Energy Policy and Delaware
When the recession hit, Firestone said, people began to conserve more energy and therefore the value of the renewable energy credits fell. Bluewater could no longer bank on selling renewable energy credits to other power companies for a set price. The price fell and so did the number of credits a power company was required to carry, he said.
Advocates for such renewable, carbon-free sources of electricity are in full defense mode, as recession-battered consumers blanch at the modest added costs required to shift to cleaner power and resurgent Republicans rail against government subsidies or carbon-control programs that might add costs for businesses and "kill jobs."
They are seen as the state-backed boost that solar and wind energy need to compete with power generated from fossil fuels in the coming decade.
Trouble is, they may be the next target for Delaware tea party activists, who see them as wasteful government intervention into the free market system that just end up costing consumers more for electricity.
They're renewable energy credits, or RECs.
At least six more summers are likely to pass before a Bluewater wind turbine produces any power, and the same is true for more than a dozen sites from North Carolina to New Jersey to Maine.
Offshore wind's once impressive momentum has been stalled by a powerful shift in economic, social and political currents, all casting a harsh light on the industry's weakest link -- the high cost.
The government's action turns Delaware into the test case for new federal rules and regulations, said Tyler Tringas, wind energy analyst for Bloomberg New Energy Finance. The contract with Delmarva Power "puts them leaps and bounds ahead of the rest of the projects," Tringas said.
"It makes sense for the MMS to say we're going to test this out with Bluewater," Tringas said. The ocean lease application is expected to be published in the Federal Register on Friday.
Detractors of offshore wind power have long pointed out that the wind doesn't always blow very hard, even over the high seas, which makes it a somewhat undependable way to keep the lights on.
But a team of University of Delaware researchers say they've quantified a way to make that less of a problem -- and reduce the need to develop costly backup power plants on land or dip into the expensive peak-period electricity market when winds are limp.
Speaking to a wind industry trade group Thursday, Gov. Jack Markell urged federal agencies to speed the permitting of offshore wind farms so construction can begin on schedule.
But one federal official key to the permitting process said there's value to being more methodical.
With plans moving forward in New Jersey and Delaware - not to mention recent progress in Cape Wind's years-long fight in Massachusetts - it's far from certain that Deepwater and Rhode Island will succeed in their quest to be first.
And make no mistake, being first is important. For the developer, it means more than just bragging rights. It gives the company a leg up on its competitors as it tries to develop additional wind farms elsewhere.
For the state, it means much-needed economic development and valuable green-collar jobs.
In new federal permitting rules published last month, the U.S. Department of the Interior said offshore wind farm operators will need to pay 2 percent of revenues as a royalty to the federal government.
That 2 percent is calculated using a formula that relies largely on the wholesale price of electricity.
Gov. Jack Markell wants to end a decades-long practice of viewing energy costs exclusively in terms of dollars and cents, and start considering the long-range impact on public health and the environment.
As part of the broader vision, Markell says he'll keep a close eye on Delmarva Power's long-range energy plan, a state required roadmap that is coming before the Public Service Commission. The 10-year plan will help map how the utility buys electricity, and whether it will come from sources near or far.
The Public Service Commission has approved land-based wind contracts between Delmarva Power and two developers after a meeting in Dover that lasted about five hours.
Commissioners voted unanimously to approve a 20-year deal between Delmarva and Synergics for a maximum of 100 megawatts of wind power from two wind farms in western Maryland.
Commissioners also voted unanimously to approve a 15-year deal with AES for a wind farm in north-central Pennsylvania that would produce up to 70 megawatts.
[O]ffshore wind power is all blue skies and clear sailing now that Delaware, Texas and Massachusetts have approved projects. New Jersey and Rhode Island are also evaluating offshore wind ventures, while utilities and developers in Georgia, Florida and California are researching technologies and site data.
This week focused on two reality checks: A still-evolving regulatory scheme adapted from federal offshore oil and gas drilling overlaps state environmental and economic controls, posing a coordination challenge. ...As important, electric transmission connections and capacity are imperative to move power to utilities inland, and balance supply and demand.
Visitors to Rehoboth Beach, Del., soon may be greeted by more than sand dunes, seagulls and beach umbrellas. If offshore wind advocates have their way, scores of 140-foot blades will be spinning in the ocean breeze nearly a dozen miles away, barely visible to the sunbathers.
Offshore wind has taken a back seat to offshore drilling for oil and natural gas in the current energy debate.
Onshore wind contracts to purchase energy for Delmarva Power's standard-offer service customers could be given the nod of approval by early October. Wind-power watchers are awaiting the Sept. 17 publication of the Public Service Commission staff report on the contracts. ...Delmarva Power has asked the Public Service Commission (PSC) for an expedited review of three onshore wind contracts, to ensure the power company can include the contracts in its renewable energy portfolio by 2009.
A Delmarva Power consultant estimates that three land-based wind contracts will cost residential customers the equivalent of 24 cents more a month over the life of the contracts.
The estimate was part of a package of financial information Delmarva has submitted to the Public Service Commission, which will consider approval of the company's land-based wind power contracts in the coming months.
Lori Neuman, NRG Energy spokeswoman, said because wind is an intermittent resource, NRG Energy will seek permission for a back-up resource, such as a natural-gas-fueled plant.
Bluewater Wind's planned offshore wind farm now has state approval and is on its way to securing required permits. But, the approved contract requires Delmarva Power to purchase significantly less power from the wind farm than previously planned.
The final blessing by the agencies on a compromise power purchase contract between Bluewater Wind and Delmarva Power came in the House Chambers at Legislative Hall, allowing Bluewater to begin the permitting phase for a 200-megawatt farm off the coast of Rehoboth Beach.
At the same time, the agencies agreed that the debate over whether to mandate construction of a backup natural gas plant in Sussex County would be handled by the Public Service Commission, which regulates Delmarva Power, thus excusing the other three agencies from a role.
One of the most anticipated political votes of the year unfolded as a friendly formality Thursday, as four state agencies unanimously ratified a contract to build what may be the nation's first offshore wind farm. ...At the same time, the agencies agreed that the debate over whether to mandate construction of a backup natural gas plant in Sussex County would be handled by the Public Service Commission, which regulates Delmarva Power, thus excusing the other three agencies from a role. The backup plant was intended to provide a reliable local power source for times when the wind is not blowing as hard.
State officials on Thursday approved an agreement between Delmarva Power and a wind farm developer that could lead to the nation's first offshore wind farm off the Delaware coast.
The agreement between Delmarva Power and Bluewater Wind LLC was unanimously approved by the Public Service Commission and representatives of three other state agencies.
The agreement, which follows months of conflict and negotiations between the two companies, calls for Delmarva to buy up to 200 megawatts of power annually for 25 years from a wind farm about 12 miles off Rehoboth Beach.