Delaware offshore wind farm proposal abandoned

While there is plenty of disappointment in Delaware that an offshore wind farm project will not be built, at least one elected official believes all is not lost.

Tuesday, NRG Energy announced it had not found a buyer for Bluewater Wind, which it acquired in 2009 and was the developer of a proposed farm of dozens of windmills about 13 miles off the southern Delaware coast.  NRG ended a power purchase agreement with Delmarva Power for 200 MW (megawatts) over 25 years. 

“While today’s news is not a surprise, we still believe offshore wind and the manufacturing jobs associated with the industry, could play an important  role in Delaware’s future,” Governor Jack Markell said in a statement released by his office.  “To that end, if global market conditions improve, we stand ready to sit down with industry representatives to discuss ways to make the promise of offshore wind in Delaware a reality.”

Delaware Natural Resources Secretary Collin O’Mara believes the project faced a combination of factors that made it impossible for NRG Energy to proceed:  the need to find financial investors for a costly project of up to $1.5-billion, uncertainty in the financial markets that leads to reluctance to lend, and uncertainty about federal credits and policies he said are “needed to make these kind of projects work.”

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“Unfortunately, all of this added up to the contract not working out at this time,” O’Mara said. 

The state requires Delmarva Power to have 25-percent of its energy coming from renewable sources by 2025, according to utility spokesman Matt Likovich.  “We’re still confident we’ll be able to meet that goal,” Likovich said.  Delmarva Power works through what is known as an Integrated Resource Planning Process, overseen by the state Public Service Commission, to develop a strategy for meeting the renewable energy mandate.  “Before we would consider investing in any renewabe energy project, we would evaluate what the cost impact would be to our customers,” Likovich added.

Delmarva Power has incurred some costs associated with the project, but Likovich said since NRG canceled the contract before January 1st, two-million dollars in security that NRG had put up will be credited to DPL customers.

State Representative John Kowalko (D-Newark South), a longtime advocate of the wind power proposal, said Delaware developed a landmark agreement involving the wind power developer and the utility.  “That was going to enable a minimal amount of risk for ratepayers and taxpayers in bringing a new thing such as offshore wind power generation to this country,” Kowalko said.  He also believes that the concern over the bankruptcy of Solyndra, a solar panel manufacturer that received half-a-billion dollars in federal loan guarantees, dampened enthusiasm for alternative energy credits, and the economic recession contributed to NRG’s difficulties in finding a financial partner.

Still, Kowalko thinks the work put in by the state over the past several years in planning for the project could pay off in the future.

“I see a bright future for alternative energy,” Kowalko said.  “I’m hoping that Delaware, as long as we remain outspoken and willing to not just build coalitions but to participate actively as visionaries, as forerunners in the alternative energy field, we can position ‘little, tiny Delaware’ as a major player in getting some of these jobs and projects.”

O’Mara agrees, saying that DNREC has perhaps the most experience of any team of environmental regulators in the country in dealing with issues and the permit process of offshore wind proposals.  “I think we also have a very engaged citizenry that was strongly behind the Bluewater project, but also more importantly behind having cleaner energy coming into our fuel mix,” he added.

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