What Happened? 2010 Edition.

2010 has been a big year for offshore wind energy. We have seen regulatory revolutions and revelations, lingering litigations, project progress, legislative luminaries, and capital commitments-- not to mention these annoying alliterations! Here are my top 10 news items for 2010:

1. Salazar Signs Approves Cape Wind and Signs Submerged Land Lease

In April, Interior Secretary Ken Salazar granted federal approval to Cape Wind’s long-suffering offshore wind project slotted for construction in Nantucket Sound off the coast of Massachusetts. In October, Salazar took the stage at AWEA’s Offshore Wind Conference in Atlantic City and signed the first ever submerged land lease for an offshore renewable energy project. As a conference attendee and witness, I admit that I may have teared up—but just a little!

2. Google Invests in Atlantic Wind Connection Backbone Transmission Cable

In October, internet giant and financial juggernaut Google announced its intentions to invest undisclosed, but potentially enormous sums of money to build an undersea cable to connect and transmit energy from offshore wind projects to distribution centers between New Jersey and Virginia. The project, known as the Atlantic Wind Connection, filed a plan with the FERC on December 21.

3. New Jersey Enacts Offshore Wind Economic Development Act
Speaking of transmission and infrastructure, New Jersey enacted legislation that not only calls for the production of at lease 1,100 megawatts of offshore wind generation, but also offers direct financial incentives to businesses that build manufacturing, assemblage, and water access facilities for qualified offshore wind projects. These incentives include tax credits and funding from the New Jersey Economic Development Authority (NJEDA).

4. MMS becomes BOEMRE in the wake of the Gulf Spill; BOEMRE to Handle Offshore Wind Regulation

Following the tragic and unfathomably destructive BP oil spill in the Gulf of Mexico, the Obama administration restructured and renamed the former Mineral Management Services and created the new Bureau of Ocean Energy Management, Regulation and Enforcement. Although some un-named (and snarky) industry insiders have been known to pronounce the new DOI bureau acronym as “bummer”, there is nothing depressing about the new “Smart from the Start” initiative that BOEMRE will be overseeing in the New Year!

5. Salazar Introduces Streamlined Permitting Process: “Smart from the Start”

In response to resounding complaints from project developers, financiers, and just about everyone else with an interest in offshore renewables, DOI Secretary Salazar announced a revised permitting process designed to eliminate regulatory redundancies and “needless red tape.” The new program, which Secretary Salazar's office has titled "Smart from the Start", and which began with BOEMRE’s immediate identification of several designated Wind Energy Areas in November, hopes to diminish the length of the permitting process by two to five years.

6. Deepwater Wind Announces a 1,000 MW Project for the Rhode Island Sound

In early December, Deepwater Wind announced that it has revised its original plan for a 100 turbine, 350 megawatt wind farm and has instead submitted plans for federal approval for a 1,000 megawatt wind farm in the Rhode Island Sound. The plan also includes a transmission line that would distribute electricity produced by the project to distribution centers between Massachusetts and New York.

7. 1603 Renewable Energy Tax Credit Extended for Another Year

In late December, Congress passed a one-year extension of the 1603 renewable energy investment tax credit as part of a multi-billion dollar tax cut package. The tax credit could provide a financial boost to offshore wind projects if construction begins before December 31, 2012.

8. Various Utility Commissions Reject, Approve, Reconsider and Litigate Various PPA Agreements for Proposed Projects

In March, the Rhode Island Public Utilities Commission rejected a power purchase agreement for Deepwater Wind’s Block Island project (starting at 24.4 cents per kilowatt hour) as “commercially unreasonable.” Rhode Island legislators then directed the commission to reconsider and the contract was approved. The PPA has been challenged yet again though, and the RI Supreme Court is expected to address the issue in 2011.

Likewise, the Massachusetts Department of Public Utilities approved National Grid’s PPA with Cape Wind. This PPA has also been challenged.

9. Maine Takes The Lead In Deep Water Floating Turbine Technology

Following a 2009 DOE Grant, Dr. Habib Dagher and his team at the University of Maine Advanced Structures & Composite Center have taken the lead in the U.S. market with regard to developing floating turbines designed for deep water wind farms. Maine has identified and approved three test areas in state waters where the team plans to test its floating turbines.

10. Steelworkers Union Files Trade Case Against China

In early September, the Steelworkers Union filed a 5,800 page petition with the office of the US Trade Representative to the WTO alleging that China has made unfair use of billions of doallars of subsidies, and has instituted performance requirements preferential practices and other "trade-illegal activities to advance its domination of the [renewable energy] sector." The focus of the USW's latest petition is the export to the US of Chinese-made equipment for alternative energy projects like land based and offshore wind turbines and solar-energy projects. The Union's petition identifies five major areas of "protectionist and predatory practices used by the Chinese to develop their green sector at the expense of production and job creation here in the US." These five areas include:

a. Restrictions of access to critical materials;

b. Prohibited subsidies contingent on export performance or domestic content;

c. Discrimination against imported goods and foreign firms;

d. Technology transfer requirements for foreign investors; and,

e. Trade-distorting domestic subsidies.

On Oct. 15, the U.S. Trade Representative announced its intention to proceed with further investigation of the case. On December 22, the US Trade Representative announced that it will be seeking World Trade Organziation dispute resolution with regard to China’s Subsidies for Wind Power Equipment Manufacturers.

Largest U.S. Offshore Wind Farm Proposed for Rhode Island

Rhode Island-based offshore wind developer Deepwater Wind submitted an application to the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) to build the largest offshore wind project in the United States: a 200 turbine, 1,000-megawatt offshore wind project in Rhode Island Sound. The project, called the Deepwater Wind Energy Center, also includes a proposal for an undersea transmission network designed to stretch from Massachusetts to New York. The turbines and installation would cost an estimated $4.5 billion to $5 billion, and the transmission system will cost an additional $500 million to $1 billion.

If approved, the Deepwater Wind Energy Center will be installed in four phases, with construction starting in 2014. The first 50-turbine phase will go on line in 2015 with additional construction phases to follow.

The Deepwater Wind Energy Center proposal replaces Deepwater Wind’s 2008 proposal to construct a 350-megawatt, 100-turbine project. Deepwater Wind reports that the aggressive new proposal was motivated by technological innovations that increase energy generation potential while diminishing costs, as well as DOI’s recently announced "Smart from the Start” regulatory initiative.

Diminished timelines for regulatory approvals may help to overcome investor reluctance. Regulators previously predicted time frames of 7 to 9 years before an offshore wind project could be brought online. Investors typically shy away from projects with start-up timelines longer than (at the most) 5-6 years. Deepwater Wind, along with most U.S. offshore wind developers, has lauded the proposed revisions to the regulatory process under the Smart from the Start program which among other things, promises expedite permitting for qualifying offshore renewable energy projects and may enable regulators to issue the first submerged land leases to developers by late 2011 or early 2012. See also here.


In addition, technological improvements to wind turbines have the potential to materially impact economy of scale analysis of offshore wind projects and make larger projects far more cost-effective. Here, Deepwater’s 200-turbine plan will produce more than triple the energy wattage than the 100-turbine plan. This is in part due to innovations in turbine design. While most existing European and Asian offshore wind installations have used 3 to 3.6 megawatt turbines, manufacturers (including Areva Renewables and REpower Systems) have now made 5 and 6-megawatt turbines available.

Using larger turbines improves the economies of scale for developers like Deepwater Wind and can translate into better pricing for rate-payers. Deepwater Wind CEO Bill Moore has predicted that the 200-turbine project will be more cost-effective than Deepwater’s much smaller Block Island wind farm (turbines, wattage) and could reduce prices a third lower than the 24.4 cents/kWh rate set under Deepwater Wind’s Block Island project power purchase agreement with National Grid. “This ‘second generation’ of offshore wind farms will be larger and farther from shore, and will produce lower priced power, using more advanced technology than the offshore projects announced to date. We expect the offshore wind industry in the United States to follow the European experience, where a more mature industry is building larger projects farther from shore,” Moore said in a press release.

Provided the project obtains a myriad of state and federal regulatory approvals, the Deepwater Wind Energy Center will be located in a 270 square-mile area between Rhode Island and Massachusetts in federal waters directly south of Sakonnet Point between Block Island to the west and Martha’s Vineyard to the northeast. This area is subject to a Memorandum of Understanding between the states of Massachusetts and Rhode Island, and is referred to as the “area of mutual interest.” The proposed project area is consistent with Rhode Island’s recently issued and approved Special Area Management Plan (SAMP)—essentially, an ocean-zoning plan designed to identify and protect fishing grounds, shipping lanes and glacial rock formations. Deepwater Wind submitted an application for a submerged land lease on the area of mutual interest in October 2010.

The multi-state transmission network, known as the New England-Long Island Interconnector (NELI) will extend from Massachusetts to New York and would enable Deepwater Wind to sell power to any of the states located along the seaboard where the network will be located including Connecticut, Massachusetts, New York and Rhode Island. The ability to distribute and sell energy to multiple states ensures that Deepwater will be able to sell all of the power produced by its project and also ensures that the investment cost of construction that is factored into power rates will not fall on ratepayers in Rhode Island alone.

As of this writing, it is not clear whether the NELI transmission system will ultimately interconnect with the planned Atlantic Wind Connection subsea transmission system which is planned to extend from New Jersey south to Virginia.

DOI and BOEMRE Announce 'Smart from the Start' Program Revisions to BOEMRE's 2009 Regulations

At 2pm EST, Secretary of the Department of Interior Ken Salazar announced the launch of a new offshore wind energy initiative for the Atlantic Outer Continental Shelf entitled ‘Smart from the Start’. Sec. Salazar explained that the new program will facilitate siting, leasing and construction of new projects to encourage the efficient (but prudent) development of offshore renewable resources. In summary, the 'Smart from the Start' program comprises two tracks of revised provisions to BOEMRE's May 2009 regulations. The first track concerns the leasing process, and the second track pertains to transmission system development.

The new program, which promises to significantly shorten the time projected to obtain a subsea lease under the current regulations (7-10 years), intends to simplify the leasing process for offshore wind projects where there is only one qualified and interested developer. The revised regulations call for BOEMRE to identify Wind Energy Areas ("WEAs")-- that is, offshore locations that appear most suitable for offshore wind energy projects-- off the coasts of a number of Atlantic states including Maryland, Delaware, New Jersey, Virginia, Rhode Island, and Massachusetts within the next 60 days.

By January 2011, Requests for Interest and Calls for Information ("RFI"s) will be issued for the initial WEAs to support environmental assessments for project based leases. An RFI has already been issued for coastal areas off of Maryland, and RFIs are currently in development for New Jersey, Virginia, Rhode Island, and Massachusetts.

Also in January 2011, BOEMRE will initiate and coordinate Environmental Assessments ("EA") pursuant to the National Environmental Policy Act ("NEPA") at the identified WEAs to evaluate potential impacts associated with site assessment activities. As part of the EA process, the revised regulations also require BOEMRE and DOI to coordinate closely with other federal agencies to compile existing site assessment data. If the EAs reveal a Finding of No Significant Impact ("FONSI"), BOEMRE could extend leases to prospective developers for the WEAs by the end of 2011/early 2012. Developers will still need appropriate and comprehensive site-specific NEPA review of individual projects.

Later in 2011, BOEMRE will work to identify additional WEAs in other Atlantic States, possibly including New York, Maine, North Carolina, South Carolina, and Georgia.

On the transmission side, the 'Smart from the Start' program requires BOEMRE to move aggressively to process applications to build offshore transmission lines. The identification of wind energy areas should assist the siting and feasibility reviews associated with potential offshore transmission lines.

The Department of the Interior posted a press release quoting statements made by the Secretary and the Director of BOEMRE at today's announcement:

“The Cape Wind lease is an historic milestone in America’s renewable energy future, but to fully harness the economic and energy benefits of our nation’s vast Atlantic wind potential we need to implement a smart permitting process that is efficient, thorough, and unburdened by needless red tape,” said Secretary of the Interior Ken Salazar.

“Our ‘Smart from the Start’ Initiative for Atlantic wind will allow us to identify priority Wind Energy Areas for potential development, improve our coordination with local, state, and federal partners, and accelerate the leasing process,” Salazar noted. “If we are wise with our planning, we can help build a robust and environmentally responsible offshore renewable energy program that creates jobs here at home.”

“This coordinated initiative will help to capture the great potential that offshore wind power offers our country and our economy,” said Deputy Secretary David J. Hayes. “Smart planning and early environmental reviews will pay great dividends in spurring responsible renewable wind energy development.”

“This accelerated and focused approach to developing the nation’s Atlantic wind resources will encourage investment while ensuring projects are built in the right way and in the right places,” said Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich.

“We believe the regulatory change we are proposing, along with our efforts to identify priority Wind Energy Areas offshore, will result in a more efficient and coordinated permitting process for offshore wind,” said Bromwich.

DOI posted a factsheet on the Smart from the Start program HERE and a factsheet on the Direct Final Rule HERE.

Big News Day for Offshore Wind: Cape Wind and Major Federal Announcement!

Stay Tuned for a Major Federal Announcement Regarding Offshore Wind Regulation and Permitting!!

US Department of the Interior ("DOI") Secretary Ken Salazar is slated to announce “a major new initiative to accelerate the responsible siting and development of wind energy projects along the Atlantic coast” at 2pm today at the Ft. McHenry National Monument in Baltimore, Maryland. Although the DOI and the Bureau of Ocean Energy Management ("BOEMRE") have not released official details on the substance of the announcement, there is speculation that the DOI will be authorizing a new, more streamlined permitting process for offshore wind and hydrokinetic energy projects that could eliminate some of the duplicative requirements that are presently mandated.

Deputy Interior Secretary David Hayes, Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael Bromwich, Delaware Senator Tom Carper, Maryland Gov. Martin O’Malley and Jim Lanard, president of the Offshore Wind Development Coalition are also expected to be in attendance during the announcement today.

Check back here after the announcement for more specifics!


More Progress for Cape Wind!

On Monday November 22, 2010, the Massachusetts Department of Public Utilities announced that it has issued a final approval for the 15-year Power Purchase Agreement ("PPA") between National Grid and Cape Wind. This approval signifies another hard-won victory for the proposed Cape Wind offshore wind project.

Under the PPA, National Grid, one of the main electricity providers in Massachusetts, will purchase 50 percent of the power generated by the Cape Wind project. The Massachusetts Department of Public Utilities has approved rates starting at 18.7 cents per kilowatt hour beginning in 2013, with a planned gradual increase of 3.5% to be introduced over the next 15 years. This will results in an average increase of one to two percent for most consumers' electric bills.

In its press release, Massachusetts Department of Public Utilities Massachusetts Department of Public Utilities chair Ann Berwick stated: "It is abundantly clear that the Cape Wind facility offers significant benefits that are not currently available from any other renewable resource. These benefits outweigh the costs of the project."

The Cape Wind Offshore Wind project, which will involve the installation of 130 wind turbines in the waters of Nantucket Sound, still must obtain additional federal permits from the U.S. Army Corps of Engineers, as well as from the U.S. Environmental Protection Agency before construction can begin.

DOE, BOEMRE & NOAA Award $5 Million in Grants to 8 Ocean Renewable Energy Research Projects

On October 26, 2010, The Department of Energy (DOE), Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), and the Department of Commerce's National Oceanic and Atmospheric Administration (NOAA) announced their joint decision to award nearly $5 million to eight research projects designed to support offshore wind energy facilities and wave, tidal, and currents and thermal gradient energy projects.

The projects were selected following a competitive joint funding process (a "Broad Agency Announcement") and were chosen as part of the Obama administrations' newly created National Ocean Council which was established on July 19, 2010.

The awards were granted to the following projects**:

(1) Parametrix (Auburn, Washington): Bayesian Integration for Marine Spatial Planning and Renewable Energy Siting

This research seeks to apply advanced probabilistic statistical methods to integrate oceanographic, ecological, human use data, stakeholder input, and cumulative impacts for the purpose of evaluating ocean renewable energy siting proposals.
Approximate award amount: $499,000 (over two years); Funding agencies: BOEMRE, DOE, NOAA

(2) Cornell Lab of Ornithology (Ithaca, NY): Characterization & Potential Impacts of Noise Producing Construction & Operation Activities on the Outer Continental Shelf

This 3 year project, expedited through the Cornell Ornithology Lab's Bioacoustics Research Program, will measure, characterize and evaluate the influences of construction and operation noises from construction and operation and maintenance of offshore renewable energy projects on resident and migratory marine vertebrates. Approximate award amount: $499,000 (over three years); Funding agencies: BOEMRE, NOAA

(3) University of Rhode Island (Kingston, RI): Development of Environmental Protocols and Modeling Tools to Support Ocean Renewable Energy and Stewardship

This project intends to develop and test standardized protocols for baseline studies and monitoring of environmental impacts associated with offshore renewable energy projects. Specifically, the URI researchers hope to craft a consistent and reliable (yet flexible) process for conducting environmental impact evaluations for offshore renewable energy projects. The project will be conducted as part of Rhode Island's ongoing effort to develop a comprehensive Special Area Management Plan ("SAMP"). Approximate award amount: $745,000 (over two years); Funding agencies: BOEMRE, DOE, NOAA

(4) University of Washington School of Aquatic and Fishery Sciences (Seattle, WA): Evaluating Acoustic Technologies to Monitor Aquatic Organisms at Renewable Sites

This two year research project will evaluate the ability of three classes of active acoustic technologies (echo sounders, multibeam sonar, and acoustic camera) to characterize and monitor animal densities and distributions at a proposed hydrokinetic site, the Snohomish Public Utility District's tidal energy demonstration project. Approximate award amount: $746,000 (over two years); Funding agencies: DOE, BOEMRE, NOAA

(5) Pacific Energy Ventures (Portland, OR): Protocols for Baseline Studies and Monitoring for Ocean Renewable Energy

This two year project will attempt to develop a consistent evaluational and monitoring protocol for considering the environmental impact of offshore renewable projects. The protocol will be consistent with related European programs. Although PEV plans to develop their protocol specifically around west coast marine resources, they hope to create a tool that can be used in other regions and marine ecosystems. Approximate award amount: $499,000 (over two years); Funding agencies: BOEMRE, DOE, NOAA

(6) University of Arkansas Center for Advanced Spatial Technologies (Fayetteville, AR): Renewable Energy Visual Evaluations

This research project is designed to develop a "Visual Impact Evaluation System" for Offshore Renewable Energy. The proposed system will allow a user to design the spatial layout and content of an offshore facility, import and prepare geospatial data that will affect visibility, run a series of sophisticated visual analyses, define atmospheric, lighting and wave conditions and, finally generate one or a series of realistic visualizations from multiple viewpoints. The system will also accept three-dimensional computer models of facilities submitted by project applicants or available from third parties, and will include pre-built models of many facilities. Output during the two year project will be in the form of maps, tabular reports and high-quality rendered images. Approximate award amount: $497,000 (over three years); Funding agency: BOEMRE

(7) University of Texas Bureau of Economic Geology (Austin, TX): Sub-Seabed Geologic Carbon Dioxide Sequestration Best Management Practices

This research project will employ existing knowledge and experience with onshore carbon sequestration monitoring and risk assessment, existing and proposed policy (both domestic and international), and international collaboration with groups already conducting offshore carbon dioxide transport and sequestration to compile information needed to establish best management practices for U.S. offshore geologic sequestration. Approximate award amount: $497,000 (over three years); Funding agency: BOEMRE

(8) University of Massachusetts Marine Renewable Energy Center (Dartmouth, MA): Technology Roadmap for Cost Effective, Spatial Resource Assessments for Offshore Renewable Energy

This research project will develop a technology roadmap, using primarily existing data, for the application of advanced spatial survey technologies, such as buoy-based LIDAR, to the assessment and post-development monitoring of offshore wind and hydrokinetic renewable energy resources and facilities. Once the roadmap has been completed, researchers will perform field tests to assess its viability. Approximate award amount: $748,000 (over two years); Funding agencies: BOEMRE, DOE

** These research project descriptions are paraphrased from a DOE press release issued on October 26, 2010.

Google Invests in Offshore Wind Transmission Cable: Boon or Bane?

This morning, Google and Good Energies (a New York based financial firm) announced that they inked a deal to provide 37.5% of the equity investment costs for a proposed $5 billion backbone transmission line, which is being called the "Atlantic Wind Connection" ("AWC"), and which will be used to link future offshore wind farms along the Atlantic Seaboard. Google and Good Energies join Marubeni, a Japanese trading company which has committed to a 10% stake in the project.

The project developer, Trans-Elect, describes the project as a 350-mile underwater spine that will run bi-directionally up and down the Atlantic coastline from Virginia to Maine. As has been discussed in a prior post, the AWC has been touted to resolve certain inherent problems with offshore wind generation, including the proverbial elephant in the room: intermittency. Trans-Elect says it hopes to begin construction in 2013.

Several media sources have reported that U.S. Government officials have indicated cautious optimism about the AWC project: “Conceptually it looks to me to be one of the most interesting transmission projects that I’ve ever seen walk through the door...It provides a gathering point for offshore wind for multiple projects up and down the coast.” (See here). Notably, Secretary of the Department of the Interior specifically referenced the AWC during his keynote speech at the AWEA Offshore Wind Conference last week.

There are some questions regarding the economic impact that will result from a transmission system that essentially negates the individual utility of each individual offshore wind installation. In the present regulatory environment, the end-user prices for electricity are set by state regulators and therefore, vary from state to state. Therefore, electrons generated from a facility in State A will garner a different price if they are deployed to State A or to State B. The Regional Transmission Operator ("RTO") makes the decision where a facility's electrons will be deployed based on grid conditions (i.e., where electricity is needed based on demand), not on pricing. This means that offshore wind generators must account both for the uncertainty resulting from intermittency, as well as uncertainties arising from where the RTO will direct their electrons.

This much uncertainty doesn`t bode well with investors. Unless there is some unifying policy or legislation to standardize end-user prices (or the utilities' sales price) for electrons generated by state based offshore wind installations, there is insufficient revenue predictability to assure debt investment in offshore wind. Insufficient debt financing can lead to a disproportionate cost burden being levied on state residents who may or may not reap the benefit of these costs. Without some tangible and guaranteed financial benefits, why would any state utility board or other authority support state financing (via mechanisms such as New Jersey's Offshore Wind Economic Development Act) of offshore wind projects? And without state support, most projects just can`t make the numbers work.

One way to resolve pricing variances between the states would be to implement some sort of unifying federal policy, regulation or legislation. Alternatively (and perhaps in light of agreements such as the Atlantic Offshore Wind Energy Consortium, more practically), states could enter into regional cooperative agreements to conform end-user and/or utility pricing as an incentive for renewable energy projects facing intermittency and high upfront development costs. However, adding new regulatory challenges to an already hyper-regulated industry seems like an inefficient way to get offshore wind farms built in our lifetimes.

Moreover, none of the above seems to jibe well with the law of Occam's razor-- there are just too many decision makers and moving parts. So what would be the alternative to a bi-directional backbone transmission project and what are some of the potential benefits thereto?

Local transmission lines only would omit the need for state and regional regulation/policy considerations to some extent. In addition, shorter transmission lines are less expensive transmission lines. But that leaves that intermittency elephant standing smack in the middle of the room.

This brings us to the holy grail of renewable energy: energy storage. If the benefit of offshore wind energy (for the Atlantic Seaboard) is demand center proximity, there is no economic benefit to extending transmission lines beyond the nearest shore-based substation. Notwithstanding that a viable accumulator technology has not yet been developed, I would be willing to bet that energy reservoirs would be at least as effective (if not more effective) at managing intermittency than a backbone subsea cable.

In sum, the backbone cable offers some solutions, but may create some difficult economic hurdles without significant policy and regulatory attention. Alternatively, local transmission options avoid some of the economic issues, but will not be able to truly resolve intermittency issues (which are themselves economic issues) until energy storage technology radically improves. In my humble view, neither option presents an ideal approach. What do you think?

Secretary Salazar and Cape Wind Sign First Commercial Lease

Following his keynote speech this morning at the third annual American Wind Energy Association ("AWEA") Offshore Wind Conference in Atlantic City, New Jersey, DOI Secretary Salazar was joined onstage by Cape Wind President Jim Gordon and AWEA President Denise Bode to sign a commercial lease for submerged federal lands.

The lease, which grants Cape Wind the right to develop submerged lands in the Outer Continental Shelf off the coast of Nantucket, MA, is the first of its kind, and has been over 8 years in the making. Cape Wind expects to install 140 turbines in Nantucket Sound. The maximum capacity of the Cape Wind installation is 462 mW, with a expected output of 180mW. Cape Wind will generate enough electricity to power about 200,000 homes.

As a large crowd of AWEA conference attendees looked on, Salazar and Gordon prepared to sign the lease. Gordon, who has been the President and primary financial stakeholder in Cape Wind since its inception in 2002, was clearly eager to sign the lease. Salazar asked Gordon to offer a few remarks before signing the document, joking that Gordon's eagerness was comparable to "waiting 8 years to marry someone." Gordon then thanked the Secretary and the administration for personally engaging with him and Cape Wind to see the project towards fruition. Gordon noted that Salazar was a particular champion of offshore wind projects and that due to his personal commitment and determination, necessary deadlines and clear regulatory processes were finally being issued and implemented at state and federal levels. Gordon highlighted that the effect of this lease and of the leases to come for other offshore wind projects will have the effect of ensuring a boundless supply of clean, efficient, and cost effective energy for our future.

Salazar and Gordon recieved a standing ovation from the conference attendees after the lease was signed.

Secretary Salazar's keynote speech was a paean to the Obama administration's efforts to invest time, money, and sweat equity in the success of the United States' renewable energy industry-- with an especial focus on offshore wind development. The Secretary noted that he had just issued an approval for two large scale solar installations (also the first of their kind) on federal lands located in California.

With regard to the nascent offshore wind industry, Secretary Salazar stated that it is important for developers and industry stakeholders to be "smart from the start." Secretary Salazar identified five areas where smart development is essential:

(1) Governmental coordination: Secretary Salazar commended the support of DOE's Secretary Chu as well as the success of interstate cooperative initiatives such as the Atlantic Governor's Consortium as well as state specific initiatives.

(2) Site Identification: The Secretary stated that BOEMRE will have completed its analysis and identification of high priority sites for offshore wind development by the end of 2010.

(3) Streamlining the Permitting Process: The Secretary acknowledged that the present BOEMRE permitting and leasing scheme is not a final polished process and that developers and stakeholders should view the regulations issued in May 2009 as a baseline framework. The Secretary encouraged the audience members to recommend concrete suggestions to streamline the regulatory process in order to speed project development and encourage financial investment in offshore wind. Specifically, Secretary Salazar noted that he expects the regulatory process to become significantly less cumbersome as more and more information about topics such as metocean planning, bathymetry, and ornithological and ichthyological studies are completed. The Secretary recognized that many of the studies and submissions require applicants to perform tasks duplicatively-- even just at the federal level. Accordingly, the next iteration of the regulatory process needs to be more efficient.

(4) Transmission: The Secretary indicated that DOI is seriously reviewing the construction of a transmission "backbone" that would connect offshore projects up and down the eastern seaboard to one another and to the existing grid. Notably, the "backbone" transmission proposal is one of the most promising solutions for intermittency issues inherent in offshore wind power generation.

(5) Investment: The Secretary acknowledged that without investor support, there will be no industry-- and that without a clear, predictable, and coordinated permitting process, investors are unable to ensure a return on their investment within any reasonable period of time. Accordingly, the Secretary recognized that the current estimated timeline to proceed through the regulatory process -- 7-9 years-- is simply unacceptable.