On April 28, 2010, DOI Secretary Salazar signed off on the Record of Decision approving the lease for the Cape Wind Project, to be located in Nantucket Sound off the coast of Massachusetts.  As far as records go, the WSJ Online notes that Cape Wind is the first offshore wind farm approved for the United States – though the process still faces a potential legal battle (though contrary to the WSJ, I’m betting that challenges will be dispatched quickly and summarily).

In the meantime, as this photo shows, China just put the finishing touches on the Donghai Bridge  offshore wind farm that was approved in 2008 and is nearly complete.  If you’re interested, compare the one page Donghai Bridge authorization from China to the slightly longer! Record of Decision signed by Secretary Salazar, not to mention the massive Environmental Impact Statement and supporting documents.

from Wikipedia, e-consultation.org

As marine renewables projects move forward in the United States, the stakeholder process for making decisions about siting is fast becoming an entrenched practice.  That’s not surprising, because here in the United States, in particular, we revere the stakeholder process as a tool for regulatory decision making.  And after all, what’s not to like?  At least on the surface, the stakeholder process is inclusive and democratic.  By working together, the theory goes, the parties build trust and arrive at decisions that are less vulnerable to court challenge.

But is the stakeholder process really all it’s cracked up to be?  I’m not sure.  For starters, the costs are enormous, and the burdens to small parties are imposing.  Consider the views expressed by a Iberdrola, a decent sized wind farm developer in a recent FERC proceeding on the issue of integrating renewables into the grid (as an aside, I’ve not posted on integration of marine hydrokinetics because the technologies are barely pre-commercial – but if you’re interested in the issues, the Oregon Wave Energy Trust recently completed a study on wave integration issues in Oregon).   As the New York Times Climate Blog reports, Iberdrola commented that the stakeholder meetings used by regional transmission groups to adopt practices for integrating wind are themselves discriminatory because smaller developers cannot afford to participate on a regular basis.  the Times notes that the Midwest Independent Transmission System Operator (MISO) held 600 stakeholder meetings in a year’s time, thus precluding participation by all but well funded utility staffers.

The stakeholder process for marine and hydrokinetic isn’t much better.  Though there are far fewer meetings, companies that can afford the process, as well as funded resource agency and NGO staff, are generally able to negotiate better deals more expeditiously than those who can’t afford the process.

More importantly, are the results of an extensive stakeholder process necessarily better?  I’m not so sure of that either.  Most parties believe that when they negotiate and file a settlement, that FERC will rubber stamp it, incorporate it into the terms of the license and enforce it.  That’s not necessarily the case.  FERC has very specific rules on the settlement process, and will decline to include measures that go beyond what is required by the public interest standards of the Federal Power Act.  As a result, parties who believed they were going to obtain a certain result because of expectations from the settlement process, may later learn that what they negotiated can’t be enforced.   These parties will feel cheated by the settlement process, thus breeding mis-trust rather than fostering it.

There’s a final problem with the stakeholder process.  As Philip Howard points out in this video, we can take the democratic process too far to the point where it erodes the authority of the regulatory agencies that Congress endowed with the power to make decisions in the public interest.

Naturally, I don’t think that we should eliminate the stakeholder process but rather, change it to make it work better for all involved.  First, the stakeholder process ought to take advantage of today’s low cost tech tools, and conduct a majority of meetings online and exchange documents and make information available through online portals.   Second,  the process should clearly delineate levels of interest or expertise.  If a pipeline or wind farm is going up on an individual’s property, they deserve a full level of input without question.  But for those whose interests are more remote, comments should be limited to discrete time frames in the proceeding.  More importantly, technical issues ought to be addressed by experts.  Stakeholders shouldn’t be coming up with lists of studies; that’s the job of developers and resources agencies, as informed by scientists or other experts.   Finally, what’s most significant is that agencies and developers need to keep the purpose of the proceeding in mind.  Development studies aren’t done for fun or interest – they are intended for the specific purpose of generating data to enable agencies to make decisions consistent with their statutory mandates.  Thus, the process needs to begin with the end:  identifying an agency’s objective and figuring out how to develop the information that the agency needs to meet its mandate.

Though the recent permitting of Cape Wind was gratifying, the offshore renewables industry in the United States can’t survive with costly, protracted permitting processes.   Of course, perhaps that’s the biggest problem of all — our focus on processes rather than solutions.

Above is the excerpt from the Daily Record. To see all 100 Marylanders named, click
here.

Let’s hope that in Delaware, first isn’t worst.

The Newark Post Online reports that the Department of Interior’s Mineral Management Service (MMS)  has issued the first Request for Interest (RFI) in an offshore wind site on the Outer Continental Shelf, off the coast of Delaware.  If you’re a regular reader of this blog, you’ll recall that several years back, Bluewater Wind, an offshore wind developer, miraculously prevailed over a natural gas fired plant in a competitive bidding procedure to supply power to Delaware utility Delmarva Power.  Well, the site where Bluewater plans to deploy that wind project is currently the subject of the MMS RFI.

Of course, Bluewater doesn’t have much choice in the matter.  According to the MMS Regulations, MMS is required to publish notice of interest in a site and determine whether competitive interest exists.  Which means that even though Bluewater has been eying sites off of Delaware for several years, a competitor could still apply for the site, setting up a bonus bidding war and adding costs to these already pricey projects.

MMS has long insisted that the provisions of EPAct 2005 left it no choice but to implement a competitive bidding process.  True enough.  However, competition doesn’t have to come down to who has the most money.  The Federal Energy Regulatory Commission’s process for choosing developers for hydro sites is also competitive (at least in theory since FERC often calls a tie and defaults to first to file or municipal preference).  Specifically, the Federal Power Act directs FERC to choose the project best adapted to make best comprehensive use of the waterway.  MMS could have adopted a similar approach to competition, or better yet, could have granted a marginal preference to the applicant – in this case Bluewater – that brings the site to the attention of MMS.

In any event, I’m hoping that all of this is academic, with Bluewater ultimately securing a site for a project in which it has already invested substantial resources.  On the other hand, the offshore wind industry hasn’t exactly faced smooth sailing here in the United States, so a competitive proceeding for the Delaware site wouldn’t surprise me either.

To view a map of the proposed site in the RFI, click here.  The official RFI will appear in the April 23 issue of the Federal Register.  And for more information on MMS’ offshore wind activities in other states, visit this section of the MMS Website.

Today’s New York Times includes a great feature article on tidal energy in the United States, with detailed coverage of the leaders in U.S. markets, including Verdant Power and Ocean Renewable Power Corporation. The article quotes Dr. Bob Thresher of NREL, who devoted much of his career to wind, and has now gone over to marine renewables:

In many ways, tidal power is at a stage similar to wind power’s two or three decades ago. “That’s exactly the way wind started out, with fairly small projects,” said Robert Thresher, a research fellow with the National Renewable Energy Laboratory in Colorado, who, after years of wind-power research, now studies what is called marine hydrokinetics, a catch-all term for tidal, wave and ocean thermal energy. “They learned how to operate and maintain their machines. It was somewhat trial and error.”
Now large, efficient wind turbines are arrayed in vast farms. With tidal power, Mr. Thresher said, “I think you’ll see exactly the same kind of evolution” of the technology.

The wind comparison is reassuring because wind cost around 25 cents/kwh in 1980 and is now down to around 4-6 cents/kwh (that’s not counting PTCs or other subsidies).  Tim Ramsey of DOE is even more optimistic; he believes that tidal power may only take a decade to catch up to wind, rather than 20 or 30 years.

On April 13, 2010, the U.S. Fish and Wildlife Service presented recommendations to Secretary Salazar of the Department of Interior on minimizing windfarms’ impacts on wildlife and habitat, reports the Las Vegas Sun The lengthy report available here recommends development of a tiered system for selecting project sites, evaluating project impacts and monitoring post-deployment impacts.

I’m still reading through the report, but what surprised me was FWS’ claim that project location, rather than size, is more determinative of impacts.  The report states that small projects can have substantial adverse impacts depending upon location – and therefore, evaluating impacts at the outset is very important.  The issues of size and impacts is troubling, since I’ve always assumed that in the ocean, 5-10 buoy arrays will have far less impact than deployments of ten or twenty times the size.

The report relates only to land based wind siting, but nevertheless, the tiered approach is intriguing and could potentially serve as a useful tool for marine renewable developers as well.

Facing an increased number of preliminary permits for conventional small hydro, FERC staff has proposed several initiatives to help small hydro developers – frequently, mom-and-pop operations – navigate and understand the FERC process.  Staff’s presentation to FERC Commissioners at the April 15 meeting is available here.

Some of the resources to be developed include a roadmap that explains the FERC process, fill in the blank license and exemption application templates and tips on expediting the license process.  Staff will also work to update Memoranda of Understanding with other agencies and develop and outreach program to assist small hydro.

To be fair, FERC staff has been extremely helpful and hands-on to marine renewables developers.  However, much of the assistance has been on a case by case basis, rather than through a uniform program such as that proposed for small hydro.  Perhaps as FERC develops its resources for small hydro developers, it might think to extend some of these resources to marine and hydrokinetic developers as well.

Back in August, I lamented that the United States still wasn’t fully capitalizing on opportunities for growth in ancillary industries like shipping which support marine renewables.  And that hasn’t changed much either.  To be sure, marine renewables are powering ancillary industries like ship building and oil and gas.  But as two recent articles bear out, the action remains overseas.

According to New Energy Focus, liberal Democrats in the US are proposing to invest up to 400 million pounds in refurbishing UK shipyards to manufacture offshore wind turbines and marine renewables equipment.

And over in Scotland, renewable energy is contributing to growth in the oil and gas industry.  OilVoice.com reports that “sales into the Renewable Energy sector increased from £10.8m to £17.9m in 2008 and are expected to increase rapidly in the future.”  According to Adrian Gillespie, Director of Energy and Low Carbon Technologies at Scottish Enterprise:

‘Oil and gas remains a key strength for Scottish and UK economic recovery, with the potential of the industry not just to move to international markets but also to diversify and support the development of new sectors including marine renewables and carbon capture and storage.’

Wave energy still remains several years away from full blown commercialization.  But if all goes well for offshore wind, by the time wave energy projects come into their own, they should be able to bypass one of the hurdles currently facing offshore wind: lack of adequate offshore transmission.

Fortunately, on both sides of the Atlantic, work is underway to develop offshore transmission grids that will help integrate large amounts of offshore wind into the grid and deliver power to areas of high demand.

As USA Today, citing a recent study by William Kempton of University of Delaware, an Atlantic Transmission Grid running along the East Coast would even out fluctuations in wind power production, thus making the resource more reliable.  Meanwhile, the SolveClimate.com Blog reports on the progress of Europe’s Supergrid, which would connect offshore wind farms North Sea from Sweden and Denmark to Britain.  (For more information, see Friends of the Supergrid)

Both the U.S. offshore transmission project and European Supergrid will be expensive.  However, at least in the U.S., land based transmission siting is a contentious process.  An offshore transmission grid might face fewer objections and could help relieve congestion and improve the reliability of the grid, which could justify allocating costs to a broader group of users.
In any event, if an offshore transmission line is built in the next few years, by the time wave energy reaches maturity, it should be able to plug and play.

Here’s a quick video that I cut for my trade association, the Ocean Renewable Energy Coalition (www.oceanrenewable.com) using Google’s neat new video creation tool.  The video conveys both the enormous opportunities that marine renewables can provide as well as the challenges that the industry faces.  Enjoy!