As Maryland’s population grows, so do its energy needs. In fact, PJM Interconnection, the regional transmission organization that coordinates the movement of wholesale electricity, has warned that the state could soon face rolling blackouts. To address the need for more electric power generation while safeguarding public health and the environment, the state turned to renewable energy. In 2008, Maryland revised its RPS, raising the state’s RPS goal from 7 percent to 22 percent by 2020. An assessment of renewable technologies revealed that the only in-state renewable resource able to meet a significant portion of the RPS goal was offshore wind. A flurry of offshore wind planning activity followed, involving several state agencies, nonprofits, and universities.
In 2009, the state analyzed its offshore wind potential. The Maryland Energy Administration (MEA) recommended that the state allocate resources to help developers overcome high capital costs and that it address its regulatory framework related to offshore wind. MEA collected information from wind developers interested in constructing an offshore wind project off its coast. MEA, the Maryland Department of Natural Resources, and the Nature Conservancy began marine spatial planning, including the creation of support tools to understand the characteristics of Maryland’s offshore resources and potential conflicts. In conjunction with these efforts, MEA engaged in broad stakeholder outreach to gain early feedback.
Making the Case for Offshore Wind
As it became apparent that the most scalable renewable resource lay in Maryland’s offshore waters, political momentum was needed to support policy development. Armed with data compiled by the U.S. Department of Energy, the University of Maryland, and consultants, MEA worked to gain the Governor’s support to further ocean energy planning and analysis. A federal Bureau of Ocean Energy Management task force was formed at the state’s request in early 2010; later that year, BOEM and MEA released a request for information for offshore wind development to gauge industry interest in commercial development on the outer continental shelf.
It took three years before an offshore bill passed in the legislature. Governor Martin O’Malley’s Administration and MEA worked with legislators to craft the Maryland Offshore Wind Energy Act of 2013. The legislation created an offshore wind carve-out in the state’s RPS of up to 2.5 percent of total retail electricity sales in the state. The carve-out will create Offshore Wind Renewable Energy Credits (ORECs) —tradable certificates that utilities can use to comply with the legislation. Consumer safeguards in the legislation ensure that the impact on electricity rates will not exceed $1.58 per month for the average residential customer and that the price of ORECs will not exceed $190 per megawatt-hour. The Act has encouraged developers and manufacturers to invest in offshore wind, the supply chain, and associated infrastructure.
A critical voice in moving the offshore wind bill through the legislature was the Business Network for Offshore Wind, a Maryland business coalition that has since been proactive in providing leadership and support for the fledgling offshore wind industry. It works closely with state government to build a local offshore wind supply chain and develop a skilled offshore wind workforce. Last November, with financial support from MEA and others, the Business Network organized a three-day international offshore partnering forum at which European and American businesses, government agencies, technical experts, universities, and advocates gathered to address the needs in local services and products for projects off the coast of Maryland. According to Ross Tyler, MEA’s offshore wind advisor, “Maryland has been saying from the start that having a partnership with local stakeholders and transferring technical knowledge from Europe are essential.”
Wind in its Sails
With the passage of the Act, MEA partnered with academic institutions, other government agencies, and the business community to commission environmental and geophysical studies, evaluate local supply chain opportunities, survey Maryland’s existing infrastructure, and look at the economic and workforce development opportunities. MEA has led three overseas delegations, the largest of which contained 28 participants, including a consortium of four Maryland companies and several state senators. While overseas the group made presentations to turbine manufacturers and has a formal MOU with the country of Denmark to partner on technology, best practices, and deployment. Ross Tyler notes that the presence of the senators carried substantial weight and signified Maryland’s commitment to growing the industry. MEA was the only state presenting at the last European Wind Energy Association’s annual offshore wind event in Copenhagen.
Maryland’s proactive efforts in building European partnerships, establishing a domestic supply chain, and passing enabling legislation seem to be paying off. With the recent federal sale of a wind lease area to US Wind Inc., to develop a major project in the Wind Energy Area off the Maryland coast, Maryland now has the wind in its sails to develop one of the first U.S. commercial-sized offshore wind projects.
This blog post was originally published in the Clean Energy States Alliance (CESA)’s 2015 report “Clean Energy Champions: The Importance of State Policies and Programs.” This report provides the first-ever comprehensive look at the ways states are advancing clean energy and suggests how to further encourage clean energy growth. For more information about CESA, please visit www.cesa.org.