Offshore wind is the renewable energy industry’s newest darling. Federal and state funding opportunities have abounded in the wake of increasingly available and reliable technologies to implement the green energy source, but these opportunities coexist with myriad regulatory frameworks. Though offshore wind is not entirely without opposition, the US government and various federal and state agencies have excitedly begun working on wind power projects and incentives.
Several government entities have joined the efforts to increase wind energy infrastructure and consumption. Among them are the Department of Transportation’s Maritime Administration (“MARAD”), the US Department of Energy (“DOE”) and its subsidiaries the Office of Energy Efficiency and Renewable Energy and the Wind Energy Technologies Office, the Bureau of Ocean Energy Management (“BOEM”), the National Oceanic and Atmospheric Administration, and several state agencies including the New York State Energy Research and Development Authority and the New Jersey Department of Environmental Protection. These agencies coordinate to ensure a balance of interests between clean wind energy, economic opportunity, and environmental protection.
Several of the aforementioned agencies have implemented programs to incentivize offshore wind investment. Chief among such programs is MARAD’s designation of offshore wind vessels as “Vessels of National Interest” which make them eligible for financial support through the Federal Ship Financing Program (Title XI). This program specifically incentivizes domestic collaboration and progress, assisting with modernization of shipyards to construct and retrofit vessels, and to help domestic shipowners to finance US-made newbuilds with better-than-market credit terms. The program also partners with several east coast states to strengthen the offshore wind supply chain by facilitating relationships and contracts between wind farm operators and the states themselves. For example, New York State hosted an auction by BOEM of certain offshore sites soliciting bids in the billions for projects to power New Yorkers’ homes with wind energy.
DOE also recently held a Floating Offshore Wind Shot Summit, where several federal agencies and federal, state, Tribal, labor, industry and community leaders convened to discuss floating offshore wind projects. The aim of the program is to significantly reduce the costs of the technology while creating jobs, bolstering domestic manufacturing, and shortening supply chains. The summit also discussed the more than $100 million in funding under the Port Infrastructure Development Program which aims to specifically modernize ports to support offshore wind development.
While government wind energy goals may seem lofty, the energy and investment already devoted to projects and funding thereof signal significant buy in to meet the objectives. This excitement combined with the tangible financial incentives herald a profitable and environmentally conscious expansion of the offshore wind industry for public and private stakeholders.
The attorneys on the Seward & Kissel Maritime Practice Team have extensive experience with a vast array of different maritime contracts including with the financing of offshore wind vessels. If there are any questions, please contact any attorney on the Seward & Kissel Maritime Practice Team.