Wind power project wavers after subsidy cuts
Wind power development off Delaware's coast is delayed after Congress cuts back two loan guarantee programs. Is company having second thoughts about the wind power project?
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Markell praised NRG for its cleanup efforts at Indian River, but expressed disappointment when it came to the status of the wind farm.Skip to next paragraph
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"There have been a lot of people from the beginning who questioned how committed they were to this project. I think it's going to be important we quickly figure exactly that out," Markell said.
Gaier said Bluewater will not build the tower this year. It is needed to monitor weather and bird migration patterns, measurements that are required to prepare the detailed environmental impact statement needed to receive a federal permit. The company has been selected to negotiate a lease for the offshore tract.
Bluewater President Peter Mandelstam was not available for comment, Gaier said.
Bluewater faces an important contractual deadline June 23, when it can walk away from the project for any reason and lose just $2 million. To move forward, it would need to pay an additional $6 million to Delmarva.
Asked which way the firm planned to go a month from now, Gaier said: "We're looking at all our options."
Delmarva spokeswoman Bridget Shelton said NRG had not approached them about extending the deadline, or addressing the federal financial support issues.
Delmarva regional President Gary Stockbridge was unavailable, Shelton said. Stockbridge did not immediately return a call to his cell phone.
Markell said Delaware's congressional delegation will work to get the tax credit and loan programs restored, but "waiting around for a couple of years to see what develops is probably not going to do a whole lot of good."
"He said, 'Absolutely, we are.' And I take him at his word," Carper said.
Rep. John Carney said he was disappointed by NRG's announcement.
"Unfortunately, many in Congress have decided that instead of investing in new sources of energy, the U.S. should continue to hand out billions in unnecessary oil subsidies," Carney said.
NRG's move comes at a time it appears to be showing less of an appetite for risk. Last month, NRG pulled its financial support from a Texas nuclear reactor expansion project, after having spent $331 million on permitting and planning.
It also comes as the political winds shift away from subsidies for renewable energy.
In the wake of global warming concerns five years ago, offshore wind made a splash as a way to deliver renewable power to large population centers on the East Coast.
But with the economic downturn, consumers turned their worries toward high energy prices, and offshore windprojects, with their relatively high per-kilowatt-hour price, have struggled to find buyers for their power.
Bluewater has small power-purchase commitments from municipal governments in Delaware and Maryland in addition to Delmarva Power, but has been unable to sign up other buyers so the farm could be significantly enlarged to improve its viability.
Buying offshore wind is one way for utilities to satisfy green-energy purchase mandates, like Delaware's, which requires them to have 25 percent renewable power by 2025.
Pat Gearity, a former Delaware clean power activist who now lives in North Carolina, said NRG and its industry allies should be held responsible for the demise of the wind farm if they don't do everything they can to pressure government to restore the gutted programs.
Jim Lanard, president of the Offshore Wind Development Coalition, said the scaling back of the loan guarantee program "creates an extra hurdle for the industry to overcome."
But, he said, developers are bullish on the future, noting that 20 firms are expected to bid on a federal call for interest to build off New Jersey. That state created an offshore wind power purchase requirement for utilities that could make it easier for developers to finance their projects.
"The industry is alive and well and it's growing," Lanard said.