Development of Delaware Offshore Wind Project Delayed By BP Spill

The regulatory fallout from BP’s Gulf oil spill is inflicting collateral damage on a major offshore wind project in Delaware.

Hoboken, N.J.-based NRG Bluewater Wind? officials said the restructuring of the Minerals Management Service, (MMS) following the Gulf spill could delay the development of its Mid-Atlantic offshore wind project by up to two years. The facility was initially scheduled to come online in 2014 but , under a new timeline, NRG Bluewater officials said it won’t start operating until 2016.

The MMS is the Interior Department agency in charge of regulating the country’s offshore resources. Shortly after the start of the BP spill, it came under firewith the oil and gas companies it was suppose to regulate. Since then, the MMS has been undergoing a deep restructuring, including a name-change: it’s now called (BOEMRE).

In a letter to the Delaware Public Service Commission, NRG Bluewater says the turmoil at the BOEMRE has delayed the issuance of permits it needs to deploy meteorological towers (met towers). ?The towers are designed to collect wind and current patterns at the proposed site of the offshore wind farm, some 11 miles (17 kilometers) off the Delaware coast.

The delays have forced NRG Bluewater to amend its Power Purchase Agreement (PPA) with state utility Delmarva Power, which had agreed to buy 200 megawatts of electricity from the Mid-Atlantic facility. Under the PPA’s new timeline, Delmarva has agreed to a two-year extension that will see it get delivery of its wind-generated electricity at the end of 2016 instead of the initial 2014 deadline.

When it is fully developed, the Mid-Atlantic project could produce up to 600 megawatts of electricity.

Peter Mandelstam, the president of NRG Bluewater, remains confident the project will go online before the 2016 deadline. The amendment to the Delmarva PPA, he said , “simply adjusts the timeline for circumstances beyond our control.”

When Interior Secretary Ken Salazar awarded Boston-based developer Cape Wind a federal permit last spring supporting the development of its 420-megawatt offshore wind project in Nantucket Sound, he vowed?a smoother permitting process for other offshore wind projects. That was before the BP spill, which led Salazar to restructure the regulator.

The approval processes for offshore wind are long and complex and disarray at BOEMRE — even in matters as minor as meteorological towers — could seriously hamper other green energy projects.

Luckily for the developer formerly known as Bluewater Wind, which?was acquired last fall by NRG Energy, financial stability is not a problem.?The deal bolstered NRG’s renewable energy portfolio and provided the Bluewater Wind access to NRG’s large balance sheet, which undoubtedly will help it secure funding.

Photo: Flickr, AnthonyNGO

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