Recent Congressional motion extends tax credit, attain of “Jones Act”

by David Cole, Debra Duncan, Shay Kuperman, John Michael, and Danielle Patterson at Vinson & Elkins L.L.P.

Today, the U.S. has one offshore wind undertaking in industrial operation – the 30-megawatt Block Island Wind Farm off the coast of Rhode Island – however there are greater than a dozen main offshore wind tasks in numerous levels of growth throughout the U.S.  These tasks have the potential to offer hundreds of jobs within the U.S. and a big quantity of fresh, dependable vitality to lots of the nation’s greatest cities, given the proximity that the offshore wind installations must coastal inhabitants facilities.    

The U.S. has lengthy been a frontrunner in onshore wind expertise, and now, by extension, there may be an rising offshore wind business.  Offshore winds are thought-about by many business observers to be considerable, sturdy, and extra constant in pressure than onshore winds.  The “price of vitality” for offshore wind tasks has additionally continued to lower steadily, which has elevated the competitiveness of offshore wind when in comparison with different vitality sources. 

The offshore oil and fuel business has performed a key function within the early growth of U.S. offshore wind tasks.  Design engineers, gear suppliers, fabricators, and vessel operators who historically service the offshore oil and fuel business had been concerned in creating the Block Island Wind Farm and are additionally concerned within the new tasks beneath growth.  The collective expertise with U.S. offshore oil and fuel tasks readily interprets to offshore wind tasks, which current lots of the similar operational, industrial, and authorized points and challenges.

Set forth beneath are 4 key elements to think about in reference to the event of a U.S. offshore wind undertaking, every of which may affect the price and scheduling of a undertaking. 

1: Lengthy Permitting Process

In the U.S., offshore wind tasks could also be sited in both state or federal waters.  State waters prolong three nautical miles from the respective state’s shoreline (for Texas and the Gulf Coast of Florida, the respective state waters prolong out 9 nautical miles), and federal waters then prolong from the outer boundaries of state waters to 200 nautical miles from shore. 

Offshore wind installations wholly sited inside state waters are topic to state rules and are, subsequently, typically not required to undergo the federal allowing course of.  Offshore wind installations sited in federal waters fall beneath the purview of the Bureau of Ocean Energy Management (BOEM), an company throughout the U.S. Department of the Interior. BOEM is charged with issuing leases for areas inside federal waters which might be appropriate for offshore wind tasks, in addition to reviewing, approving, and allowing any proposed tasks throughout the leased space. 

Once BOEM has awarded a lease, for every offshore wind set up that the leaseholder proposes, the leaseholder should submit a website evaluation plan, and later, a development and operations plan, to BOEM for assessment and approval.  Part of the BOEM approval course of is the preparation of an Environmental Impact Statement to evaluate the bodily, organic, and social impacts of the proposed offshore wind undertaking and all cheap options (together with another that the undertaking not be pursued), and any proposed mitigation.

Due to the regulatory panorama within the U.S., the allowing course of to-date has been gradual and prolonged, and has been considered as a limitation on the event of the nation’s offshore wind assets.  As of January 2021, BOEM has issued 16 leases for areas inside federal waters to builders and has acquired development and operations plans for 10 U.S. offshore wind tasks from the builders.  However, BOEM has up to now solely totally authorized one undertaking.  Several business observers anticipate the Biden Administration to hunt to streamline the allowing course of for U.S. offshore wind tasks. 

2: Availability of…

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