Offshore Wind Revolution
Three Projects Get Millions from Dept. of Energy
Last week, Americans got their first real taste of the next big thing in wind power projects.
With lots of promise and loads of potential for offshore wind development, the Department of Energy (DOE) pledged last Wednesday that it will give $47 million in grants to each of three projects it previously supported.
Those projects are off the coasts of New Jersey, Oregon and Virginia, and should be delivering electricity by 2017.
Rhode Island also got in on the act last week. Unaffiliated with what the DOE is preparing, the state government signed off on environmental permits that would give the U.S. its first commercial-scale offshore wind farm in the U.S. territories.
Last week initiated the next phase of the Energy Department’s push to promote wind power and put it in line with fossil electricity production. Until now, progress has lagged behind a far more advanced European offshore wind system because of engineering, permits and financing challenges, as well as political and some community opposition. Rhode Island’s ruling shows that there is also a willingness to go forward with wind on a state level.
Wind power can no longer be ignored, especially after seeing what they’re doing with it across the pond. The largely untapped resource could create thousands more manufacturing, construction and supply chain jobs in the already vibrant energy sector. Along the way, it will drive billions of dollars in local economic investment.
The DOE announced back in 2012 that it would make $4 million grants to seven demonstration projects. The three projects in last week’s announcement have been chosen as the bread and butter of this revolution, receiving greater funding.
Fisherman’s Energy will operate five turbines of five-megawatts each off the waters of Atlantic City, New Jersey; Principal Power will do the same with five six-megawatt turbines off the coast of Coos Bay, Oregon; and Dominion Virginia Power of Dominion Resources (NYSE: D) will install two six-megawatt turbines off the shores of Virginia Beach.
The DOE is also closely working with projects for Maine and in Lake Erie.
Companies at Play
Deepwater Wind has all the permits it needs from Rhode Island to begin deployment of its Block Island wind farm. The 30-megawatt undertaking has momentum on its side and could see steel in the water any day now.
Once it’s up and running – slated for 2015 – it will generate enough power to meet the energy demands of more than 17,000 homes, according to UPI.
Last week also marked a move for Siemens (NYSE: SI), the German firm making a strong push for its wind power segment here in the U.S. It announced that it would be moving its power-generating operations over here, not only capitalizing on the oil and gas boom, but with an eye on the potential for offshore wind.
Siemens has already proven they have what it takes to mount a successful wind campaign. Its BorWin2 offshore platform in the North Sea was recently added to its already successful HelWin1, which was erected in August 2013. According to PennEnergy, the BorWin2 has a transmission capacity of 800 megawatts, or enough to meet the demands of some 800,000 German households. Once the system is fully online as promised by the first half of 2015, more than 1.3 million households will get electricity from this one Siemens wind farm.
On a sidenote, Siemens could also turn up in a deal gone bad that involved General Electric’s (NYSE: GE) bid to France’s Alstom (EPA: ALO) for its energy division.
France dismissed GE’s £10.2 billion (about $17.16 billion) offer as “not good enough”. Alstom had already approved the sale, but it was overturned for what is being hailed as “national interest” and a hope for better offers.
Alstom’s energy division makes up roughly 70 percent of the French firm’s turnover. Now we wait and see if
Siemens will make an offer after expressing some interest. France supposedly is looking for an equal partnership that wouldn’t absolve of Alstom.
A final decision will be postponed for one month as other offers are considered, most notably from Siemens.
Some opinions say Siemens has no real interest in buying Alstom’s energy sector. Either way, it will be a good indicator of the direction they will likely take on energy.
And just because the DOE is shelling out grant money for offshore wind, that doesn’t necessarily mean that offshore wind will succeed here in the states.
Not everything the DOE touches turns to gold. The Babcock & Wilcox (NYSE: BWC) deal from 2012 to develop a small reactor and match the company dollar for dollar in cost recently went south as the company backed off the technology and began laying off workers.
The U.S. already has a strong blueprint for success from Europe and with companies like Siemens making a home here; I see a very strong offshore wind revolution in our future.