Wind power created by off-shore farms is expensive. But, tax credits which could potentially expire at the end of 2013 are helping to fuel a new wave of wind farm construction projects, especially on the Atlantic coast.
These off-shore wind farms can generally produce a greater amount of power on a more consistent basis that land-based wind farms. But, they are still not able to produce power cheaply enough to offset fossil fuels in the production of electricity.
The Bureau of Ocean Management (BOEM) recently announced that they will be auctioning off leases for off-shore wind production in July. The areas the auction will cover are off the coasts of Massachusetts and Rhode Island.
"Today we are moving closer to tapping into the enormous potential offered by offshore wind to create jobs, increase our sustainability, and strengthen our nation's competitiveness in this new energy frontier," Sally Jewell, Secretary of the Interior, said.
The first of these areas to be auctioned off is between Block Island and Martha's Vineyard in Massachusetts. This area, spread over 165,000 acres, is estimated to have a power generation capacity of around 3.4 Gigawatts (GW) of electricity when fully developed. It will be auctioned off in two parts in July, in North and South Lease Areas. The North Lease Area is expected to be the biggest producer of electricty - 1.955 GW of it.
Wind power is currently the fastest-growing source of electrical production, equaling 42 percent of all new generating capacity built in 2012. The National Renewable Energy Laboratory estimated that the total energy which could be produced from off-shore wind production could be as high as 4,150 GW, almost four times the amount produced in the country currently from all sources combined.
But the cost of energy from off-shire wind plants is 21.8 cents per kilowatt-hour. This is almost three times the cost of wind farms on land.
Despite these challenges, governors have, so far, been in favor of wind farm construction off their shores.
"The U.S. Department of Energy projects 20,000 jobs by 2020 in offshore wind. Why not host those jobs here in Massachusetts?" Deval Patrick, Massachusetts governor, asked.
For the last few years, Cape Wind, a private company, has been in the approval process to build a 468 megawatt (MW) wind farm between Nantucket Island and the Massachusetts coast. The Bluewater wind project, a 96,000 acre system run by NRG Energy, is slated for construction in the waters off the Delaware coast.
The tax credit for new wind generators was due to expire at the end of 2012. Nearly no new construction of wind farms was started in the last three months of the year. However, that year's tax credit required that construction of new plants be completed by the end of 2012. This year's version of the regulation gives operators 10 years to complete the new wind farms. It remains to be seen what effect this will have on wind farm construction in the final months of 2013.
