...................................................................................... 682 IV. The Path Forward ................................................................................ 683 A. The Northeast Coast ..................................................................... 685 B. Great Lakes Region ..................................................................... 690 C. Future Areas of Interest ............................................................... 693 1. Southeast Coast ...................................................................... 693 2. West Coast ............................................................................. 694 Conclusion ................................................................................................. 697 INTRODUCTION As the effects of global climate change have become more pronounced, the international focus on investment and deployment of renewable energy has grown rapidly. Global investment in clean energy technologies reached $310 billion in 2014, a more than four hundred percent increase from the total investment of the preceding decade.1 Domestically, despite the increasingly politically charged dialogue surrounding clean energy development and low- carbon energy sources,2 the United States remains a world leader in clean energy technology investment and the installation of renewable energy capacity. In 2013 the United States invested $36.7 billion in clean energy technology and its 138.2 gigawatts (GWs) of renewable energy installed capacity is second only to China.3 Copyright © 2015 Regents of the University of California. * Winner of the Harmon Prize 1. LUKE MILLS, BLOOMBERG NEW ENERGY FINANCE, GLOBAL TRENDS IN CLEAN ENERGY INVESTMENT 4 (2015), http://about.bnef.com/content/uploads/sites/4/2015/04/BNEF_clean_energy _factpack_q1_2015.pdf; Louise Downing, Clean Energy Investment Jumps 16%, Shaking Off Oil‘s Drop, BLOOMBERG BUS. (Jan. 9, 2015, 3:00 AM), http://www.bloomberg.com/news/articles/2015-01- 09/clean-energy-investment-jumps-16-on-china-s-support-for-solar. 2. A November 2011 Pew Research poll found that support for federal funding of alternative energy research had declined nearly thirty points for Republicans since April 2009 while increasing one point for Democrats over the same period. Partisan Divide over Alternative Energy Widens, PEW RESEARCH CTR. (Nov. 10, 2011), http://www.people-press.org/2011/11/10/partisan-divide-over- alternative-energy-widens/?src=prc-headline. 3. PEW CHARITABLE TRUSTS, WHO‘S WINNING THE CLEAN ENERGY RACE? 2013 EDITION 17, 50 (2014). The United States‘ renewable energy installed capacity figure for purposes of the Pew Report excludes hydropower projects over fifty megawatts in size. Id. at 32. 2015] THE OFFSHORE GRID 653 Onshore wind energy has been one of the most successful renewable energy technologies in the United States to date, both in terms of investment and deployment. The U.S. wind industry has grown at an explosive rate since the construction of the world‘s first wind farm in New Hampshire in 1980.4 Fueled by falling capital costs, favorable tax incentives, and state renewable energy mandates, wind energy has quickly spread across geographically diverse regions—the upper Midwest, Texas, and California have emerged as domestic leaders in wind energy deployment. Domestic wind energy installed capacity increased nearly tenfold from 2004 to 2014.5 As of 2015 the United States boasts a total installed wind energy capacity of 65.88 GW, enough electricity to power eighteen million homes.6 Onshore wind energy has even emerged as a viable alternative to fossil fuels when constructing electricity generation facilities. In 2012 despite the boom in domestic natural gas production, wind energy was the largest source of new electric generating capacity for the first time in history.7 In stark contrast to the success of the onshore wind industry, the United States lags far behind the rest of the world in its development of offshore wind power. Instead Europe has taken the lead in this sector—Denmark constructed the world‘s first offshore wind project in 1991, and eight other European nations have since developed operational offshore wind farms.8 The United Kingdom boasts as much offshore wind installed capacity as the rest of the world combined, and it projects that 10 GW of offshore wind energy will supply up to 10 percent of its electricity needs by 2020.9 In contrast, as of 2015 the United States still does not have a single operational offshore wind farm.10 4. Historic Wind Development in New England The Age of PURPA Spawns the ―Wind Farm‖, U.S. DEP‘T OF ENERGY, https://web.archive.org/web/20130820234508/http://www.windpowering america.gov/newengland/history_windfarms.asp (last visited Aug. 28, 2015). 5. AM. WIND ENERGY ASS‘N, U.S. WIND INDUSTRY FOURTH QUARTER 2014 MARKET REPORT 4 (2015), http://awea.files.cms-plus.com/4Q2014%20AWEA%20Market%20Report%20Public%20 Version.pdf. 6. Wind Energy Facts at a Glance, AM. WIND ENERGY ASS‘N, http://www.awea.org/ Resources/Content.aspx?ItemNumber=5059 (last visited Apr. 18, 2015). As of 2015, an additional 12.7 GW of wind energy installed capacity remained under construction. AM. WIND ENERGY ASS‘N, supra note 5, at 3. 7. AM. WIND ENERGY ASS‘N, AWEA U.S. WIND INDUSTRY ANNUAL MARKET REPORT, YEAR ENDING 2012: EXECUTIVE SUMMARY 13 (2013). Wind energy comprised 41.6 percent of total new installed capacity in 2012 while all renewable energy technologies combined accounted for 56 percent. Id. 8. See MICHAEL CONATHAN & RICHARD CAPERTON, CTR. FOR AM. PROGRESS, CLEAN ENERGY FROM AMERICA‘S OCEANS: PERMITTING AND FINANCING CHALLENGES TO THE U.S. OFFSHORE WIND INDUSTRY (2011), http://www.americanprogress.org/issues/green/report/2011/06/01/9720/clean-energy- from-americas-oceans/. China has also built or begun construction on offshore wind farms with an additional 2300 megawatts (MW) of offshore wind energy capacity under construction. See id. 9. See Offshore Wind, RENEWABLEUK, (last visited Aug. 28, 2015), http://www.renewableuk. com/en/renewable-energy/wind-energy/offshore-wind/; see also David Toke, The UK Offshore Wind Power Programme A Sea-Change in UK Energy Policy?, 39 ENERGY POL‘Y 526, 527 (2011). 10. At times it appeared that the Cape Wind project, a proposed 454 MW wind farm off the coast of Cape Cod, Massachusetts, would become the first large-scale offshore wind farm operating in the 654 ECOLOGY LAW QUARTERLY [Vol. 42:651 Failure to keep pace in the development of offshore