Offshore Wind: On The Horizon Presentation to the International Economic Development Council October 6, 2009 Session Overview • The Delaware project • U.S./Mid-Atlantic offshore wind resource • Matching Resource to Load • The Business Opportunities Delaware’s Approach: RFP to PPA • State legislation allowed energy sources to compete to meet demand • RFP for long-term Power Purchase Agreement allowed offshore wind to measure up against coal/natural gas (made project financeable) • Offshore wind won because expected fuel cost increases & carbon fees were accounted for • Perfect storm: Strong citizen support/ academic leadership, supportive State Treasurer (current Governor), and private sector entrepreneurship Public Opinion Won the Day • Citizen support & activism in front of PSC, Legislature and previous Governor • Coalition of advocates for addressing climate change, improving public health, clean energy • 78% local public approval v. 4% against (19 to 1) Delaware’s Offshore Project • Result: Delmarva and Bluewater Wind agreement for 200-450 MW – Only offshore wind PPA in USA – Stable pricing over 25 years – 30% of residential demand – Utility commitment to evaluate additional offshore wind purchases • Project currently in Delaware & Federal permitting processes (MET tower approved) • Delmarva Power likely to meet 20% RPS goal 5 years ahead of schedule (2019) Delaware’s Offshore Project • Project Size: 230 - 450 MW (up to 150 turbines) • Closest turbine: 12 miles east of Rehoboth Beach • Offshore Construction Start Date: Expected 2013 • Completion Date: Expected 2013 – 2014 (depends upon project size) Delaware Furthest Among Planned Offshore Developments New Federal Commitment to Wind Federal framework for offshore wind demonstrates Obama Administration’s commitment Integrating offshore wind as a cornerstone of President’s energy strategy Ensuring ample resources for research, production, development & deployment, training Streamlining permitting processes and coordinating/providing technical assistance for states (EPA, DOI/MMS, NOAA, DOE, FERC, CEQ) Vice President Joe Biden and Delaware Governor Jack Markell with Dr. Willett Kempton at University of Delaware Why Offshore Wind in U.S.? • The Mid-Atlantic region will be the first offshore wind market in the U.S. • Huge offshore resource: – 835 GW capacity & 330 GW average output – 185 GW output can supply all East Coast states (electricity, cars, and building heating/cooling) – Potential to reduce carbon emissions 68% • Large, shallow continental shelf • Expensive fossil fuel electricity regionally Nearly 80% of U.S. Electricity Demand is in Coastal and Great Lakes States Twenty-eight coastal states in contiguous U.S. consume 78% of U.S. electrical energy Nearly 60% of U.S. Population Lives in Coastal and Great Lakes States Twenty-eight coastal states in contiguous U.S. are home to 58% of population U.S. Wind Resources: Plains & Coasts Pacific NW Class 5, 6 & 7 Gulf of Maine Class 6 Great Lakes Class 5 & 6 Mid-Atlantic Class 5 & 6 S California Class 4, 5 & 6 Great Plains Class 3, 4 & 5 Southeast Class 4, 5 & 6 Large shallow areas in NE Most significant shallow Outer Continental Shelf area is in Mid-Atlantic region Resource Size Wind is Cost Competitive Today in U.S. • Offshore wind costs will be competitive in the Mid-Atlantic and Northeast earlier than any other U.S. region • Grid congestion drives high peak prices due to limited generation and transmission • Majority of electricity from coal w/ heavy GHG emissions Peak Pricing (PJM East map, CCFPI) • Offshore wind generation addresses cost variability & health/environmental impacts 2 Transmission Opportunity • Connect multiple wind sites to multiple state loads • Leveling wind resources • Avoiding “Spaghetti” Business Opportunities •Steel Fabrication •Nacelle Components •Gears/mechanical and electrical •Blades Transmission R&D Construction Long Term O&M Lets Talk About a New American Industry Thank You Contact: Philip Cherry Policy Director State of Delaware Department of Natural Resources & Environmental Control (302) 739-9000 Philip.cherry@state.de.us