Offshore Energy: Five Governors Signed a Pact to Allow for Offshore Wind Proposals for Great Lakes

Jul 1, 2012

The wind off Lake Michigan is legendary. It most famously contributes to the “Windy City” image of Chicago, provided a name for an ill-fated 1975 football team called the Chicago Winds and was immortalized as the “hawk wind” in the first line of Steve Goodman’s song “A Dying Cub Fan’s Last Request.”

In fact, the wind blows across a largely uninterrupted expanse of 22,400 square miles of water, Lake Michigan, which is slightly smaller than West Virginia and larger than nine of the United States. 

“There has always been wonderful wind over the Great Lakes,” says Victoria Pebbles, program director for the Great Lakes Wind Collaborative, a coalition of wind energy stakeholders working to facilitate the sustainable development of wind power in the Great Lakes. 

If there was a way to harness all of the wind on the Great Lakes, about 740 gigawatts of energy would be produced, according to a 2011 U.S. Department of Energy report on national offshore wind strategy. With one gigawatt equaling about 3.4 million megawatt-hours of electricity annually and an average home requiring 1.15 megawatt-hours a year (according to the U.S. Energy Information Administration), the potential for wind energy is staggering. Imagine capturing not only all of the wind energy on the Great Lakes, but also adding the offshore wind along America’s coastlines, in the Gulf of Mexico and around Hawaii. The capacity of the current U.S. electric power system could be close to quadrupled, the U.S. Department of Energy reports. “That shows the tremendous opportunity for the resource,” says Christopher Long, manager of offshore wind and siting policy for the American Wind Energy Association. 

 

Design for an offshore wind turbine and platform.
Credit National Renewable Energy Laboratory

Now, it is crazy to think every last offshore breeze could be captured and turned into usable electricity. The issue is far more complicated than looking at it in simple terms of how much energy is available. There are currently no offshore wind farms in the United States for many reasons. Natural gas is plentiful and cheap. Offshore wind turbines are extremely expensive and can cost more than five times that of an onshore turbine, according to industry experts. Also, there is no infrastructure in place to transfer electricity from offshore wind farms to the power grid. Some people don’t like the looks of turbines; some fear their impact on the environment; and others don’t think the nation’s waters should be used to feed our hunger for power. 

Still, the federal government and states such as Illinois are pushing for renewable energy. President Barack Obama set a goal in his 2011 State of the Union Address for 80 percent of America’s electricity to come from clean energy sources by 2035. In March, a Memorandum of Understanding between 10 federal agencies and the governors of Illinois, Michigan, Minnesota, New York and Pennsylvania was signed to facilitate offshore wind proposals for the Great Lakes. Illinois law, similar to laws in other states, requires 25 percent of the state’s electricity to come from renewable resources by 2025. 

To ignore the potential of offshore wind and the push for renewable energy is to miss out. “We think the day is coming pretty quickly when there will be offshore wind farms in the United States,” says Patrick Gilman, wind market acceleration and deployment team leader in the wind and water power program with the U.S. Department of Energy. “It is a question of when and not if.” He sees wind farms in the Great Lakes as part of that movement.

State Rep. Robyn Gabel, a Democrat from Evanston, has been leading the way in the state’s creation of a permitting process for offshore wind farming in Lake Michigan. Two years ago, Evanston, which is actively seeking ways to reduce its greenhouse gas emissions, identified developers interested in pursuing an offshore wind farm but discovered that no state permit process existed to allow such a farm to be built. “We realized we needed to be clear about how one goes about leasing the lakebed and the process for establishing this kind of renewable energy in the lake,” Gabel says. And so, Gabel sponsored legislation creating the Lake Michigan Offshore Wind Energy Advisory Council to draft an advisory report for the General Assembly that was released at the end of June. “One reason to set up this task force is to raise all the questions and the issues we would need answers for before we put an offshore wind farm in the lake,” Gabel says. 

The council looked at a number of areas such as: what criteria should be used to evaluate applications, how to identify areas favorable and unfavorable for development, what process should be used for the public to weigh in on development proposals, how the state should be compensated for leasing the lakebed and what others have learned from offshore wind development.

“It’s a big issue, and we have to get it right,” says Todd Main, deputy director for the Illinois Department of Natural Resources. “We’ve got a good sense about where we need to go as a trustee for Lake Michigan and how we protect and evaluate the habitats, wildlife and navigation of the lake.” The next move is the creation, by the state legislature, of another committee to look at how the generation of offshore electricity gets into Illinois’ electric grid and then what role the Illinois Power Agency and Illinois Commerce Commission would play. “Where does that happen? How does that impact electricity transfers? Who pays for it?” Main asks. “There needs to be more study.” The findings of the new committee then likely would be meshed with information gathered by the current advisory council to create permitting and regulatory legislation, he says. 

While offshore wind farming policy appears to be shaping up in Illinois, other factors are putting a damper on the possibility of wind turbines in Lake Michigan. Just because Illinois officials are crafting a permitting process doesn’t mean turbines should be allowed in the lake, says Joel Brammeier, president and CEO of Alliance for the Great Lakes, an independent citizens’ organization with a mission to conserve and restore the Great Lakes. “What I think is essential to this process is [that] legislators enter into any conversation about offshore wind with a clear understanding of the legacy they will be leaving for future generations,” he says. “I’m not comfortable that offshore wind is the right reason to build on the bottom of the lakebed. To put it simply, if you can build one thing in the lake, why not another?” His concerns can’t be dismissed as they go to the heart of the public trust doctrine, a federal and state court common law that recognizes that the state of Illinois holds public water resources, including Lake Michigan, in trust for the benefit of and use by its citizens. Court cases historically have allowed the lake to be used for public benefit, such as the expansion of Lincoln Park, but not for private use, such as the expansion of the University of Loyola’s campus. 

Besides that philosophical question, Brammeier also has concerns about what happens if a turbine becomes outmoded. He questions who will deconstruct the wind farm and pay for it. “It forces us to face the reality there is no such thing as a zero footprint energy source,” he says. “We’re choosing whether to put that footprint on the bottom of the Great Lakes.”

Other groups concerned with the well-being of the Great Lakes say that issues ranging from environmental concerns to the high cost of offshore turbines can be addressed. The Sierra Club, for instance, is in favor of appropriately sited wind developments. “Our top organizational priority is climate change and getting the country off of coal,” says Emily Green, Great Lakes program director for the Sierra Club. “We need to find solutions, replacement energy, and we feel this will be accomplished through a mix of things, including wind and solar. We believe offshore wind in some places offers the benefit for utilities to have large-scale wind energy close to load centers in areas where we are seeking the retirement of coal-fired plants.” The Sierra Club is working with the Great Lakes Wind Collaborative and the National Oceanic and Atmospheric Administration Great Lakes Energy Research Laboratory to gather data to build a smart siting platform. “We’re trying to put the tools in place before major projects come to the drawing board, so they can be sited appropriately,” Green says. “We have the chance to get it right in the Great Lakes.”

Other barriers to wind turbines in Lake Michigan are the need for technological advancements, the high cost to build turbines and the economics of energy. Lake Michigan’s average depth is too deep to accommodate turbines, and ice is a problem. Research is being done to build floating turbines, to develop turbines that can be anchored at greater depths and to deal with ice, says Pebbles of the Great Lakes Wind Collaborative. Any successful project will be a balance of cost, public approval and environmental constraints, she says.

For wind developers, the high cost of building offshore wind turbines in Lake Michigan, which cost five to six times more than an onshore turbine, is too much to overcome, says Kevin Borgia, director of the Illinois Wind Energy Coalition. “To say that we would focus on offshore wind that would be several times the cost, the private sector isn’t interested,” Borgia says. “We should focus our energy on opportunities that are effective.” 

Instability in Illinois’ wind power market is the biggest thing holding it back, Borgia says. Deregulation of the state’s electric market has created a questionable marketplace for power as consumers are buying short-term contracts. As a result, wind farm developers have difficulty finding financing for their projects because they can’t guarantee who will buy their power over more than a few years. Long-term renewable contracts would stabilize the market and give investors the guarantees they need to support wind projects, Borgia says. “You’ve got a very complex power market,” he says. “That uncertain market is the reason we need reform. If lawmakers were to fix that problem, that would build wind more than anything else.”

Also at issue is the expected expiration at the end of this year of the federal Production Tax Credit subsidizing kilowatt hours for utility-scale wind power producers. The credit is in place to make wind energy competitive with alternatives. Wind energy supporters say a long-term credit, rather than one in jeopardy of losing funding every few years, also would provide stability to the industry. 

Despite the market uncertainty, Chicago has emerged as a hub in the wind business. Illinois is ranked seventh in the United States in wind-powered generating capacity with 2,742 megawatts, according to an Illinois State University report. Illinois’ membership in regional power grids serving eastern and southern states means there is a demand for power from Illinois, Borgia says. Also, 15 wind companies are based in Chicago, in part because of easy transportation to wind developments nationally and internationally. 

The cheap cost of natural gas also serves as a barrier to the growth of wind power in the United States. Meanwhile, wind development overseas has been spurred by the unreliable conveyance of natural gas and Europe’s concern about climate change, says Chris Wissemann, CEO of New Jersey-based Fishermen’s Energy and managing director of Freshwater Wind, which is working to bring an offshore wind project off Ohio’s Lake Erie shore. He says Europe is 15 to 20 years ahead of the United States in harnessing wind energy. Wind turbines account for about 94,000 megawatts of electricity, supplying more than 6 percent of the European Union’s electricity, according to the European Wind Energy Association. Of that, 4,000 megawatts come from offshore turbines, the first one built in Denmark in 1991. In the United States, about 3 percent of the nation’s electricity is produced by the wind, the U.S. Department of Energy reports.

Until the United States needs energy from sources like the wind, it will be difficult for the market to grow unless it has significant government support. The DOE has launched the Offshore Wind Innovation and Demonstration initiative to reduce the cost of offshore wind energy and to reduce the timeline for the deployment of offshore wind projects. Streamlining the approval process for projects is one goal, and another is funding. The department is considering grant requests for $180 million in an effort to get a small project in the water by 2014 and three more projects demonstrating technological advances by the end of 2017. Money will be awarded this fall, says Gilman of the DOE. “We’re doing a lot of work figuring out what issues need to be overcome to realize [wind power] opportunity,” Gilman says.

Job creation is another reason to invest in the industry. In Illinois, according to a 2011 report from the Center for Renewable Energy at Illinois State University, the 17 biggest wind farms:

  • Created about 13,000 full-time jobs during construction periods, paying out about $762 million.
  • Support about 600 permanent jobs in rural Illinois, paying about $35 million.
  • Pay out about $10 million to landowners in rent from wind farm developers.
  • Generate $22 million annually in property taxes and will generate a total economic benefit of $4.1 billion over the life of the projects.

“Wind energy is an American success story,” says Long of the American Wind Energy Association. He says there are 500 manufacturing facilities supporting the wind industry that employ 30,000 Americans. “It’s anticipated that offshore projects will create thousands more.”

But any growth in offshore wind will be slow-going, says Wissemann, who also lives in Evanston and served on Illinois’ wind advisory committee. He predicts the offshore wind industry will develop here much as it has in Europe. Original projects began with the development of small installations of fewer than a dozen turbines and then grew to the size of a utility like a coal plant with 50 to 200 turbines. Finally, large wind farms were developed. Projects off the Atlantic coast likely will be the first offshore farms in the United States.

“Until you build a demonstration, no one really knows what these things are all about,” says Wissemann. “Projects are not going to pop up like mushrooms. I think it is a common fear that turbines will be built all over the place.” Wissemann estimates Illinois is five years away at the earliest from having a demonstration offshore wind project in Lake Michigan, with the possibility of a full-scale project five years later. 

Whatever the timeframe, Illinois intends to do it right, Gabel says. “We treasure our lake. We wouldn’t want to do anything that would hurt it. On the other hand, using so many nonrenewable resources is destroying our Earth. We need to find some balance.”

Kristy Kennedy is a Naperville-based free-lance writer.

Illinois Issues, July/August 2012