The U.S. offshore wind industry continues to mature, but for now developers, utilities, and investors should expect lengthy interconnection processes and high costs when planning their offshore wind projects, say members of Mayer Brown’s global projects and infrastructure group. They explain the basics and what to consider.
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The New Jersey Board of Public Utilities (NJBPU) announced that its third solicitation with a capacity target of 1,200 megawatts for New Jersey’s offshore wind (OSW) development will now be released by January 2023, instead of the previously announced September 2022 date, to account for its ongoing transmission-planning efforts.

NJBPU’s updated timeline takes into consideration New Jersey’s ongoing offshore “coordinated transmission solution” efforts. In January 2021, PJM Interconnection, L.L.C. (PJM) filed with the Federal Energy Regulatory Commission (FERC) for approval of a study agreement that would begin the implementation of a State Agreement Approach (SAA) to explore new collaborative frameworks to advance offshore wind energy and enable New Jersey’s offshore wind goals to be incorporated into the PJM transmission-planning process. Under the SAA, PJM and the NJBPU asked developers to “propose the optimal mix of onshore and offshore transmission facilities that provide the most economically efficient and reliable way of delivering power from offshore wind turbines to New Jersey customers.”1 Developers were asked to propose:

Read more about our research and conclusions here:

https://www.mayerbrown.com/en/perspectives-events/publications/2022/03/new-jersey-delays-its-next-offshore-wind-solicitation-for-transmission-planning

 

In its recently released 76-page report, required under President Biden’s Executive Order 14017, “America’s Supply Chains,” the US Department of Energy (DOE) finds that “[t]he opportunity for US global leadership on clean energy is enormous” but the related “challenges are immense” and relate to:

  • raw material availability
  • manufacturing capacity
  • dependence on foreign supplies
  • worker training
  • global trade practices
  • cybersecurity
  • research and data analysis needed

Read more about our research and conclusions here:

https://www.mayerbrown.com/en/perspectives-events/publications/2022/03/us-doe-clean-energy-supply-chain-poses-immense-challenges-but-offers-enormous-opportunity

On January 13, 2022, the US Department of Energy (DOE) issued a notice of intent regarding its Building a Better Grid Initiative (Initiative), an effort to encourage the modernization of the nation’s existing electric transmission grid. The Initiative is the beginning of a rulemaking process required by the Infrastructure Investment and Jobs Act (Act), which President Biden signed into law late last year. The Act funds various investments in energy infrastructure, but its energy-related provisions are generally not self-implementing.1 Instead, executive agencies such as DOE are directed to commence implementation rulemaking proceedings to further clarify how the authority and funding provided by the Act will be used and allocated. The DOE notice issued as part of the Initiative is both preliminary and general in nature, and, unlike a formal notice of proposed rulemaking, it does not set forth proposed regulatory text.

Read more about our research and conclusions here:

https://www.mayerbrown.com/en/perspectives-events/publications/2022/01/jolting-the-grid-us-doe-begins-implementing-bipartisan-infrastructure-bill

 

 

Allocations of $615 million in funds for electric vehicle (EV) infrastructure in the US under the National Electric Vehicle Infrastructure Formula Program moved forward with recent publications from the US Department of Transportation (DOT). The funds will be allocated on a state-by-state basis—with some receiving far more than others—but the first step will be for each state to propose a plan for its allocated share of funds. States must submit an EV Infrastructure Deployment Plan to the Joint Office of Energy and Transportation by August 1, 2022, to be eligible for funding. This Legal Update provides further detail.

Read more about our research and conclusions here:

https://www.mayerbrown.com/en/perspectives-events/publications/2022/03/us-dot-allocates-615-million-for-ev-charging-station-networks

From February 23–25, 2022, the Bureau of Ocean Energy Management (BOEM) held a competitive auction for six lease areas in the New York Bight area off the coast of New York and New Jersey. After the first day of the auction, it was already the biggest offshore wind lease sale in the United States with over $1.51 billion in bids and 13 bidders remaining. After an exciting day two, there was over $3.35 billion in bids and 12 bidders remaining. On day three, the auction finally concluded after 64 rounds with over $4.37 billion in bids, and BOEM announced the provisional auction winners for each of the six lease areas. View the winners and further details in this Legal Update.

Read more about our research and conclusions here:

https://www.mayerbrown.com/en/perspectives-events/publications/2022/02/us-boem-announces-provisional-winners-of-massive-offshore-wind-auction

Offshore wind is an energy generation source that has seen explosive global growth over the past decade. The offshore wind industry in the US has been developing at a more measured pace but had a landmark year in 2021, and we expect the same for 2022. Our Year in Review highlights the major US offshore wind energy milestones in 2021, the offshore wind projects that are underway and the status of state incentive programs.

Read more about our research and conclusions here:

https://www.mayerbrown.com/en/perspectives-events/publications/2022/02/us-offshore-wind-development-2021-year-in-review-and-looking-ahead

On February 1, 2022, Louisiana Governor John Bel Edwards’ Climate Initiatives Task Force submitted its 177-page Climate Action Plan, which proposes a goal of 5 gigawatts (GW) of offshore wind (OSW) power generation by 2035 and notes that:

[T]his goal requires strategic collaboration across Louisiana state agencies and the federal government, transmission planning agencies, energy regulators, utilities, and the private sector to take additional steps to advance the development of offshore wind power generation. To spur large-scale, responsible development of this energy resource, efforts should prioritize early and repeated stakeholder outreach, strategic planning for anticipated transmission and workforce needs, and improving the understanding of potential environmental and social impacts and opportunities to avoid, address, or capitalize on them.

The Climate Action Plan also notes that, according to a 2020 report by the National Renewable Energy Laboratory, Louisiana ranks fourth in state offshore technical wind potential in the Gulf of Mexico, with over 200 GW of wind potential split almost equally between fixed-bottom OSW systems and floating OSW systems.

Read more about our research and conclusions here:

https://www.mayerbrown.com/en/perspectives-events/publications/2022/02/louisiana-proposes-5-gw-of-offshore-wind-for-gulf-of-mexico

On January 12, 2022, the Bureau of Ocean Energy Management (BOEM) announced that it will hold a competitive auction for six lease areas (totaling roughly 488,000 acres) in the New York Bight area, which is off the coast of New York and New Jersey. Twenty-five bidders are eligible to participate, which is up from the 11 that were announced as qualified in BOEM’s Proposed Sale Notice. The ascending bidding auction will take place on February 23, 2022, and is estimated to last one to two business days. The minimum bid for each lease area will begin at $100 per acre, with the minimum price of the six lease areas ranging from approximately $4.3 million to $12.6 million. The auction will proceed in rounds with incremental price increases until no more than one active bidder remains for each of the six lease areas. Each bidder is limited to winning one lease, and BOEM will announce provisional winners at the end of the auction.

Changes in the Final Sale Notice

Areas Offered

Read more about our research and conclusions here:

https://www.mayerbrown.com/en/perspectives-events/publications/2022/01/us-boem-announces-massive-offshore-wind-auction-and-much-more

On January 5, 2022, as part of the 2022 State of the State, New York Governor Kathy Hochul announced new investments and a plan to advance offshore wind energy development off the coast of New York. Governor Hochul announced that the state will make a $500 million investment to support ports, manufacturing and supply chain infrastructure to advance its offshore wind industry. Coupled with the investment, Governor Hochul announced an offshore wind plan with the following actions:

Read more about our research and conclusions here:

https://www.mayerbrown.com/en/perspectives-events/publications/2022/01/ny-announces-500-million-offshore-wind-investment-and-2022-procurement