New Rules for Offshore Clean Power On the Way

Some long-awaited rules and regulations related to offshore renewable development could be introduced in the U.S. this year, potentially cutting the red tape for startups looking to put their wind, wave, or tidal projects in the water. Ken Salazar, the new head of the Department of the Interior, announced this week that he plans to set a framework for offshore renewables “in the coming months.”


The rules were supposed to be finalized a few years ago as part of the Energy Policy Act of 2005, with the offshore renewable guidelines required to be issued within nine months of the bill being signed into law. “The Bush administration was so intent on opening new areas for oil and gas offshore that it torpedoed offshore renewable energy efforts,” said Salazar at a news conference in Washington.

Offshore wind energy is only just beginning to make headway in the U.S. The 420-megawatt Cape Wind project in Massachusetts received a favorable review from the Minerals Management Service — part of the Interior Department — last month, after more than seven years of environmental review.

While Salazar’s new guidelines could come too late to help Cape Wind, there are at least two more big offshore wind projects on the way in the Northeast that could benefit from a streamlined bureaucracy — a 400-MW project in Rhode Island from Deepwater Wind, and a 350-MW project in New Jersey from Deepwater Wind and the Public Service Enterprise Group (s PEG).

The bigger benefit could be for the nascent ocean power industry. Still unproven on a large scale, there are only a handful of projects worldwide currently in the ocean and feeding energy into a grid. In the U.S., there’s a confusing, and sometimes contradictory, array of federal regulations for ocean power, according to the New York-based Environmental Defense Fund, which had a chat with the then-incoming Obama administration late last year on wave and tidal power.

One big issue Salazar may need to tackle in his new framework is a jurisdictional dispute between the Federal Energy Regulatory Commission and the Minerals Management Service. Both agencies have claims on ocean power projects in certain offshore areas.

Clearing up that interagency squabble could be a boon to Lockheed Martin (s LMT) and Ocean Power Technologies (s OPTT). The two announced plans last month to work together on a utility-scale wave power project that would be located off the coast of California or Oregon.