Note: This page is part of the Governor's News Archive, which holds press releases from January 2009 through September 2011. Since October 2011, recent news can be found in the Newsroom and archived news is available at news.delaware.gov.
December 3, 2009
BOSTON – Gov. Jack Markell addressed the American Wind Energy Association’s conference in Boston on Dec. 2. An early supporter of efforts to make Delaware the home of the nation’s first offshore wind farm, Markell delivered the following speech focused on making offshore wind power a reality in America:
Thank you. A few years ago, before I entered public service, I was working in the communications industry as one of the first employees of what became Nextel. I saw firsthand the risks and rewards and the vision and pragmatism that it takes to launch a new industry. I sense that same energy in this room today and I’m here to say that Delaware is committed to doing everything we can to ensure that offshore wind becomes a reality in America.
Yesterday, I had the privilege of being elected chairman of the Democratic Governors’ Association. When I spoke to my colleagues I had a simple message—our success as leaders will depend upon our ability to jumpstart our economy. One of our more promising paths to prosperity is to embrace clean, renewable energy. I firmly believe that the deployment of clean energy is key to tackling America’s four greatest interconnected challenges: 1) revitalizing our economy by spurring innovation, manufacturing & investment; 2) protecting our environment and confronting climate change; 3) improving the health of our citizens; and 4) ensuring our national security.
Harnessing America’s offshore wind potential is important to meeting all of these challenges and to seizing our nation’s future.
But if we all know this is the case, how do we speed up deployment? How do we harness this incredible resource and make offshore wind a reality in the next three years—and not in five or ten?
We know we need to re-engineer our economy and reduce our trade deficit; We need energy independence and stop importing so much energy from nations that don’t like us very much; And we need to reduce carbon emissions significantly--80% by mid-century.
Transitioning towards a clean energy economy is the only way to overcome these challenges. Countless studies and reports have shown that the U.S. has sufficient renewable resources to provide much of the energy needs of this nation. Too often these conversations have focused on wind in the Great Plains and Rocky Mountain states, solar in the Southwest, geothermal in the west, or smaller distributed solutions.
The problem with this analysis is that a vast amount of our nation’s electricity consumption is on the East Coast—a region previously believed to lack a utility-scale renewable solution. We have half of the population of the nation. We pay some of the highest energy prices. We have a congested grid. We have some of the worst air quality. Our rates of asthma and lung disease are higher than other regions and we emit more greenhouse gases… and we are also in the midst of the most severe economic downturn in generations. We need an energy solution that works for the East Coast—and one that can be developed rapidly.
Fortunately, the East Coast’s offshore wind resource is among the greatest renewable resources in the world. By harnessing this resource, we have the unique opportunity to address all of these challenges simultaneously and, in doing so, strengthen our national economy for generations.
Delaware’s own Dr. Willett Kempton and his team have quantified this resource on the broad outer continental shelf from North Carolina to Massachusetts. According to their studies, the resource capacity is huge – hundreds of Gigawatts. If we are serious about harnessing offshore wind, the resource could not only generate very significant amounts of energy, it could also reduce carbon emissions dramatically.
To enable this growth, we, as a nation, need to consider transmission upgrades that support renewable energy. Currently, transmission costs significantly increase the total costs of offshore wind to customers and may delay the growth of the industry. An offshore transmission backbone may provide a solution to this challenge and we need to do the rigorous analysis to determine its feasibility. A trunk-line that would connect to the grid directly and allow projects to connect to it, rather than each trying to connect to the grid individually, could serve to avoid significant expense for individual projects. This approach should reduce congestion, address concerns about intermittency, and reduce the need for costly storage or backup power solutions--all of which affect the end price to customers.
Deploying the resource and building the infrastructure presents a significant economic opportunity for the East Coast. The development of this industry will create tens of thousands of jobs in the coming decades. I am determined to work with all of you to make sure have the facilities and logistics necessary to make this expansion happen.
When they write the story of offshore wind in America, the pages will be filled with the pioneering efforts of development teams like Cape Wind and Bluewater Wind, as well as visionary leaders up and down the Coast. They deserve our admiration and Delaware is proud to be part of this historic effort.
In Delaware, we are taking critical steps every day to make offshore wind a reality. Last year, the first, and for right now only, Power Purchase Agreement in the nation for offshore wind was signed in Delaware. The agreement between Delmarva Power and Bluewater Wind, and approved by the State, is for at least 200 Megawatts of production.
In another sign that this industry has arrived, a major power plant operator, NRG Energy, has acquired Bluewater Wind and has indicated their plans on making offshore wind and other renewable energy projects an important part of their portfolio.
We’re also putting innovative policies in place to create a post-carbon policy environment. Like everyone, we have an aggressive RPS, but we’re also redesigning our energy policy. We’re modernizing our Integrated Resource Planning process so that utilities account for all externality costs when evaluating various supply options. This means that instead of comparing 10 cent wind to 6 cent coal, in Delaware we’ll be comparing wind at 10 cents to the real cost of coal at 6 cents, plus health and environmental costs.
We’re going to stop making fossil fuels look artificially cheap and level the playing field for renewable energy. This is an important change in focus and I encourage all of my colleagues to adopt a similar approach.
We’ve also passed a series of laws requiring that all new demand must be met first through energy efficiency and renewable energy, before any fossil fuel generation can be considered.
We also passed significant legislation in energy efficiency, renewable energy rights, net-metering, green building codes and have begun to announce several innovative energy programs—and for these efforts the American Council for an Energy Efficient Economy ranked Delaware as the most improved state over the past year.
And, we continue to build strong partnerships with our institutions of higher education—creating innovations for the wind industry in composite materials, resource assessment, and offshore wind policy. For example, the University of Delaware recently announced an partnership with Gamesa that will serve as a first step towards creating a cutting-edge Delaware-based testing and research facility.
We are also doing everything that we can to seize the economic benefits from a clean energy future in Delaware. We recently announced that Fisker Automotive will manufacturer its plug-in electric hybrid sedan in Delaware, producing more than 100,000 cars a year and creating 2,000 jobs in the process. We were successful in bringing Fisker to Delaware because of the quality of our workforce, our location, our cost of doing business – and because we are the most responsive and nimble state in the nation—their CEO Henrik Fisker jokes that “we pulled together faster than he can take his family of four people to dinner.”
As you are deciding where to locate your company, I promise that if you give Delaware a look we will demonstrate the same level of dedication and service to you.
Call to Action
I could go on about Delaware and why you should join us, but before I conclude I’d like to talk specifically about some concrete steps that we need to take collectively to turn our vision into reality.
Developers & Manufacturers
To the development and manufacturing companies with us today, I urge you to keep working hard. We need viable technologies and bankable projects that can be deployed rapidly. We need to work together to ensure that offshore wind is cost competitive with traditional generation as soon as possible. We need to find ways to drive down the costs and ensure reasonable pricing to demonstrate that offshore wind is an economical choice today and tomorrow.
Let me also make an appeal to land-based wind developers and suppliers. Please, acknowledge with me today and forward, that we need both onshore and offshore wind—offshore wind is not a threat to land-based wind. The country needs both and the two have many synergies in policy and in development of common technologies. We need to enable all clean technologies to flourish. It is time for a truce.
To all of the utility companies and potential customers, I encourage you to take a hard look at offshore wind the next time that you are looking for a stable, cost competitive, and locally generated supply of energy. At some point there will be a price placed upon carbon nationally, so if you take a long-term view, offshore wind is a great investment.
To all of my colleagues in state government, we need to redouble our efforts. As New York Times columnist Tom Friedman told me a few months ago, if we truly want to create a clean energy economy, we need to get real. We need to create stable market demand with real contracts, clear price signals, and predictable incentives.
This fall, I sent a delegation led by my Secretary of the Environment to the European Wind Energy Association‘s offshore wind conference in Stockholm. From this experience, it’s clear that there will not be substantial manufacturing operations in the U.S. until there is sufficient market demand to justify the capital investment. It’s going to take much more than a quarter Gigawatt contract in Delaware and a few potential projects of a few hundred megawatts. We need to ensure a steady stream of projects, year after year, and we need to drive down prices through creative financial and policy mechanisms.
We also need to turn the numerous regional efforts at collaboration into tangible results. MARCO (Mid-Atlantic Regional Council on the Oceans), RGGI, the Offshore Wind Collaborative, and, most recently, a new mid-Atlantic partnership have all attempted to play a facilitative role. We must work together on developing common standards and efficient permitting, creating sustained demand, ensuring a sufficient supply chain, providing needed infrastructure and logistics, providing incentives to early adopters.
Last month, I was proud to coordinate with my colleagues Governors O’Malley, Kaine, and Corzine to submit comments to FERC (pronounced Ferk), the first that FERC has received to specifically request directing PJM to begin planning for the renewable energy transmission infrastructure necessary for offshore wind. We need to continue these types of collaboration, but make no mistake—conferences and coalitions alone won’t get this done. We need to translate our efforts into concrete progress at the Federal level.
Creating a whole new industry will require unwavering support from our Federal partners. The Obama Administration has taken several key steps to advance our cause, including getting out the MMS framework within 90 days of taking office, making a few key investments out of the stimulus package, and raising the profile of offshore wind. We are most grateful for their leadership and support.
MMS has made great strides in the eight months since the President announced the framework on Earth Day, but we must accelerate the proposed timelines for the offshore lease processes.
Delaware had the honor of hosting the nation’s first Offshore Wind Task Force meeting with MMS in October and the early collaboration among the dozens of governmental agencies is promising, but we need to do much more. A two year competitive lease process is too long. We need to ensure that the NEPA process is streamlined and efficient.
We must work closely with the Council on Environmental Quality (CEQ) and the National Oceanic and Atmospheric Administration (NOAA) to ensure that important marine spatial planning work is done concurrently, and not sequentially, with the development process. If we are to begin installation by 2012 or 2013, we need to expedite all regulatory processes—time is of the essence.
We must also work with the Department of Energy to expand its capacity in both the R&D and deployment of the resource. And most importantly, we need to work with Congress. Ensuring access to capital and reducing the cost of capital for early projects may well determine their success or failure. We need to work to ensure sufficient loan guarantees similar to those provided for the oil, coal and nuclear industries for decades and stable price incentives through a long-term extension of the production tax credits.
We have our work cut out for us to make offshore wind a reality in the U.S. We each have a critical role to play, and we need to take action. Our citizens are hungry for the benefits of clean energy. Every day that we delay is another day of dirty power, more emissions, health costs, and missed economic opportunity. I want the efforts that we’ve begun in Delaware to lead our nation towards a clean energy future—and I invite you to join us.
We need to make the vision a reality. Our time is now.
 80% is not hyperbole; it is the target in both the House and Senate climate bills and the starting point for the Copenhagen conversation.
 Federal Energy Regulatory Commission