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Harsh winds from extreme storms battered Cape Cod this past winter and resulted in power outages across the region, and as summers get warmer, beachgoers rely more and more on cooling breezes off the bay. Now, the winds off Cape Cod could be a solution to both the region’s electricity constraints and the threat of extreme weather caused by climate change.
Today, the Department of Energy announced that it has issued a conditional commitment for a $150 million loan guarantee to the Cape Wind Project, which would be the first commercial-scale offshore wind energy project in the U.S. if constructed off Nantucket Sound. It could supply a majority of the electricity needs of Cape Cod and the Islands.
In fact, the gusts felt along the Cape are some of the best offshore wind resources in the U.S., but this is just one of many areas with offshore wind resources that if harnessed, could generate reliable electricity while reducing greenhouse gas emissions. That’s why the Department has been supporting the development of offshore wind as part of the President’s all-of-the-above energy
By working with the industry, the Department has helped drive down the cost of onshore wind in the United States by about 90 percent since the early 1980s. Through a $1.3 billion partial loan guarantee to the Caithness Shepherds Flat project, one of the world’s largest wind farms, the Department’s Loan Programs Office (LPO) helped to show that large-scale onshore wind energy can be commercially viable in the United States. Today, onshore wind can power 15.5 million American homes and drives annual investment of $25 billion.
We hope to replicate that success with offshore wind.
After an initial selection in 2012 of seven award recipients from diverse geographic regions, the Department’s Wind Program selected three projects earlier this year to receive additional funding for deployment by 2017. These projects will establish key pathways for future offshore wind developers, reducing the costs of planning, constructing, and operating offshore wind plants in the United States.
At LPO, our mission is to take innovative technologies like offshore wind that have been successfully demonstrated in the United States at a smaller scale and help provide the project financing to deploy at commercial scale for the first time. If built, the Cape Wind Project could transform the fishing ports and manufacturing towns in Eastern Massachusetts into a hub for a vibrant U.S. offshore wind industry. The lessons that could be learned from this project can help catalyze similar projects in other areas of the U.S. with excellent offshore wind resources.
As we’ve seen with onshore wind and utility-scale solar, as more projects are built prices come down. We also see industries bloom that are becoming some of our nation’s best sources of economic development. Since 2005, U.S. domestic content of onshore wind turbines increased from less than 25 percent to approximately 72 percent at the end of 2012. Today, the wind industry employs more than 50,000 Americans.
The National Offshore Wind Strategy, which aims to deploy 54 gigawatts (GW) of offshore wind by 2030, was created to tap into the potential of this domestic resource. The conditional commitment announced today to the Cape Wind Project is an important next step to harnessing America’s offshore wind resources to provide reliable electricity, address climate change and promote economic development.