The Maryland Public Service Commission has awarded offshore wind renewable energy credits (ORECs) to two projects
Total cost of the two projects is about $2 billion (See breakdown below)
The decision would allow U.S. Wind, Inc. and Skipjack Offshore Energy, LLC to construct 368 megawatts of capacity.
The US Wind project would connect to a substation at Indian River Inlet in Delaware with Skipjack connected to the grid in Ocean City. The US Wind farm takes in a large area that extends north toward Delaware.
Skipjack claims its project is a good fit for the area, due to its location further off the coast and cost-effective construction that would lead to lower electricity costs. Residents have been concerned about seeing the turbines from the beach.
The proposed projects come after the shelved Bluewater Wind project off the Delaware Coast. The project fell victim to a slow economic recovery and nervous credit markets.
There has also been concerns about the added costs of wind generation in a region with high electricity costs.
“The approval today of the nation’s first large-scale offshore wind projects brings to fruition the General Assembly’s efforts to establish Maryland as a regional hub for this burgeoning industry,” said W. Kevin Hughes, the commission chairman. “We have taken great care to ensure that this decision maximizes economic and environmental benefits to the state while minimizing costs to Maryland ratepayers.”
According to the commission’s independent consultant, Levitan & Associates, Inc., the bill impacts associated with the Commission’s approval would add less than $1.40 per month for residential customers and less than a 1.4 percent impact on the annual bills of commercial and industrial customers – both less than the ratepayer impacts authorized by the enabling legislation, the Maryland Offshore Wind Energy Act of 2013.
Those impacts will not take effect until electricity is generated by the projects. U.S. Wind’s project is slated to be operational in early 2020. Skipjack anticipates being in operation near the end of 2022.
The commission attached nearly 30 conditions to the approval, including requirements that the developers create a minimum of 4,977 direct jobs during the development, construction and operating phases of the projects; pass 80 percent of any construction costs savings to ratepayers; and contribute $6 million each to the Maryland Offshore Wind Business Development Fund.
The companies will be required to use port facilities in the greater Baltimore region and Ocean City for construction and operations and maintenance activities. The developers must invest collectively at least $76 million in a steel fabrication plant in Maryland and together fund at least $39.6 million to support port upgrades at the Tradepoint Atlantic (formerly Sparrows Point) shipyard in Baltimore County.
The projects are expected to reduce at least 19,000 tons of carbon dioxide emissions per year for 20 years.
Maryland’s Renewable Energy Portfolio Standard (RPS) has a mandate of 25 percent of electricity purchased from renewable energy resources by 2020. The 2013 law created a carve-out for offshore wind energy in the RPS of up to 2.5% of total retail electricity sales.
During this proceeding deep concerns were expressed about the ability to see the turbines from shore and the impact those views would have on tourism and aesthetics. “We certainly recognize that there is strong public demand to make sure that sightlines to the turbines—particularly from Ocean City—are minimized to the fullest extent possible,” said Commissioner Anthony O’Donnell. “As a condition of our order, US Wind is required to locate its project as far to the east (away from the shoreline) of the designated wind energy area as practical. Each developer also must take advantage of the best commercially-available technology to lessen views of the wind turbines by beach-goers and residents, both during the day and at night.”
Each company must notify the Commission by May 25 whether it accepts the conditions of approval contained in the order.