Maryland Moving ahead with Expensive Offshore Wind

by Anthony Ward on February 8, 2013

in Blog

According to an article in the Washington Post, Maryland Governor Martin O’Malley’s long-sought offshore wind project is positioned to win approval from the state legislature within the upcoming weeks.  Environmentalists have fought hard to encourage States and developers to build off-shore wind projects on the East Coast. At least six wind farms have been proposed in the region. However, owing to the inefficient and costly nature of offshore wind farms, combined with the need for heavy subsidization, none of these projects have managed to gain any traction.

The new bill, known as the Maryland Offshore Wind Energy Act of 2013, will designate a “Wind Energy Area”, a zone in coastal waters situated about 10 miles east of Ocean City. It will also establish a $10 million Offshore Wind Business Development Fund designed to provide incentives and support for small businesses entering into the newly created industry.

Past attempts to approve the Maryland project have been met with strong opposition from both the state legislature and developers.

The Maryland legislature in 2010 refused to bring the issue up for a vote, warning that the project would cost Maryland taxpayers twice the initial estimates of $1.5 billion. Further opposition to the project arose after it was revealed that the governor’s former chief of staff was one of eight bidders to develop the project.

Developers of the project have been equally pessimistic.  Many developers have noted the high price and low energy makes the project an unappealing investment.

While developers continue to withhold support for the proposed project, several modifications that have been made to the new bill have managed to garner support from lawmakers.

What are these changes?  The Washington Post article details the following:

To win support from some lawmakers, O’Malley has embraced a financing model involving renewable energy credits that is unproven in the risky realm of offshore wind. To win over others, he has limited the cost of the subsidy to about $1.50 a month per household. The subsidy will amount to $2.5 billion over 20 years.

Also to reduce costs, the project was downgraded from a rated capacity of 500mw to 200MW. Because wind is intermittent, windmills typically generate less than a third of their rated capacity.

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