Wind energy development in the Great Lakes has seemingly stalled, but a new Memorandum of Understanding (MOU) between five Great Lakes states and ten federal agencies may renew hopes for locating wind turbines in the Great Lakes.
The purpose of the MOU is to “support the efficient, expeditious, orderly and responsible review of proposed offshore wind energy projects in the Great Lakes by enhancing coordination among federal and Great Lakes state regulatory agencies.” Specifically, the MOU requires the creation of a regulatory roadmap, to set forth a streamlined permitting process with joint reviews of applications and clear guidance on data collection, permit processing times and agency responsibilities. Although the MOU will likely clarify the role of federal agencies in the permitting process for offshore wind farms, it does not address the underlying cost of developing wind energy in the Great Lakes, which has stymied previous efforts.
The Great Lakes is a substantial wind resource, with the potential for more than 700 gigawatts to be generated by wind turbines. This estimate includes the more than 143,000 megawatts of wind power that could be generated off of New York’s Great Lakes coastlines alone. Thus, it was a huge disappointment to many when the New York Power Authority (NYPA) abandoned its effort to generate up to 500 megawatts of electricity on Lake Erie and Lake Ontario, citing the likely cost to the state of up to $100 million annually in subsidies and a construction cost of up to $1 billion.
Moreover, wind energy development could potentially drop off at the end of this year, with the expiration of the production tax credit. Is the MOU a sign that this tax credit will likely be renewed and wind development again made a policy priority? Or, as certain sources suggest, solar may be taking over the spotlight and seen as a better long-term investment because of lower prices for panels and new financing options. Thus, whether the MOU is in fact a valuable resource will be highly dependent on the future existence of tax incentives and price competitiveness with other energy sources such as solar and natural gas.