Does Vineyard Wind's approval signal a true paradigm shift for U.S. offshore wind?
11 May 2021. That’s the day the Department of Interior announced the long-awaited final approval of the Vineyard Wind 1 project, now officially on track to become the first large-scale offshore wind farm in the U.S.
Approval of the 800 MW offshore wind project, to be built approximately 15 miles south of Martha’s Vineyard, has been touted as a watershed moment for the nation’s offshore wind sector, and the repositioning of the U.S. as a major player in the trillion-dollar global offshore industry.
But can the momentum be sustained?
“I think maybe it’s a little too early to tell whether this becomes the true paradigm shift, but I think the momentum that we’re seeing in the moment--and it really comes out of the change in administration and the focus that they've had on decarbonization--seems to me to be pretty sustained,” Joel Johnston, an attorney with Hall Estill, told NPM. “One of the biggest hurdles that wind developers have faced, aside from NIMBY and technology issues, has been this federal permitting issue. And given that we’re now seeing BOEM move forward and start approving some of these, I think that it has the very real prospect of not being an overstatement.”
The path forward for large-scale offshore wind projects may largely hinge on compromise. After major pushback from Rhode Island commercial fishing groups threatened to stymie the project, Vineyard struck a USD 16.7m deal to mitigate potential impacts from the wind farm. The mitigation package includes the creation of a USD 12.5m trust fund, to be funded by five annual payments of USD 2.5m from Vineyard.
“In this particular project, there were issues the developer had to compromise on with the fisheries in Rhode Island,” Johnston said. “I think those issues will continue to have a pretty big impact.”
Since 2017, the Vineyard project has suffered myriad delays, navigating an exhaustive review process that generated more than 30,000 public comments. In addition, the project’s Construction and Operations Plan (COP) was reviewed by more than two dozen federal, state and local agencies over the course of nearly four years.
But the regulatory hurdles are largely seen as necessary evils in positioning the next phase of the nation's offshore wind industry for future, accelerated growth.
“As attorneys that work on these big infrastructure projects, we’re always looking for rule changes or rule interpretations that create some certainty and clarity in terms of how an agency is going to handle a permitting process,” Johnston said. “I think as these projects develop, we’re going to realize what the pinch points are. Do these projects really have an impact on the fisheries, do they cause an impact with flight lines with airports? You could go on and on and think of all the myriad places where there might be two parties that rub in the opposite way on these complicated issues with these big offshore developments. I think that we’re going to see the rules and regulations continue to be modified to facilitate these sorts of projects.”
Local resistance
It was early in 2019 when the Vineyard Wind project received final certification of its Environmental Impact Report (EIR) from the Massachusetts Office of Energy and Environmental Affairs. The state review, which began in April 2018, included an extended public comment period and supplemental filings after the project was awarded a contract to sell 800 MW to Massachusetts public utilities.
The Massachusetts Environmental Policy Act Office (MEPA) later issued its final certification to the wind project in February 2019, authorizing Vineyard to seek state and local permits.
That’s when the real challenges began, starting with a local conservation commission in the summer of 2019, which nixed a key permit for two 400 MW buried export cables one mile off Chappaquiddick from the wind farm to a site in Barnstable. And the hits kept coming.
“Certainly every locality has its own unique flavor and bent politically and everything else,” Johnston said. “If I were looking at my crystal ball, I think that we’re going to see that some of these projects will move further offshore. The technology is getting to be such that they can do that, and so I think that some of the local piece gets a little bit removed.”
Developers and investors are increasingly eyeing projections that indicate the deployment of floating wind technology at utility scale as early as 2024. Approximately 25 percent of the nation's offshore wind capacity is slated to come from floating turbines by 2035, spurred on by the promise of better winds and the mitigation of NIMBY pushback.
“As these projects become more mature, as the permitting becomes more certain in terms of what the developers have to do, there are certainly some projects that are going to get pushback from environmental NGOs and others,” Johnston said. “There are going to be projects that are going to get resistance from perhaps people that generally support wind development. There’s going to be projects that are going to get resistance from communities where folks don't want to look off their deck and see a big turbine out in the water. And I think that's always a risk.”
But as the permitting process gets increasingly tested and challenged, developers will also learn how to better navigate project development, beginning at the local level and moving through state and federal approvals.
“There’s going to be a good contour that will at least help developers understand, that, for example, maybe that's not the best place to put that project because of local or state considerations,” Johnston said. “ These are big industrial developments, and the fact is that they have an impact, regardless of whether it’s less than oil and gas or nuclear and coal.”
A path forward
The Biden administration has taken several major actions on offshore wind, including the announcement of new wind lease areas in the New York Bight, an accelerated review process for Orsted's Ocean Wind project, and commitments of major investments in port infrastructure.
The issuance of Vineyard Wind’s Record of Decision is seen as the latest promise kept, and a critical part of the Biden Administration’s target of deploying 30 GW of offshore wind by 2030.
The proposal is expected to bring in new investors eager to support the buildout of a local U.S. supply chain. In its 2021 Market Report, the Business Network for Offshore Wind (BNOW) identified 418 contracts nationwide, including 51 involving the Vineyard Wind project, and USD 3.6bn in public and private investments--all prior to approval of any U.S. commercial-scale offshore wind projects. Over the last several months, the number of contracts has swelled to over 500.
“I think the reality is that when you’ve got a new industry like this and there’s been a regulatory permitting roadblock, once somebody figures out how to navigate it, and once an agency clearly takes up a priority to help folks get through that process, I think that gets a lot of people excited that this is now a viable path,” Johnston said. “Once somebody actually has crafted a path forward to approval and development, it gets easier. Now that there’s a known path forward, especially with the industry pushing on this, that’s going to continue, and I would expect the drumbeat to get louder. The Biden administration has put out some pretty strong climate mitigation strategies, so I think we’re going to see projects coming forward. I would expect an increase in clip, especially with the climate goals.”