By Zack Colman - 06/03/13 06:57 PM EDT
The Interior Department will release details for the first federal offshore wind lease sale Tuesday, Interior Secretary Sally JewellSally JewellGOP chairmen propose sweeping federal land changes for Utah Interior chief headed to Utah amid divisions over proposed monument Obama weighs big Arctic decision MORE announced in a Monday media call.
Jewell said the lease sale would be for a plot off the Atlantic coast, and said it could serve as a litmus test of industry demand for offshore wind.
Interior also announced the approval of three renewable energy projects on federal lands in Arizona and Nevada. The solar and geothermal facilities will generate 520 megawatts of power, which is enough to power 200,000 homes, according to Interior.
On the offshore wind front, Jewell said selecting a site for the first lease sale took a considerable amount of time.
Jewell said Interior considered many factors, including which areas would yield the highest potential for wind power while avoiding bird migration patterns and shipping lanes.
She said timing for developing a commercial offshore wind industry, however, is up to the private sector.
“I can’t promise that they will be in production in four years, but we don’t want to be a roadblock,” Jewell said. “The market will dictate, but we certainly don’t want to get in the way.”
Jewell said she thinks “the demand is out there” for offshore wind, noting outdoor gear giant REI Inc. purchased wind and solar power as a way to reduce greenhouse gas emissions when she led the company.
Financing offshore wind projects, though, has proven more elusive than the onshore variety.
The onshore wind industry has benefited from 20 years of production tax credits, which repay wind power producers for generated electricity.
But the production tax credit model is less effective for offshore wind projects because they’re more expensive and need up-front incentives to get started, industry experts say.
Offshore wind advocates have instead backed investment tax credits, which subsidize projects based on total cost.
Sens. Tom CarperTom CarperCentrist Dems wary of public option push Retailers are shirking consumer data security responsibilities GMO labeling bill advances in the Senate over Dem objections MORE (D-Del.) and Susan CollinsSusan CollinsThe Trail 2016: Words matter Lobbyists bolting Trump convention early GOP sen at convention: I'm not ruling out voting for Clinton MORE (R-Maine) have introduced legislation that would offer a 30 percent investment tax credit for the first 3,000 megawatts of offshore wind facilities. Once awarded a credit, the developers would have five years to install the turbines.
New Jersey Reps. Bill Pascrell Jr. (D) and Frank LoBiondo (R) co-sponsor the House version.