OVERCOMING KEY BARRIERS TO OFFSHORE WIND DEVELOPMENT IN THE NORTHEAST

Transcription

1 OVERCOMING KEY BARRIERS TO OFFSHORE WIND DEVELOPMENT IN THE NORTHEAST Michael Ernst, Esq, Director of Regulatory Affairs Pace Law School & Environmental Review White Plains, NY March 2, 2012

2 Introduction to Tetra Tech Tetra Tech, Inc. Founded in 1966 Publicly traded on NASDAQ (TTEK) FY 2010 Revenues - $2.2 billion. More than 12,000 employees in 330 offices worldwide. Ranked #1 Wind Development Consulting Firm in 2010 and Top 10 Environmental Firms by Engineering News Record Full-Service Firm Providing Integrated Services Consulting (Siting, Surveys, Permitting), Engineering & Construction Supported Development of over 1000 Energy Projects last decade Supporting 450 wind projects totaling 22,000 MW Supporting 65 utility scale solar projects 30 Energy Construction projects 2500 MW and $500 M Siting & Permitting 10 Offshore Wind Farms Atlantic Coast: Maine, Rhode Island, MA, NY, NJ, DE, MD, VA Lakes Erie & Michigan

3 Outline of Presentation Offshore Wind Resource for Coastal States & New York Federal Offshore Wind Leasing Process Identify Wind Energy Areas/Environmental Assessments Requests for Information & Lease Block Nominations Competitive Bidding or Non-Competitive Process Site Assessment Plan (Surveys) & Construction & Operations Plan Offshore Submarine Cables Leasing Proposed Cables Federal & State Approvals Environmental, Legal, Technical & Financial Challenges Policies to Overcome Challenges Status of Northeast Leasing MA, RI, NJ, NY

4 Introduction to Offshore Wind Resource Wind Power Classification Wind Power Class Resource Potential Wind Power Density at 50 m W/m 2 a Wind Speed at 50 m m/s a Wind Speed at 50 m mph a Fair Good Excellent Outstanding Superb Wind speeds are based on a Weibull k value of

5 New York Offshore Wind Resource Renewable Portfolio Std: 24% by 2013 X MWs?? Long Island Power Authority RFP 2001?? Cancelled: Rising Costs NYPA Great Lakes RFP 2008?? RFP: 3 Bidder Interviews Postponed: High Costs LIPA All Resource RFP 2010?? Deepwater proposes cable from Rhode Island Wind Farm Cable interconnection to Mass. LIPA, Con Ed, NYPA Unsolicited Lease Nomination off Long Island [Add MAP=>

6 New York Offshore Wind Proposals Renewable Portfolio Std: 24% by 2013 or about 8000 MWs Long Island Power Authority RFP 2004 Costs rose to 29 c/kwh NYPA Great Lakes RFP 2009 RFP: 3 Bidder Interviews Postponed: High Costs LIPA All Resource RFP 2010 Deepwater proposes cable from Rhode Island Wind Farm Cable interconnection to Mass. NYPA, LIPA, Con Ed 2011 Unsolicited Lease Nomination 13M off Long Island NYPA 2011 Site Nomination =>

7 Alternative Energy Rulemaking EPACT 2005 directs issuance of rules within 270 days Programmatic EIS: May 2005 December pages of analysis plus appendices PEIS Conclusion: In general, most impacts would be negligible to moderate for all phases of wind energy development assuming that proper siting and mitigation measures are followed. Notice of Proposed Rulemaking: July 9, 2008 Tetra Tech helped draft AWEA Offshore Wind Working Group comments on Draft Rule to reduce proposed 3 Environmental Impact Statements Final Rule June 29, 2009 (233 pages in Federal Register) Minerals Management Service acknowledged final lease process may take 5-7 years or more due to 2 EISs Negotiations with MMS, lead NEPA agency, in late 2009 to reduce length of process consistent with NEPA and other federal laws: Level of NEPA review commensurate with likely environmental impacts Offshore Wind Development Coalition meetings with DOI and BOEMRE on more streamlining of process in January, March & April 2011 BOEM Smart from the Start Program: BOEM EA for Site Assessment

8 BOEM Lease Process State Task Forces Identify Area of Interest or Wind Energy Area (WEA) Request For Interest (RFI) Call for Information (Call) Determination of Competitive Interest Lease issued for site assessment Site Assessment Plan (SAP) & Surveys Construction & Operations Plan (COP) File Permit Applications NEPA Review Draft EIS (Third Party Contractor) Final EIS Record of Decision COP approved Certified Verification Agent approves Design & Construction Plans aka a Final

9 Request for Interest Request for Interest Process State Task Force Sets Area of Interest State Constraint Analyses & Meetings Request for Interest Nominations for specific lease blocks Demonstrate Legal, Technical & Financial Qualifications Public comments on any concerns Call for Nominations & Information Environmental Assessment for Site Surveys Determination of Competitive Interest Geographic overlap of nominated sites Total nominated capacity exceeds maximum target state s If either, initiate Competitive Process Delaware Constraints Map

10 Competitive Interest Process Competitive Interest Process Call for Information & Nominations Area Identification by BOEM after State Input NEPA Review & Coastal Zone Management Act Consistency Determination Proposed Sale Notice & 60-day Comments Final Sale Notice Competitive Auction Process Options: Sealed bidding Ascending bidding Two-stage bidding Multifactor bidding (30 CFR ) Bid Evaluation Issuance of Lease

11 Site Assessment Plan Survey Plan Development Per the BOEM Rules, the SAP or GAP must: Describe the survey activities proposed to characterize the development area; Demonstrate how site assessment activities will collect the necessary information and data required for the COP filing; and Show how the developer will comply with all relevant Federal statutes when conducting survey activities. The following 5 offshore site assessment surveys will play an integral part of offshore wind facility siting, planning, permitting, construction and operation. Avian and Bat Surveys Marine Mammal and Sea Turtle Surveys Geological, Geophysical and Hazard Surveys Marine Cultural Resource Surveys; and Benthic Surveys Each survey plan should be developed in close coordination with resource agencies of concern before implementation. Regional Environmental Assessments will reduce study & review requirements for standard surveys

12 Construction & Operations Plan BOEM COP Regs & Guidelines (30 CFR ) Site Investigation Report - Survey Results (shallow hazards, geological, geotechnical, biological, archeological) Construction & operation concept Compliance with Lease Stipulations Interconnection cables and power lines Decommissioning Plan Mitigation Measures List of Federal, State & Local Approvals NEPA Compliance Analysis Oil Spill Response Plan Safety Management System

13 Offshore Submarine Cables to Interconnect Renewable Projects to Grid BOEM Regulations for Cable Associated with Offshore Wind Farm A commercial lease will confer the right to a project easement to install on the OCS gathering, transmission, and distribution cables 30 CFR (b) Preliminary transmission plans submitted with the Construction & Operations Plan (COP) or General Activities Plan (GAP) Terms and conditions for the project easement will be issued by BOEM in an addendum to the lease

14 Offshore Cables for Renewable Projects Regulations for Independent Cable to Transmit Offshore Renewable Energy BOEM will issue ROW grants to allow for the construction and use of a cable or pipeline for the purpose of gathering, transmitting, distributing, or otherwise transporting electricity generated or produced from renewable energy not generated on a lease issued under this part. Final Rule, 74 Federal Register 19647; (a). BOEM will consider on a case-by-case basis, renewable energy ROWs supporting the transmission of energy from oil or gas sources that is combined with energy from sources other than oil or gas, provided that renewable energy generated from sources other than oil and gas is primarily what is being transmitted. 74 Fed Register Application for ROW (200 foot width plus area necessary for substation(s) Competitive Interest Determination General Activities Plan & NEPA Review Atlantic Wind Connection filed ROW Request with BOEM March 2011

15 Offshore Submarine Cable Backbone Atlantic Wind Connection 6000 MW HVDC Cable Interconnections in NY, NJ, DE & VA Filed application for lease & GAP at BOEM in March 2011 Competitive Interest Notice Deepwater Wind Cable Rhode Island Sound Wind Farm Cable to Long Island Mass. RFI 2 Cable Bids Dominion Resources Study Virginia Cable Study multiple wind farms Delaware Atlantic Coast Weather Study Great Lakes Cable Backbones? Lake Erie Canada & US interconnections

16 Major Federal, State & Local Approvals Federal, state and local approvals and consultations for the project will include but not be limited to: CZMA Consistency Determination for SAP and COP (NY Dept. of State) NOAA Letter of Concurrence to support Geophysical surveys activities USACE Section 10/404 Permit EPA Air Permit (construction vessel emissions) NOAA Incidental Harassment Authorization/Incidental Take (IHA/ITS) Permits under ESA and Marine Mammals Protection Act USFW Consultation and possible Incidental Take Permit under ESA for Eagles or EFH for endangered species, and Migratory Bird Treaty Act Advisory Council on Historic Preservation & SHPO Consultation under NHPA Dept. of Defense Consultation for military practice areas and defense radar USCG Private Aid to Navigation (PATON) and Local Notice to Mariners (LNM) Article VII CPCN from NY PSC (no Article X jurisdiction out of state) Submerged Lands Easement (NY Office of General Services) NY DEP: Art.XV Protection of Waters Permit, Tidal and Freshwater Wetlands Permits, Coastal Erosion Permit, 401 Water Quality Certification, NPDES Stormwater Construction Permit NYSDOT Highway Construction Permit Local zoning and building code approvals for interconnections & substations

17 Hydrokinetic Projects BOEM must first issue a lease, easement or Rightof-Way FERC may then issue a license to construct and operate March 2009 Memorandum of Understanding FERC & BOEM

18 Environmental Challenges Significant Environmental Issues Birds & Bats USF&W wants 3 yr studies Commercial Fishermen oppose any infringement of fishing grounds or spawning areas Marine mammals Collision risk during construction Icing in Great Lakes Collision with floating icebergs Cultural Issues Native American historic sites Radar Interference for DOD security, aircraft, weather Shipping routes: adequate buffer zones, warning devices Visibility from Sensitive Viewpoints on Shoreline

19 Overcoming Environmental Challenges Significant Environmental Issues Birds & Bats 3 years of pre-construction studies + post construction Commercial Fishing Avoid or accommodate within wind park Marine Mammal Construction warning systems Icing Foundation skirts & equipment protection Cultural Issues Archeological studies GGARCH Guidelines Radar Interference Negotiate with other agencies Shipping routes Negotiate navigation buffers & warning devices Visibility from Sensitive Viewpoints Minimize by siting further offshore

20 Legal & Technical Challenges Permitting Process First projects & impacts reviewed under current laws which did not anticipate offshore wind projects & interconnections New Legislation must be enacted & then new regulations Transmission Interconnections Sensitive coastal habitat: tidal and freshwater wetlands Inadequate capacity of shoreline grid along most shores Michigan Study: ~$200 Million for new lines & upgrades in U.P. New lines will be needed after initial offshore wind parks ISO-NE, MISO & PJM policy requires new generator to pay for interconnections and grid upgrades

21 Overcoming Legal & Technical Challenges Permitting Process Negotiate coordinated and streamlined siting under current and new laws NY Joint Application Expedite enactment of new legislation & drafting new rules Transmission Interconnections Study and Subsidize Grid Upgrades FERC 1000: ISOs must consider renewable policies in regional transmission planning & cost allocation Proposed offshore submarine cable backbones Atlantic Wind Connection (NJ to VA, initially) Deepwater Rhode Island Sound to Long Island New Integration Technologies: Energy Storage

22 Offshore Wind Financial Challenges Total Offshore Wind Development Costs Construction of Offshore Foundations with Special Vessels European Supply Chain for Turbines & Cables European Construction Expertise for Turbines & Cables Production & Investment Tax Credits Short Term Expiring 2012 U.S. Offshore Wind Project Prices Fishermen s Energy Atlantic City Pilot (20 MW) NJ BPU denies ORECs at ~30 cents/kwh Deepwater Block Island Rhode Island Pilot (30 MW) Legislative Act to override RIPUC rejection at 24.4 cents/kwh Cape Wind, Cape Cod (454 MW) Legislative Mandate & Merger Settlement to sell 77% at 18.7 cents/kwh

23 Overcoming Financial Challenges Offshore Wind Development Cost Savings Manufacture Turbines, Components, Cables in U.S. Manufacturing Tax Credits Offshore Submarine Cable Backbone for Many Wind Farms Construct U.S. Construction Vessels; Train U.S. Crews Extend Production & Investment Tax Credits Competitive Long Term Contract RFPs Broad Net Benefits Standard of Review for PPA for PUC OKs Increase Ocean Renewable Energy Credits (ORECs-NJ) Federal and State Loan Guarantees Federal and State Low Interest Loans Accelerated Depreciation Federal R&D (foundations; turbines, e.g.,floating) Future U.S. Offshore Wind Project Prices Deepwater projects low teens/kwh for 1000 MW wind farms DOE & U.Maine project 10 cents/kwh by 2030

24 Statoil Floating Wind Turbine Hywind Maine Hollow Cylinder seawater & sand Siemens 2.3 MW Turbine 2 years off Norway at 50% capacity Maine Pilot: 4 Siemens 3 MW 23 miles offshore 500 feet deep

25 Questions??? Contact Info: Michael Ernst, Esq. Director, Regulatory Affairs Tetra Tech Energy Program Federal Street Suite 300 Boston, MA 02110

26 Overcoming Challenges: Cross Sound Cable CT-NY 25 Mile Submarine Cable connecting New Haven, CT to Shoreham, NY 4 Shellfishermen asked for $8 million for minor, temporary impacts CT Attorney General became interested and then outspoken opponent CT Siting Board rejected initial project route Army Corps agrees to Permit 1 st Cable under Fed Navigation Channel CT Siting Board approves new route and mitigation Unanticipated Bedrock Prevents Full Compliance with Permits Negotiated Settlement with Shellfishermen then State Officials State lawsuit, DOE Order, FERC Application, partial reburial: $25M 4 yrs LESSONS: Appropriate siting and thorough initial and final environmental analyses Early PR & Education Campaign for public officials, stakeholders, public Negotiate settlement with well-funded opposition early Negotiate sufficient community compensation in PILOT agreement early

27 Massachusetts Cape Wind Cape Wind USACE Application 2001 BOEM FEIS, Lease & Construction & Ops Plan MA Energy Facilities Siting Bd Approved interconnection Chapter 91 Tidelands License Development of Regional Impact (Cape Cod Com n) Barnstable & Yarmouth OKs Environmental Impact Report Appeal to State Supreme Court Challenge to delegation of DEP Chap.91 authority to EFSC Appeal denied

28 Massachusetts BOEM Call BOEM Request for Information Dec Bids for leases >2,000 sq. naut. miles Commercial fishermen objected: => 1,000 miles Call for Nominations February 2012 Competitive process 2013

29 Rhode Island Special Area Management Plan (SAMP) RI-MA Area of Mutual Interest 2 Unsolicited Nominations Deepwater Wind Neptune LLC Both Qualified Call for Nominations February 23, 2012 Competitive Process? BOEM Wind Energy Area

30 New Jersey BPU RFP 3Bidders BOEM Call Nominations and Comments due June 6 Ocean RECs for 1100 MW Barrier Beaches Pinelands CAFRA [NEW MAP OF WEA]