States Move Offshore Wind Forward in 2022
March 11, 2022
The offshore wind industry is gaining momentum among policymakers and financiers with states establishing nearly 45,000 Megawatts of offshore wind procurement targets to date. However, these procurements scratch the surface of this country’s potential for offshore wind: U.S. waters contain an estimated two terawatts of offshore wind capacity, which is enough energy to power roughly 1.6 billion homes.
The benefits of offshore wind development are extensive; full deployment of offshore wind could provide $440 million in annual lease payments, $680 million in annual property tax, and offshore wind farms can even act as marine preservation areas to promote biodiversity and healthy oceans. These potential benefits show why states are working hard on offshore wind expansion.
Below is a summary of the momentum from states on offshore wind in 2021, current legislation that is pending in 2022, federal initiative updates, and non-legislature state activities from 2022.
2021 State Momentum
Following the first commercial 2016 offshore wind installation off the coast of Rhode Island, states worked to expand offshore wind options in 2021.
East Coast Developments
- Maine enacted L.D. 336, which requires negotiation of project labor agreements, or collective bargaining agreements that provide structure and employment stability to large construction projects. Considering the U.S. Department of Energy estimates that offshore wind development could create up to 160,000 jobs by 2050, project labor agreements like these ensure that offshore wind construction is done in an equitable way.
- Similarly, New Jersey enacted S. 3926, which establishes certain criteria to be met by developers to obtain necessary property rights, prioritizes public input in decision-making, and protects lands reserved for recreation and conservation.
West Coast Developments
The opportunity that offshore wind presents for the country has attracted bipartisan support.
- Oregon enacted H.B. 3375, a bill spearheaded by a Republican which plans for development of up to three gigawatts of floating offshore wind energy projects within federal waters off Oregon Coast by 2030. In order to be fully prepared to incorporate offshore wind infrastructure, this bill also requires Oregon’s Department of Energy to conduct a literature review on the benefits and challenges of integrating wind energy and consult with other appropriate state, regional, and national entities on state renewable energy goals.
- California enacted A.B. 525, which requires the Energy Commission to evaluate and quantify the maximum feasible capacity of offshore wind to achieve reliability, ratepayer, employment, and decarbonization benefits and to establish offshore wind planning goals for 2030 and 2045. This bill specifically includes environmental justice communities during the planning process and requires implementation of strategies to address impacts on front line communities.
2022 State Legislation Updates
This year, at least nine states introduced legislation pertaining to offshore wind procurement, stakeholder engagement, transmission, and workforce. The following bills have passed at least one chamber.
- Hawaii passed S.B.2535 through the Senate, which recognizes the benefits of offshore wind development while ensuring that the siting process considers key environmental impacts.
- Massachusetts passed H.4524 through the House and the bill would establish an environmental working group and fisheries working group to provide input on best practices for avoiding impacts to wildlife and water-dependent livelihoods, create job training for opportunities in the offshore wind industry, and eliminate the existing price cap in most situations.
- New Hampshire passed two offshore wind bills through the Senate. SB 268 requires the public utilities commission to ensure that certain criteria regarding impact and use studies are met before approving offshore wind power purchase agreements. SB 440 directs the office of offshore wind industry development to advise on the development of offshore wind in the Gulf of Maine and the respective power purchase agreements.
- South Carolina passed H.J.R. 4831 through the House, which would advance an economic development study to create a plan to compete in attracting offshore wind industries to the state.
State legislation has been supplemented with a wide variety of federal initiatives to advance the entire country’s offshore wind capacity. In 2021, the Biden Administration announced a goal to develop 30GW of offshore wind energy by 2030. That’s enough power to meet the demand of more than 10 million American homes.
In New York/New Jersey, The Bureau of Ocean Energy Management (BOEM) released Final Sale Notice for Commercial Leasing for Wind Power on the Outer Continental Shelf (OCS). The lessees will be required to identify “any Tribes, ocean users, underserved communities, and others potentially affected by projects and report on engagement activities.” The lease sale held on February 23 drew competitive winning bids from six companies totaling approximately $4.37 billion. This was the most successful bidding process to date, outperforming even oil and gas, providing a clear demonstration that renewable energy is the future and where companies are investing their money.
BOEM has also worked to expand offshore wind infrastructure in the Gulf of Mexico and is preparing a draft environmental assessment (EA) for offshore wind activities in the area.
In California, the publication of BOEM’s draft Environmental Assessment for the Humboldt area initiated a 30-day public comment period that closed on February 10, 2022.
In August 2021, BOEM announced it would be updating its environmental review of proposed wind leasing options offshore the Carolinas (Carolina Long Bay). On Dec. 8, BOEM posted a draft of its supplemental environmental assessment (SEA) on its website for public review and comment.
Non-Legislative State Activity
Along with legislation, some states are pursuing non-legislative initiatives to advance offshore wind infrastructure for the benefit of the environment. In 2019, Maine launched the Offshore Wind Initiative to explore how to thoughtfully develop offshore wind in the Gulf of Maine. In 2021, the North Carolina governor issued an executive order setting goals for offshore wind development in the state.
In January, New York Governor Kathy Hochul announced a $500 million investment in offshore wind infrastructure as well as an upcoming round of procurement that is expected to result in two million gigawatts of offshore wind energy, enough to power 1.5 million homes.
In California, Governor Gavin Newsom unveiled a state budget proposal for the 2022-2023 fiscal year in January dedicating $45 million to offshore wind activities.
State Will Continue To Expand Offshore Wind Development
States understand that offshore wind is a key component of our renewable energy makeup and holds much-untapped potential. Follow ncelenviro.org/offshore-wind for updates on offshore wind legislation and events.