Mixed News on Offshore Wind Development

The good news and bad news of offshore wind development and how it affects North Carolina.

Offshore wind energy development, critical to plans for making American electric generation carbon neutral, saw both good and bad news in recent days.

The good news? The Bureau of Ocean Energy Management (BOEM) announced its approval of what will be the largest offshore wind project in the United States. The Dominion Energy’s Coastal Virginia Offshore Wind (CVOW) project expects to supply up to 3 megawatts of clean energy production.

Southern Environmental Law Center (SELC) senior attorney, Will Cleveland, said, “The CVOW project will significantly reduce Dominion’s reliance on coal and methane gas and also means cost savings for customers. We are glad the project continues to move forward in a way that is going to bring Virginians more wind power, while balancing the need to protect the state’s natural resources as the project takes shape.”

The bad news? Danish wind energy developer Orstead announced the cancellation of two planned major wind energy projects off the coast of New Jersey. They cited rising costs of construction, tax credit shortfalls, and supply chain difficulties. These and other projects have been impacted by older agreements to supply the energy at rates which assumed construction at lower costs than those currently being experienced.

How are these developments likely to affect potential wind energy projects off the North Carolina coast?

WFAE climate news reporter David Boraks says that the root of the recent project cancellations lies in their contracts to supply power at rates too low to recover their costs. That’s a situation which does not apply to the North Carolina projects, which are at an earlier stage of development. Contract rates for the wind energy purchase will be able to take inflation-adjusted current construction costs into account.

Further, Katherine Kollins, president of the Southeastern Wind Coalition, told Boraks that the underlying arguments for offshore wind power remain strong. “Offshore wind is an incredible asset to have on our grid. It produces electricity during winter storms. It produces electricity during winter mornings when the solar hasn’t yet started producing. And also in summer afternoons, (when) we all crank our air conditioners – late summer afternoons, the sun goes down, we still need electricity.”

And we completely agree. North Carolina should move forward steadily with offshore wind energy development. Electric customers and our climate will both benefit.

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