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  • Tade Oyewunmi

About Offshore Wind and the Regulatory State...

Updated: Aug 11

I had the opportunity to speak about "The Regulatory State and the Emerging Offshore Wind Energy Market in the US" (a forthcoming in the Arizona Journal of Environmental Law and Policy Journal) at the 2022 Natural Resources Law Teachers Workshop hosted by the Foundation for Natural Resources and Energy Law on Saturday, July 22, 2022, in Vail, Colorado. The working paper can be downloaded on SSRN.



Abstract

Offshore wind energy systems are generally regarded as variable baseload technologies and can therefore serve a crucial role in a net-zero or carbon-neutral electricity supply grid. With the spate of growing commercial and government-policy interests in offshore wind, it is important to examine how and to what extent the framework for assessing and reviewing project plans, as well as the process of engaging with impacted stakeholders, or alternative users of the outer continental shelf, can become more efficient and less controversial. Thus, this paper discusses the emerging offshore wind energy market in the U.S. and highlights the role of the regulatory state in facilitating a more efficient leasing and permitting process for projects without compromising the protections afforded under applicable laws and regulations. Adopting a compressive and standardized review of relevant project plans and proactive stakeholder engagement processes is recommended at an early or appropriate time during the permitting process. Understanding the opportunity costs of delayed and canceled projects, addressing misperception of risks, and standardizing best practice measures for addressing common issues identified from review processes could go a long way in making a project’s impact assessment and permitting framework more efficient while protecting the environment and legitimate interests of other users in the outer continental shelf.


Generally, the process of planning and leasing, site assessment to construction, and operation of offshore wind projects in the U.S. could go on for about ten (10) to eleven (11) years or more, depending on the effectiveness of the regulatory state. Such lengthy timelines, the risk of controversies, and the misalignment of interests amongst stakeholders could easily impact the costs and deliverability of electrons to power markets from the planned projects.


Part II of this paper highlights the growing interest in harnessing wind energy from offshore areas in the U.S. It then discusses the framework for permitting offshore wind projects with examples from the Northeast, including the energy policy implications for delivering clean energy to the respective wholesale markets that the projects will serve. From reviewing the background leading to selected cases and decisions made, Part III examines the regulatory environment for leasing, sitting, and permitting, encompassing the stages of planning and analysis, leasing, site assessment, construction, and operating plan. It highlights the tensions between the various stakeholders involved in developing offshore wind projects, such as commercial fishing, migratory birds, endangered species, and maritime risks. It underscores how information and perception of various risks influence relevant stakeholders in dealing with the appropriate tradeoffs. It concludes by discussing the need for planning new interconnections with Wholesale Markets and the Grid.


Part III concludes with a discussion on the role of institutional platforms in facilitating the gathering and sharing of essential information among stakeholders and decision-makers. In this regard, it considers the role of Renewable Energy Task Forces in the U.S., with the example of Oregon as the state and coastal communities and stakeholders consider the implications of developing offshore wind resources.


Part IV explores costs and integration issues and streamlines the regulatory process to promote efficiency and avoid unnecessary delays while complying with the applicable laws and regulations. It highlights developments in the U.K., one of the major offshore wind jurisdictions. Part V concludes and highlights the role of the regulatory state within an emerging offshore energy market that promises to play a major role in meeting future energy needs in the U.S.



The working paper can be downloaded on SSRN.

Keywords: Offshore Wind, Energy Law, and Policy, Electricity Markets, Energy Regulation, Environmental Assessment


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