DNREC State Energy Office Delivers Offshore Wind Procurement Report to Governor, Legislators

Exploring partnerships with neighboring states, promoting the coordinated, cost-effective buildout of the transmission system on a regional scale and including ways to avoid, minimize or mitigate environmental impacts are among the recommendations put forward in a report on developing a process for offshore wind procurement delivered to Governor John Carney and state lawmakers by the Department of Natural Resources and Environmental Control’s (DNREC) State Energy Office.

“This report provides the background, current economic conditions and options for the Governor and state legislators to consider as Delaware charts its path forward in the development of a comprehensive offshore wind program,” said DNREC Secretary Shawn M. Garvin.

The report, Proposed Offshore Wind Procurement Strategy for Delaware, reviews changing conditions in the offshore wind industry, identifies key factors to consider in developing an offshore wind program, identifies key developments coming up in 2024 that will affect planning and offers recommendations on how to best structure an offshore wind procurement strategy to meet Delaware’s needs.

Among the recommendations included in the report:

Delaware should proceed with legislation authorizing the procurement of offshore wind to serve Delaware, either as a standalone project or in partnership with other states.
DNREC should prepare model legislation to establish a path forward on offshore wind procurement that best serves the needs of Delaware.
DNREC should be the lead agency in developing an offshore wind procurement program.
The procurement program should encompass as much flexibility (in terms of timing, scale, location and agreement structure) as possible to best adapt to changing industry conditions.
The procurement program should be developed in consultation with all Delaware utilities, mindful of their differing governance structures and business practices.
The procurement program should maximize long-term value and minimize ratepayer impacts.
The procurement program should provide for economic development and workforce development without adding specifications that would drive up the cost.
The procurement program should include possible partnerships with neighboring states on subjects including procurement, transmission and supply chain development to take advantage of economies of scale beyond those of Delaware’s buying capacity.
The procurement program should be structured to promote the coordinated, cost-effective buildout of the transmission system on a regional scale.
The procurement program should consider potential environmental and natural resource impacts and include ways to avoid, minimize, or mitigate these impacts in planning for offshore wind procurement.
DNREC should update its analysis and adapt this strategy on an ongoing basis as more information becomes available.

DNREC also delivered the first Climate Action Plan Implementation Report to the Governor and state lawmakers. That report highlights how the state, in partnership with federal and local governments, fellow states, businesses, universities and communities is making rapid progress in Delaware’s efforts to reduce emissions and transition to clean energy sources.

“Thanks to President Biden and Governor Carney’s leadership, Delaware is seizing the opportunities to advance America’s growing offshore wind industry and reap the benefits – from good-paying union jobs, to lower energy costs, to a healthier planet,” President Biden’s National Climate Advisor Ali Zaidi said. “Today’s announcement is a key step forward for the Central Atlantic offshore wind partnership, as we continue to work hand in hand with the Carney Administration to grow domestic procurement of wind technology. We will continue to coordinate across all levels of government within the region to ensure Delaware is able to take advantage of the immense economic and environmental benefits of this rapidly growing American industry.”

The report builds on the recommendations of the Offshore Wind Working Group, continuing through the Special Initiative on Offshore Wind (SIOW) Report commissioned by DNREC and on the policy direction set by the Delaware’s Climate Solutions Act. It represents the most recent step in Delaware’s ongoing effort to develop an offshore wind strategy that fits the state’s policy needs and objectives.

About DNREC
The Delaware Department of Natural Resources and Environmental Control protects and manages the state’s natural resources, protects public health, provides outdoor recreational opportunities and educates Delawareans about the environment. The DNREC Division of Climate, Coastal and Energy uses science, education, policy development and incentives to address Delaware’s climate, energy and coastal challenges. For more information, visit the website and connect with @DelawareDNREC on Facebook, Instagram, X (formerly known as Twitter) or LinkedIn.

Media contacts: Michael Globetti, michael.globetti@delaware.gov; Jim Lee, jim lee@delaware.gov

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Delaware to Negotiate with US Wind Over Benefits for State

WILMINGTON, Del. – Governor John Carney announced the start of formal negotiations between Delaware and US Wind regarding its two planned offshore wind projects, MarWin and Momentum Wind, with an outline of potential agreements for a lease of state land, for energy credits to reduce electricity costs, and for funding for workforce and environmental projects.

The initial Term Sheet signed on Tuesday by the Governor and US Wind CEO, Jeffrey Grybowski, contemplates the commencement of negotiations over a lease at 3Rs Beach in Delaware Seashore State Park for an underground cable landing to deliver power from the turbines to the regional electrical grid.

The outline also includes plans to ensure “Delaware’s residents, the people, communities and ratepayers of Delaware receive benefits from the development, construction, and operation of the Projects,” such as:

150,000 renewable energy credits (RECs) each year associated with the wind generation, which would be transferred at no cost to Delaware utilities to help them meet clean energy requirements and lower customer bills. The RECs have an estimated value of $76 million over the life of the Projects.
Funding for dredging projects in Delaware’s coastal areas
Funding for clean energy workforce development training at Delaware colleges and schools
An environmental education scholarship fund
A Resiliency Fund for climate change projects at State Parks
Replenishing the 21st Century Fund, which funds environmental, facility, stewardship, interpretation, environmental justice, and youth & veteran conservation corps projects in State Parks.
The agreement outline proposes that US Wind will provide $40 million for the community benefits projects over 20 years, with specific amounts for each to be determined.

“This agreement means Delaware will become an active player in the growing offshore wind industry,” said Governor Carney. “It aligns with other objectives, including our emission reduction targets and meeting the net-zero carbon goal set last year by House Bill 99. Transitioning to clean energy sources is essential to reducing manmade greenhouse gas emissions that are driving climate change, and these wind projects are part of that transition.”

“Offshore wind will help to lower electricity bills for the people of Delaware and will improve air quality across the state by reducing our reliance on burning fossil fuels. We plan to deliver a massive amount of clean energy directly into the electric grid in Delaware and that direct link means a lot of benefits locally,” said US Wind CEO Jeffrey Grybowski. “We look forward to working with the people of Delaware as we progress these plans and we congratulate Governor Carney for carving out this unique opportunity for Delaware to be a major beneficiary of the growth of offshore wind energy in the region.”

The lease for the cable landing at 3Rs Beach would be $350,000 a year with annual increases, per the Term Sheet. The lease negotiation will be separate from the necessary environmental permits that US Wind will have to obtain for its cable routes, which will go through the established administrative process that includes public comment. The land lease with Delaware State Parks does not prejudge or guarantee favorable outcome of the environmental permits.

Prior to finalizing the potential land lease, State Parks and US Wind will hold a public information session to share details of the work to be done at 3Rs Beach. When complete, US Wind’s plans show that the only visible evidence of the underground cable crossing would be a manhole in the parking lot.

The US Wind projects are likely to be among the first wind projects in operation in the mid-Atlantic. The projects will sell carbon-free power into the regional power grid, and this new source of power generation is projected by US Wind to lower regional energy prices and capacity charges by up to $253 million over 20 years. US Wind will also invest more than $200 million in transmission system upgrades.

US Wind’s filing with the federal Bureau of Ocean Energy Management (BOEM) proposes multiple routes one of which comes ashore at 3Rs Beach just south of the Indian River Inlet, then runs underneath Indian River Bay to a substation at the Indian River Power Plant, where it will connect to regional grid. The US Wind Projects are going through a federal permitting process that is separate from any state process, and BOEM is currently considering input from a recent public comment process on the Projects’ environmental impact.

The term sheet outline of the potential agreement between the state and US Wind can be found here.

US Wind and Ørsted Conducting Offshore Wind Research

Companies Updating Data for Maryland-Approved Projects

Visitors to Delaware Seashore State Park will see an increase in activity in the coming months as US Wind and Ørsted, two offshore wind energy development companies, conduct research and collect data to determine the best path forward for their wind projects.

Both companies plan to update and refresh information collected in the Indian River Bay in 2016 and 2017, and to conduct geotechnical work in the Atlantic and at some land-based locations.

In 2017, the Maryland Public Service Commission awarded US Wind Offshore Renewable Energy Credits (ORECs) for the construction of a roughly 248 megawatt (MW) offshore wind project. A second 808.5 MW project received approval in December 2021.

Ørsted has also received approval from Maryland’s PSC for two projects: Skipjack Wind 1, a 120 MW project, and Skipjack 2, an 846 MW wind project. All four projects are proposed to be built in wind energy areas off the Delaware and Maryland coasts.

“Any project of this scope requires an extensive regulatory process, as well as considerable public input. Gathering the information is the first step,” said DNREC Secretary Shawn M. Garvin.

In 2019, Ørsted researched the possibility of using Fenwick Island State Park as a location for an interconnection facility. It was later determined that the location was not environmentally feasible.

“We’ve heard the feedback of Delawareans who told us they want to be updated on offshore wind activities, including research. We want to ensure the public is aware of these activities and what the research entails,” Garvin said.

The research will include geotechnical investigations in the Atlantic and Indian River Bay, land-based geotechnical sampling at Delaware Seashore State Park and other work including data collection on wetlands, rare species and cultural resources.

Media Contacts: Michael Globetti, michael.globetti@delaware.gov; Nikki Lavoie, nikki.lavoie@delaware.gov

Report Outlines Offshore Wind Opportunities, Challenges for Delaware

Special Initiative on Offshore Wind Provides Updates on Markets, Pricing

The opportunities and challenges ahead for Delaware as it explores the possibilities of the state entering the growing offshore wind industry are outlined in a new report prepared by University of Delaware researchers for the Delaware Department of Natural Resources and Environmental Control.

DNREC Secretary Shawn M. Garvin wrote to ask UD’s Special Initiative on Offshore Wind last year to conduct analysis of market trends, economic viability including future price points, supply chain and workforce development opportunities, and technical obstacles and options for the possible procurement of offshore wind to serve Delaware. The chairs and vice chairs of the General Assembly’s Senate Environment and Energy Committee and the House Energy Committee later also encouraged SIOW to conduct the study. The study’s objectives were outlined in a memorandum of understanding between DNREC and the SIOW.

The state’s Offshore Wind Working Group’s 2018 report highlighted several options for further consideration, including the state waiting for more developers to enter the market, an incremental approach to wind power, and evaluating other renewable sources. In requesting SIOW’s help, DNREC was interested in updating the opportunities and challenges of offshore wind to inform decisions by state leaders regarding the possible procurement of offshore wind power and related issues.

“While it does not address all of the options put forward by the Governor’s Offshore Wind Working Group, this new report provides insights into current market conditions, outlines policy options for Delaware, and identifies important tradeoffs based on priorities determined by the Governor and state legislature,” Secretary Garvin said. “The report, along with the findings put forward by the Offshore Wind Working Group, are essential pieces that will help ensure we make the right decisions moving forward.”

Among the report’s findings:

Projected offshore wind power prices fall within the range of wholesale power being purchased for Delaware now.
Offshore wind power costs less than half of Delaware’s current electricity supply when the social costs of health and climate impacts are included.
Health damage from polluting power plants is very real, as are health savings from adding new renewable energy.

Kris Ohleth, SIOW executive director at the University of Delaware, said the report provides information on different approaches to offshore wind development.

“If Delaware decides to create a procurement for offshore wind, the state will develop its own approach based on its priorities,” Ohleth said. “This report describes potential policies and opportunities and quantifies their relative effects on the cost of electricity.”

Delaware has set a target of achieving 40% renewable energy by 2035. In addition, shifting to renewable energy is among the strategies identified in Delaware’s Climate Action Plan to reduce the harmful greenhouse gas emissions that are driving climate change.

DNREC will continue to study and evaluate all the options and the technical challenges involved in connecting offshore wind to the power grid. The SIOW report, as well as the previous work from the state’s Offshore Wind Working Group, can be found at de.gov/offshorewind.

Media Contacts: Nikki Lavoie, nikki.lavoie@delaware.gov or Jim Lee, JamesW.Lee@delaware.gov

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DNREC’s Division of Parks & Recreation extends deadline for Fenwick Island State Park Improvements Survey

FENWICK – DNREC’s Division of Parks & Recreation has extended the Fenwick Island State Park Proposed Improvements Survey deadline to Jan. 15, 2020. The extension is to allow further input regarding improvements to the park that are under consideration.

The estimated $18 million in proposed improvements look at ways to improve traffic flow, upgrade infrastructure, and add new recreational amenities. Ørsted, an offshore wind developer, has proposed funding these projects as part of a public-private partnership.

The funding for the amenities under consideration could be done sooner if the State allows the Maryland Skipjack Wind Farm project proposed in Federal waters to connect to the electrical grid under Fenwick Island State Park. DNREC is extending the period to take comments on the park improvements. Comments on the wind farm should be directed to United States Bureau of Ocean Energy Management (BOEM) Office of Public Affairs at BOEMPublicAffairs@boem.gov, 202-208-6474 or 1849 C Street, NW, Washington, D.C. 20240.

The Fenwick Island State Park Proposed Improvements Survey and its comment section are specific to the park and its amenities. For questions or to complete the survey, visit www.destateparks.com/FenwickImprovements.

For more information about the Skipjack Wind Farm, visit https://skipjackwindfarm.com. For additional information on the Federal approval process through BOEM, visit www.boem.gov/renewable-energy/state-activities/maryland-activities.

Contact: Shauna McVey, DNREC Division of Parks & Recreation, 302-739-9220.