Interior Department Signs First U.S. Offshore Wind Energy Lease

October 13, 2010

Photo of wind turbines in the ocean off the coast of Sweden.

Offshore turbines like these located near Sweden could appear in U.S. waters to produce renewable power.
Credit: Seimens

The U.S. Department of Interior (DOI) and Cape Wind Associates signed the nation's first lease for commercial wind energy development on the Outer Continental Shelf (OCS) on October 6. The leased area covers 25 square miles on Horseshoe Shoals in Nantucket Sound, off the coast of Massachusetts. Cape Wind is planning to build 130 wind turbines in the leased area to generate up to 468 megawatts (MW) of wind power, with an average anticipated output of 182 MW. The 28-year lease will cost the company $88,278 in annual rent prior to production, and a 2%-7% operating fee during production. The Cape Wind energy project would be the first wind farm on the OCS, and could generate enough power to meet 75% of the electricity demand for Cape Cod, Martha's Vineyard, and Nantucket Island combined. See the DOI press release and the Cape Wind page on the Web site of DOI's Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM).

The lease signing came a day before DOE released a report from its National Renewable Energy Laboratory (NREL) that comprehensively analyzes the key factors impacting the deployment of offshore wind power in the United States. The report, "Large-Scale Offshore Wind Power in the United States: Assessment of Opportunities and Barriers," analyzes the technology challenges, economics, permitting procedures, and potential risks and benefits of offshore wind power deployment in U.S. waters. NREL finds that harnessing even a fraction of the potential offshore wind resource could create thousands of jobs and help revitalize the U.S. manufacturing sector, reduce greenhouse gas emissions, diversify U.S. energy supplies, and provide cost-competitive electricity to key coastal regions. The report also concludes that while significant challenges remain, effective research, policies, and market commitment will enable offshore wind to play a significant role in the country's energy future. To help address those challenges, DOE and DOI have launched several interagency efforts that focus on siting and permitting, standards and technical collaboration, resource assessment and design conditions, and environmental monitoring and mitigation. See the DOE press release, the report's executive summaryPDF and the full reportPDF, and the interagency initiativesPDF. And for more information on DOE's efforts, see the Offshore Wind Technology page on DOE's Wind and Water Power Program Web site.

NREL's report on offshore wind power opportunities and barriers draws in part on a recent NREL report that assesses the electricity generating potential of offshore wind resources in the United States. According to the "Assessment of Offshore Wind Energy Resources in the United States," 4,150 gigawatts of potential wind power capacity from offshore wind resources are available in the United States. The estimate does not describe actual planned offshore wind development, and the report does not consider that some offshore areas may be excluded from energy development on the basis of environmental, human use, or technical considerations. According to DOE's Energy Information Administration, in 2008 the nation's total electric generating capacity from all sources was 1,010 gigawatts. See the NREL press release and the reportPDF.

Meanwhile, other offshore wind projects continue to go forward. Garden State Offshore Energy (GSOE) announced on October 4 that it is moving forward with plans to install state-of-the-art mobile, floating wind resource assessment equipment to assess conditions at its proposed offshore wind farm site, located 20 miles off the New Jersey coast. Farther up the Atlantic Coast, BOEM and the State of Maine have formed an offshore renewable energy task force to facilitate communication among BOEM and local, state, tribal, and other federal stakeholders concerning offshore leasing and development. Similar task forces have been established in Rhode Island, Massachusetts, New Jersey, Virginia, Delaware, and Maryland, and are in process for New York, North Carolina, South Carolina, and Florida. In addition, the nation's first freshwater offshore wind plant is also moving ahead, as the Lake Erie Energy Development Corporation (LEEDCo) announced on September 14 that it has selected a team of three companies to develop an offshore wind farm on Lake Erie. The initial pilot project will be a five-turbine, 20-MW wind farm, located 5-10 miles off the shore of Cleveland, Ohio. Construction on the initial phase is tentatively scheduled to begin in late 2012. See the press releases from GSOEPDF, the BOEM , and LEEDCo.