The statements and views expressed in the postings on the Ocean & Offshore Energy Projects and Policy Blog are my own and do not reflect those of Nixon Peabody LLP. This Blog does not provide specific legal advice. Reading or visiting this Blog does not create an attorney client relationship. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Wednesday, June 5, 2013

Massachusetts/ Rhode Island Wind Energy Area Lease Auction Slated for July 29 and 31, 2013!

On Tuesday June 4, 2013, the Department of the Interior's Bureau of Ocean Energy Management (BOEM) announced that the first lease auction for commercial offshore wind energy projects will be held on July 29 and July 31, 2013.  The final sale notice was published in the Federal Register on Tuesday June 5, 2013.

The sale will auction an area previously designated by BOEM as the Rhode Island/ Massachusetts Wind Energy Area (MA/RI WEA) located 9.2 nautical miles south of the Rhode Island coastline.  BOEM will divide the area into two lease areas, referred to as the North Lease Area (Lease OCS-A0486) and the South Lease Area (Lease OCS-A0487).  The North Lease Area consists of about 97,500 acres and the South Lease Area covers about 67,250 acres.  The National Renewable Energy Laboratory has stated that the North Lease Area has the potential for installed capacity of 1,955 megawatts (MW), and the South Lease Area has the potential to support 1,440 MW of installed capacity-- together, more than 3 gigawatts of electricity, enough to power more than 1 million homes.  For a map of the MA/RI WEA, click here.  

The North and South Lease Areas will be auctioned simultaneously.  BOEM will consider nonmonetary (i.e., whether a bidder holds a Joint Development Agreement or a Power Purchase Agreement) and monetary (cash bid) factors. The nonmonetary phase of the auction will begin on July 29, 2013, and the monetary phase on July 31, 2013. According to the Notice, the July 29/31 lease auction will be limited to nine bidders who previously responded to a BOEM Request for Interest in the MA/RI WEA and established technical, legal and financial eligibility with BOEM. These bidders include:

In addition to the list of eligible bidders, the notice contains specific information pertaining to the areas available for leasing, lease provisions and conditions, auction details, criteria for evaluating bids, award procedures, lease execution and other information. 

Department of Interior Secretary Sally Jewell, the recently appointed successor to Ken Salazar, indicated that a successful lease sale for the MA/RI WEA would accelerate offshore wind leasing for other designated WEAs along the eastern seaboard of the United States: “If there is good interest in this one, then I think you will have this happening on a consistent basis,” she said.

Although the auction of subsea leases is an encouraging step for U.S. offshore wind developers, Secretary Jewell noted that development of the commercial offshore wind industry is in the hands of the private sector.  “I can’t promise that they will be in production in four years, but we don’t want to be a roadblock,” Jewell said. “The market will dictate, but we certainly don’t want to get in the way.”

BOEM also issued a revised environmental assessment (EA) for commercial wind lease issuance and related activities within the MA/RI WEA.  As a result of the analysis in the revised EA, BOEM issued a Finding of No Significant Impact, which concludes that reasonably foreseeable environmental effects associated with the commercial wind lease issuance and related activities will not impose a significant impact on the environment.  The revised EA and Finding of No Significant Impact are available here

Maine installs first offshore turbine in the US!

This is big news, folks.  The people at the DeepCWind Consortium will officially be the first to place a grid-connected wind turbine in U.S. coastal waters.  As if this wasn't newsworthy enough, the Maine turbine is a floating turbine-- a cutting edge technology that, if proven, could enable construction of offshore wind energy projects in far deeper waters than previous technology has permitted thusfar.   Like I said:  BIG NEWS.

On Friday May 31, 2013, a team comprised of the members of the DeepCWind Consortium, including team leaders from the University of Maine's Advanced Structures and Composites Center supervised the placement of the 65-foot tall turbine into the Penobscot River at Brewer, Maine.  The turbine, known as VolturnUS, is a 1:8 prototype of a proposed 6-megawatt turbine and will ultimately be towed out to a location in Castine Harbor, Maine once river-rise levels permit a safe journey for the turbine.  If the 1:8 prototype proves successful, DeepCWind will construct and deploy two of the 6-megawatt turbines for its proposed Aqua Ventus I project which will be located in state waters off of Maine's Monhegan Island.

The VolturnUS will transmit power directly to the grid via subsea cables.  DeepCWind has stated that the turbine is designed to withstand waves up to 60 feet high and winds up to 150 miles per hour-- that is, the types of conditions that might occur during an Atlantic hurricane.

Floating turbines present enormous opportunities for offshore wind development. Standard offshore turbines are typically installed in waters less than 30-meters deep due to practical limitations associated with the foundations located on the sea floor.  However, floating turbines would enable offshore wind installations to be located in significantly deeper water.  This would allow offshore wind projects to be placed further from shore or in areas such as the U.S. west coast where the ocean floor drops off significantly even close to shore.  The VolturnUS project is one of only a handful of floating turbine projects worldwide which include one by Portugal's Energias de Portugal and Seattle's Principle Power off Portugal and Norway's Statoil North Sea  Hywind turbine which was installed in 2009.

The VolturnUS project has been funded in part by $12 million provided over the past five years by the U.S. Department of Energy.  “Led by the University of Maine, this project represents the first concrete-composite floating platform wind turbine to be deployed in the world – strengthening American leadership in innovative clean energy technologies that diversify the nation’s energy mix with more clean, domestic energy sources,” the DOE said in a press release as the VolturnUS demo turbine went into the Penobscot River on Friday.

The VolturnUS launch event was hosted by Cianbro.  Among the dignitaries on hand for the ceremony were Sen. Susan Collins, Sen. Angus King, Rep. Michael Michaud, Jose Zayas of the U.S. Department of Energy, University of Maine System Chancellor James Page, UMaine Executive Vice President and Provost Susan Hunter, Cianbro CEO Peter Vigue and Dr. Habib Dagher, director of UMaine’s Advanced Structures and Composites Center.

During his preliminary remarks, Dr. Dagher noted that the VolturnUS received its name from a student at the University.  The name breaks down into the descriptive components of "Volt" for electric voltage, "turn" to reflect turbine movement, and "US" to celebrate the first turbine located in U.S. waters. The name VolturnUS also pays homage to Volturnus, the Roman God of the East Wind.

Proponents of deepwater floating turbine projects in Maine hope to support the development of up to 5 gigawatts of power with arrays of up to 80 turbines floating in a 4 by 8-mile area in federal waters approximately 20 nautical miles from the coast by 2030.  DeepCWind has stated that it believes that its  turbine design will be able to produce electricity at 10 cents per kilowatt-hour without subsidies, meeting a 2020 goal of the DOE.

floating wind turbine
A large crane operated by Cianbro transitions VolturnUS into the Penobscot River.