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US again pushes back decision on 1st offshore wind farm

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Essential Energy Insights - September 17, 2020

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US again pushes back decision on 1st offshore wind farm

The U.S. Bureau of Ocean Energy Management has again pushed back the date for releasing a decision on whether to approve the proposed 800-MW Vineyard Offshore Wind Project.

The bureau, or BOEM, an agency within the U.S. Interior Department, said it will release its decision Jan. 15, about a month later than expected. The project, located roughly 15 miles off Martha's Vineyard, would be the first of its kind in federal waters.

BOEM also pushed back the November date for publishing its supplemental environmental impact statement for the project, which is a joint venture of Avangrid Inc. subsidiary Avangrid Renewables LLC and Copenhagen Infrastructure Partners K/S. Avangrid is a subsidiary of Iberdrola SA of Spain.

A spokesperson for BOEM in an email said the agency "received more than 13,000 comments on the Supplemental Environmental Impact Statement for Vineyard Wind." The public comment period closed in July. "BOEM continues to work with cooperating agencies in the review of these comments," the spokesperson said.

BOEM's record of decision, which will state whether it denies the project a permit, approves it or approves it with modifications, is the last major hurdle Vineyard Wind needs to overcome to begin construction.

Deadlines in jeopardy

This is not the first time BOEM has extended its permitting timeline on the project as it figures out how to regulate the fledgling industry. Under its original timeline, BOEM was scheduled to make a permitting decision in August of 2019. But the agency decided to conduct a more rigorous review as states planned to build more such projects along the heavily trafficked Eastern Seaboard. East Coast states are planning for up to 30 GW of offshore wind capacity by 2035. The commercial fishing industry has been particularly vocal in its opposition to offshore wind, though supporters of the Vineyard Wind project say an overwhelming majority of the thousands of commenters voiced support.

Renewable energy attorney Keith Martin, co-head of projects for Norton Rose Fulbright, in a Nov. 18 email said that such delays could threaten deadlines in power purchase agreements for U.S. offshore projects to reach commercial operation.

"The delays also complicate the ability of projects to qualify for federal tax credits," Martin said. "Many of them are considered already under construction for tax purposes, but they must be finished within four years after construction started to be able to claim tax credits. The delays make this hard to do."

Vineyard Wind officials and industry trade groups, though, characterized the delay as minor.

Andrew Doba, spokesman for Vineyard Wind, in an email said that "minor delays like this are not uncommon and we look forward to publication of the [supplemental environmental impact statement] on December 11th."

"We are confident that we'll be able to make the investment decision by mid-2021 as planned and deliver the project in the announced time frame," Doba said.

Tom Kiernan, CEO of the American Wind Energy Association, in a Nov. 18 interview said that, while "we respect the need to look at offshore wind energy off the East Coast in a comprehensive way," the government's decisions "are delaying billions of dollars of investment by the industry and tens of thousands of jobs."

Martin, the project finance lawyer, said, "The hope is that construction permits will finally start being issued once Biden takes office."

"These are $3 to $6 billion projects," Martin added. "They can make an important contribution to helping the US economy get back on its feet."