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What the Big Atlantic Backbone Transmission Buy-In Means for U.S. Offshore Wind


The U.S. wind industry is finally getting into the offshore game, and a new consortium of investors led by the Google Foundation just gave it a boost.

“We’re close to the take-off point,” said Jim Lanard, the Offshore Wind Development Coalition President, and “there will be a need for efficiencies in interconnection and transmission.”

Lanard was describing what the new multi-billion dollar investment in an Atlantic coast transmission backbone means for a U.S. offshore wind industry just being born, decades behind Europe’s and years behind China’s.

“In the offshore wind industry, the individual developers do not consider themselves one-off project teams,” said Lanard, who was an offshore wind developer before work with the American Wind Energy Association (AWEA) led him to the role of chief advocate for the offshore wind industry.

“They’re not thinking they’re going to build one project and retire,” Lanard said. They see each project as “the first of many. As the technology evolves, the turbines get larger, installing them gets cheaper, perhaps they go further offshore and eventually they become floating foundations,” he explained, “a transmission backbone is going to be essential.”

Lanard came back to the recent headlines. “What Google has done is jump-start that part of the future for offshore wind here in the United States.”

A recent Oceana study found that wind off the Atlantic Coast could supply nearly half the Eastern seaboard’s electricity needs. Other studies say there is even more potential. “Unlike Europe, where offshore wind has been operating since 1991,” Lanard said, “the United States offshore industry has yet to put its first steel in the ground.” But, he said, “The day for the first offshore wind farms is quickly approaching. There is still a lot of work to do but we’re going to see a robust industry.”

Google, renewable energy investor Good Energies and Japanese industrial power Marubeni Corporation are partners in the Atlantic Wind Connection (AWC) high voltage direct current (HVDC) offshore wind transmission backbone plan to be constructed by transmission specialist Trans-Elect Development Company. The project will have a 6,000-megawatt carrying capacity. Development of Atlantic Coast offshore wind, according to the AWC website, could create 215,000 new jobs by 2030.

Though offshore developers welcome the investment, it is only a small part of what the industry will eventually represent. And the AWC project, Lanard said, is also unlikely to be pivotal in offshore wind’s early growth. That will begin with small-scale projects in state-controlled waters less than three miles offshore “that could see construction begin in the 2012-2013 time frame.”

Cape Wind, the controversial Nantucket Sound project, was just awarded the first lease for offshore wind development in federal waters. “It will take a number of years to be developed, but they’re making great progress,” Lanard said. Cape Wind hopes to be generating electricity by 2016.

None of those projects or the ones that immediately follow need the AWC.

“The first generation of utility-scale projects in federal waters,” Lanard went on, “are planning to develop their own transmission interconnects,” he said. “When a developer is investing $1.5 billion to $2 billion for a utility-scale project, it must have an absolute guarantee that there is a system to get that power to market.” With that kind of investment at stake, developers will not leave interconnection to an untested consortium.

“We are very excited that Google and Good Energies and Marubeni have invested in Trans-Elect” and are “entering the offshore wind industry,” Lanard said. “If the Google investment in the Atlantic Wind Connection could somehow get far enough ahead of the developers’ projects that it could demonstrate a cost-effective result, then the wind developers might be willing to consider that interconnect. But the risk would have to be completely managed.”

On the other hand, “If during this process, permitting takes longer, raising the financing -- which is $1.8 billion to $5 billion -- takes longer, or if it takes longer to build because of engineering challenges that haven’t been identified yet,” Lanard explained, and it turns out AWC is not available, “developers’ assets would be stranded and that would make for a terrible outcome.”

Lanard said offshore wind developers see AWC “as a shot in the arm to this industry that has been working for years” to begin what Europe began two decades ago. Developers expect the AWC investment to motivate the federal government to streamline the problematic permitting process that remains one of three challenges presently facing offshore wind.

The second is “we need to create economic development opportunities and we need to create jobs that will create environmental benefits,” Lanard said, “so that if ratepayers are asked to pay somewhat more for their power in these early projects,” they will see “offsetting benefits.”

The third challenge is that “there need to be signals from the federal government and the state governments to give comfort to the manufacturers and the supply chain industry so that they are ready to set up shop” because, Lanard said, “this is not only a race to get the steel in the ground, it’s a race to get manufacturing up and running.”

The announcement of the AWC has buoyed Lanard’s optimism. “I know the people that are proposing and developing the Trans-Elect pipeline. Our group has met with them twice since the announcement and we’re going to continue to talk with them and work with them. Together we’ll be more effective than if we work separately.”


Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
eschwerin@rosemontseneca.com
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