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Resort area prepares for approval of offshore wind turbines

(March 8, 2013) With plans for a state-subsidized offshore wind energy scheme expected to pass through Annapolis this year, local officials are already preparing for exactly how an oceanic wind farm could affect the area.

“I went to my first meeting with the state committee about three weeks ago, an all-day meeting in Annapolis,” said Worcester County Economic Development Director Bill Badger. “I got quite an education on wind turbines.”

In the 2011 and 2012 legislative sessions, as well as this year, Gov. Martin O’Malley has encouraged legislation to authorize the development of wind farms off the state’s coast. For the past two years, the initiative has cleared the House of Delegates, but has been stymied by discussion at the Senate committee level. This year’s vote, according to a number of Annapolis news sources, is shaping up to be more optimistic.

The past two years’ discussions have resulted in some parameters, however, that are extremely important to Ocean City’s role in the possible offshore development. Electricity generated by wind turbines at sea would need to be connected to the on-shore power grid via an undersea cable, which would have to come ashore at some point and be tied in via a substation.

This connection was initially proposed to run over or under Assateague, but staunch opposition from environmental groups means that the line would have to be placed somewhere in Ocean City.

Bringing power in from out at sea would require a fair amount of on-shore infrastructure improvements, according to Chris Graf, a former General Electric engineer and a wind energy consultant who has been assisting Badger and state representatives. Although he has designed mostly on-shore wind farms, Graf said the tie-in concept should be similar.

“Generally the turbines – the units on-shore, at least – are 690 volts, so they have to be stepped up to a voltage compatible with the grid,” Graf said. “That means larger transformers and circuit breakers.”

Delmarva Power’s transmission lines in the region are generally 69,000 volts, with some at 138,000, meaning a 100-to-1 or 200-to-1 increase in electric potential.

The turbines themselves, however, would not be noticeable, as part of previous years’ discussion resulted in the stipulation that the turbines be located at least 10 miles off the beach, so as to not obstruct the horizon for beachgoers.

Badger said that the current proposal would involve the state auctioning off the rights to construct two offshore wind farms – an “a” zone and a “b” zone – with a combined area of about 79,000 acres.

“The zones are right off of Ocean City, and almost to the Delaware line,” Badger said.

Under the current proposal in Annapolis, wind energy would be subsidized by using a $1.50 tax on the state residents’ electricity bills, in order to make wind power more price-competitive with cheaper generating systems, namely fossil fuels.

Even still, a potential wind farm developer would need a considerable operating reserve, as Graf estimated that most on-shore wind units take about eight years before they pay for themselves. Given the difficulty of installing such units at sea, he estimated that offshore units would take somewhat longer to become financially viable.

What is even more important than the state subsidy, however, are federal tax credits for renewable energy, which were eliminated last year after almost a decade in place, but were brought back this year for another two-year period.

“That’s what makes the wind farm development work right now, financially,” Graf said. “Without that tax credit, it’s very difficult.”

During the year in which the credits were in danger, Graf noted that GE sold 3400 turbines – more than it ever has before – due to developers trying to establish wind farms that would be grandfathered into the tax code before the credits were pulled.

“A few years ago, it was a seller’s market,” Graf said. “There were a finite number of turbines that could be made, and developers were buying them, so we were selling like hotcakes. Now it’s a buyer’s market, but there’re still a finite number of turbines, so basically you still have to get in line with everybody else.”

Production of the enormous rotors, which can measure up to 140 meters in diameter, is capable at only a few foundries around the world. GE sources their parts from a number of places and assembles the product at a seaport in Pensacola, Fla. so that they can be barged out and installed at sea where needed.

“You’re going to have a lot of ancillary business from the turbines – parts inventory, electricians, mechanics,” Graf said. “I think it would be a huge benefit to Ocean City’s economy.”

“One of the big benefits has been the local schools, who have to train people how to do this. In Texas, out where most of the on-shore turbines are, they’ve all started offering renewable power courses.”

Even if legislation is passed this spring, full implementation is still somewhat far off.

“Even if everything goes perfectly right, we’re three or four years away from seeing wind turbines off the coast of Ocean City,” Badger said. “Our impact is going to be in maintenance and in the construction phase of the turbines here. That’s where I see the jobs coming from.”

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