For every bit of good news, offsetting circumstances seem to arise, and no installations are expected until late 2012 at best.
Last year's biggest story involved final federal approvals for the long-beleaguered Cape Wind, a 130-turbine project in Nantucket Sound, Massachusetts. But while state regulators approved a 15-year power purchase agreement for half of Cape Wind's 468MW output, overall costs could reach $2 billion and financing still remains a question. Legal challenges also linger and, after a decade of controversy, construction timelines remain unclear.
The year also saw a streamlined federal permitting process from the newly minted Bureau of Ocean Energy Management, Regulation and Enforcement. And internet giant Google announced a $5 billion consortium with plans to build a 6GW undersea transmission backbone for offshore projects between New Jersey and Virginia.
"It was a really important year for offshore," says executive director of the non-profit US Offshore Wind Collaborative, Fara Courtney. "We're taking the first steps to transition from a series of independent project proposals towards much more of a national agenda for offshore wind."
Meanwhile, Texas and the eight Great Lakes states are racing to be first in the water. Texas, with business-friendly permitting and a history of energy-related towers on land and sea, retains federal ocean rights out to 16.7 kilometres as a condition of statehood in 1845 - nearly triple the rights of other states. But natural gas keeps Texas electricity prices low and the Gulf of Mexico attracts hurricanes, meaning that offshore wind turbines are not an easy sell.
"If our price of electricity was the same as the East Coast, we'd already have turbines up," says Bob Blumberg, renewable energy leasing specialist at the Texas General Land Office, which has granted eight offshore leases. "But one advantage for our coast is that the wind blows during peak time - otherwise I don't think offshore would be built in Texas for quite a while."
Elsewhere, the five state-controlled Great Lakes bordering Canada feature strong winds, non-corrosive fresh water and a legacy of shoreline industrial activity. The northern US region also maintains a mothballed core of auto-industry factories and skilled workers eager to provide an offshore supply-chain. The first project, a $100 million 20MW pilot project for Lake Erie, received Ohio approvals early this year, with construction scheduled for 2012 and a 1GW build-out planned by 2020.
"There's no reason the Great Lakes resources can't be developed as soon as or before the marine environment," says Michael Klepinger, staff director for the Michigan Offshore Wind Council. "It will be a faster process as developers will be dealing with individual states."
But the sector faces daunting concerns. Most initial equipment will have to come from Europe, and massive staging and lay-down areas for larger projects are not yet built. Suitable ships remain non-existent in North American waters, and US law bars foreign-flagged vessels from many transport and installation activities. Moreover, offshore is likely to cost twice as much as land-based development for some time to come.
"The cost advantage for onshore is probably the biggest barrier to offshore," says Walt Musial, manager of offshore wind and ocean power systems for the US Department of Energy (DOE) National Renewable Energy Laboratory. "But there are some benefits to offset that. Offshore is competitive in higher-priced areas and can avoid some of the large-scale transmission issues."
Ever-larger turbines promise to help level the score, while federal government may lend additional support. "There's a significant change in the course of DOE with respect to offshore wind this year," Musial says. "But, with the new Congress, it's yet to be seen whether that money will be appropriated or not."
Either way, Musial is among many who expect North America's first offshore turbines to connect no sooner than late 2012 - most likely in the form of a pilot project in the 20MW range. "It's either going to be Cape Wind or one of those smaller state projects," Musial says. "But that's really difficult to predict without having seen one successfully go all the way through. We just don't know what all the obstacles are yet."
Canada also eyes roughly 34GW of Great Lakes offshore potential in Lake Ontario, with Ontario's provincial feed-in tariff offering 20-year fixed offshore contracts at $0.19/kWh. But last month the province declared a moratorium on offshore applications pending a government study of environmental impacts.
The ruling also rescinds what had been the only offshore contract awarded to date by the Ontario Power Authority - the 300MW Wolfe Island Shoals project near Kingston. Four other offshore applications will be terminated by the decision, which does not affect the status of onshore wind but threatens to keep turbines out of Canadian waters for the foreseeable future.