A recent lease sale off the coast of Maryland for offshore wind energy development and the possibility for more development off North Carolina’s coast boosts this domestic clean energy industry.
On August 19, 2014, the U. S. Department of the Interior’s Bureau of Ocean Energy Management’s (BOEM) leased 80,000 acres of the outer Continental Shelf off the coast of Maryland for offshore wind development as part of the bureau’s “Smart for the Start” initiative. U.S. Wind Inc., a subsidiary of an Italian-owned company, Renexia, won the rights to develop in what originally began as two leasing areas, paying a total of $8.7 million. The combined area has the potential to produce 1,450 megawatts of clean, renewable energy, enough to power around 300,000 homes in the state.
Just a week before Maryland’s lease sale, BOEM also identified three wind energy areas off the coast of North Carolina for the purpose of developing offshore wind energy. The 307,590 acres consists of three areas: “Kitty Hawk,” which is about 25 miles from the Outer Banks, and “Wilmington East” and “Wilmington West,” which are just south of Oak Island.
Already an important part of Europe’s energy market, offshore wind provides a source of renewable energy that is competitive and less costly in the long-term than traditional fossil fuels. In Oceana’s report, Untapped Wealth, analysts found that domestic offshore wind development would cost about $36 billion less than offshore oil and gas production combined, while creating about three times as many jobs per dollar invested than fossil fuel production.
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The main barrier to a thriving offshore wind energy industry is financing. Offshore wind farms are initially expensive to construct, which is why it is critical to incentivize investment in this industry. The Investment Tax Credit (ITC) does just that by providing a 30% tax credit to qualified investors in offshore wind projects.
Allowed to expire at the end of 2013, the ITC needs to be extended as soon as possible to jumpstart this growing industry. The “Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act,” a bipartisan bill that was reported favorably out of the U.S. Senate Finance committee in April, includes an extension of the ITC for offshore wind projects through the end of 2015. The passing of this bill by Congress is imperative to continue the current momentum of the offshore wind industry, and it will allow the U.S. to finally start benefiting from the environmental and economic benefits of this job-creating domestic clean energy industry.
As the threats of global climate change become more severe and recovery more costly, the U.S. must make a serious national commitment to developing all possible domestic clean energy. Doing so will not only help to mitigate the effects of climate change, but it will also stimulate the economy by revitalizing local ports and the manufacturing sector. As Maryland Governor Martin O’Malley has said of offshore wind development, it’s “win-win-win.”