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March 3, 2013

Federal agency undermining state offshore wind plans, backers say

Tensions are building between the struggling U.S. offshore wind industry and the federal agency that oversees it.

Industry leaders worry that a new federal program designed to spark offshore wind construction could end up killing proposals that have been in the works for years, according to developers at the annual Offshore Wind Power USA conference this past week in Boston.

The federal government has jurisdiction over much of the nation’s offshore wind resources, but it only recently began developing regulations that would help the industry get off the ground. In the interim, states along the Atlantic coast began soliciting wind proposals and developing programs to help jump-start development.

Rhode Island, for instance, chose a developer to build a demonstration project in state waters, with the idea that the same developer would go on to build a wind farm on federal waters off the state’s coast. New Jersey selected developers for three multimillion-dollar data stations to measure wind resources, a critical first step for the eventual development of the firms’ proposed wind farms.

But now, the federal Bureau of Ocean Energy Management (BOEM) has drawn up rules to auction the rights for those offshore contracts — and all these developers will have to compete with others for the rights to build their turbines at sea.

In panel discussions and conversations, the developers talked about how the process might undercut the time and money they and state agencies had spent pushing the projects along. This year the BOEM plans to hold its first competitive auction for two sites in the Massachusetts-Rhode Island wind energy area and one site in Virginia. The process will be similar to the one it uses to award leases for offshore oil and gas drilling.

Jeff Grybowski is CEO of Deepwater Wind, the company Rhode Island chose to build a demonstration project. He said he worries that his company could lose out in the federal auction, despite the work it has done to develop the first large-scale wind farm off Rhode Island.

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