The U.S. Department of Interior (DOI) granted a lease for an offshore wind farm off the coast off Delaware. In charge of the project is a unit of U.S. power company NRG Energy. But despite the lease grant, the firm had decided last December to put the project on hold due to financial considerations.
Reuters reports that this is only the second offshore wind farm lease approved by the U.S. government. Meanwhile, the Interior Department says it is just the first under the DOI’s “Smart from the Start” approach.
The U.S. government reportedly issued the first offshore wind lease in 2010 to privately-held Cape Wind. This was for the company’s 420-megawatt (MW) wind farm off Cape Cod in Massachusetts.
Wind farms are popular in Europe, but there are no operating offshore wind farms in the United States. Although, Reuters reports, a few companies think they may become the first — including CapeWind in Massachusetts and privately held Deepwater Wind in Rhode Island.
The news agency reports that the Bluewater lease covered 96,430 acres in federal water about 11 nautical miles (20 km) off the coast of Delaware. NRG had proposed to build a 450-MW project, which could generate enough power to supply more than 100,000 homes. That project would cost about $2.7 billion, according to industry estimates.
NRG reportedly acquired Bluewater in 2009. That’s when the Delaware wind farm was in line for a federal Department of Energy loan guarantee. But since then, according to Reuters, Congress has eliminated funding for the loan guarantee program for offshore wind and is also allowing the federal investment and production tax credits for wind projects to expire at the end of this year.
NRG has reportedly said that it is those actions, by Congress, that have made the Delaware project un-financeable, especially without a partner.