Offshore wind energy

The 30-megawatt Block Island Wind Farm, off the coast of Rhode Island, is the only operating offshore wind farm in the United States. There are between 15,000 MW and 20,000 MW of offshore wind power in the pipeline.

Offshore wind is the most expensive form of electricity, according to the Department of Energy, with a levelized cost of $106.50/MWh with a tax credit, compared with $36.60/MWh for onshore wind. However, Ørsted, which is building an offshore wind farm off New Jersey’s coast, says after energy and capacity revenue is refunded, the cost will be $46.46/MWh. In Europe, offshore wind is cheaper than new nuclear or fossil fuel options.

Offshore wind speeds tend to be faster than onshore. Bigger turbines and blades are more easily transported to offshore sites. GE is developing a 260-meter tall turbine for offshore that will have 107-meter-long blades and a 12-megawatt capacity.  Additionally, wind farms off the U.S. East Coast are a viable alternative because they can provide power closer to population centers than other forms of renewable energy. 

It is more difficult and expensive to build in water deeper than 200 ft and hard to maintain the turbines and structures in offshore weather and waves. The transmission lines to carry power back to the shore can be expensive. 

As it does with offshore oil and gas, the Interior Department, through its Bureau of Ocean Energy Management, holds periodic auctions to lease offshore parcels to developers interested in pursuing the development of offshore wind.

The Energy Policy Act of 2005 (EPAct) authorizes BOEM to issue leases, easements and rights of way to allow renewable energy development on the Outer Continental Shelf, generally three nautical miles from a state’s shoreline. EPAct provides a general framework for BOEM to follow when authorizing renewable energy activities. EPAct requires BOEM to coordinate with relevant federal agencies and affected state and local governments, obtain fair return for leases and grants issued, and ensure that renewable energy development takes place in a safe and environmentally responsible manner. In 2009, the Interior Department finalized the program’s regulations.  

The department has held eight competitive lease sales, which have resulted in 15 leases over 1.7 million acres. The sales have garnered $473 million for the federal government.

The government also provides an investment tax credit through the end of this year for 12 percent of an offshore wind farm’s expenditures, and has provided grants for a handful of offshore projects.