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California Legislature Passes Landmark Legislation To Bolster Offshore Wind Energy

  • Sep 16, 2021 8:58 am GMT
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Source: 
Mondaq Business Briefing

Highlights

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  • The California Legislature on Sept. 9, 2021, approved landmark state legislation - Assembly Bill (AB) 525 - that requires the California Energy Commission (CEC) to prepare a strategic plan for developing offshore wind resources, as well as specific megawatt targets for 2030 and 2045. The legislation is now awaiting the governor's signature.
  • The CEC is statutorily mandated to submit the strategic plan to the California Natural Resources Agency by June 30, 2023, and prior to that, release a draft strategic plan for public review and comment. In addition to the strategic plan, the CEC is required to establish megawatt planning goals for 2030 and 2045 by June 1, 2022.
  • Project developers, energy customers and stakeholders alike should be aware of AB 525 and the following précis on the current status for offshore wind projects in California.

The California Legislature on Sept. 9, 2021, approved landmark state legislation to facilitate California's offshore wind energy potential. Assembly Bill (AB) 525 requires the California Energy Commission (CEC) to prepare a strategic plan for developing offshore wind resources in the years to come, as well as specific megawatt targets for 2030 and 2045. The legislation has been submitted, and is now awaiting the governor's signature.

Project developers, energy customers and stakeholders alike should be aware of AB 525 and the following précis on the current status for offshore wind projects in California.

AB 525

AB 525 requires the CEC - in conjunction with other key state agencies (e.g., State Lands Commission, California Public Utilities Commission) - to develop a strategic plan for offshore wind development installed in federal waters off the coast of California. The strategic plan must include five chapters, at a minimum, covering the following components:

  1. identification of sea space
  2. economic and workforce development, and identification of port space and infrastructure
  3. transmission planning
  4. permitting
  5. potential impacts on coastal resources, fisheries, Native American and Indigenous peoples, and national defense, and strategies for addressing those potential impacts

The CEC is statutorily mandated to submit the strategic plan to the California Natural Resources Agency by June 30, 2023, and prior to that, release a draft strategic plan for public review and comment.

In addition to the strategic plan, the CEC is required to establish megawatt planning goals for 2030 and 2045 by June 1, 2022.

BOEM's Leasing Process

Under the Energy Policy Act of 2005 and Outer Continental Shelf (OCS) Renewable Energy Program (30 C.F.R. §§ 585.100 et seq.), the U.S. Department of the Interior's Bureau of Ocean Energy Management (BOEM) may issue leases authorizing developers to use a designated portion of the OCS for renewable energy projects. Once awarded, a lease does not grant developers with the right to construct facilities, but rather, the exclusive right to plan an offshore wind project.

BOEM's leasing process for offshore wind projects generally consists of the following four stages:

  1. Planning  - BOEM will initiate the planning phase for potential offshore wind development by identifying and analyzing suitable areas for wind development and engage in meetings with stakeholders; federal, state and local decision-makers; and tribal entities. BOEM will identify Call Areas, request interest from stakeholders and then designate smaller "Wind Energy Areas" within those Call Areas.
  2. Leasing - BOEM must publish Proposed Sale Notice (PSN) and Final Sale Notice (FSN) in the Federal Register, which are subject to 60-day and 30-day public comment periods, respectively. These notices identify, among other things, the area to be leased, lease term, payment requirements, site-specific lease stipulations (if any) and auction details. If multiple developers express interest in a given area, BOEM will proceed with a competitive leasing process, in which developers bid against each other to win the lease.
  3. Site Assessment - After leases are awarded, the developer-lessee must prepare and submit a Site Assessment Plan (SAP) for BOEM's approval, which contains detailed plans for the installation of meteorological tower and/or buoys. It is also at this stage in which a developer-lessee will conduct technical site-specific surveys (e.g., marine fish and mammal life, archeological resources). BOEM may approve, conditionally approve or deny the SAP.
  4. Construction and Operations - The developer-lessee must prepare and submit for BOEM's approval a Construction and Operations Plan (COP). COPs detail the facilities that the developer-lessee proposes to construct, along with all proposed construction and operation activities for the project. A COP should also contain a conceptual decommissioning plan for all planned facilities.

Current Schedule for California

California's offshore wind potential is currently focused on two "Call Areas": 1) the Humboldt Call Area (North Coast) and 2) the Morro Bay Call Area (Central Coast). The Humboldt Call Area is farther along in the planning process, as BOEM had previously issued a Call for Information and Nominations in October 2018. More recently, on July 28, 2021, BOEM formally designated the Humboldt Wind Energy Area (WEA), and announced that it will be proceeding with an environmental review under the National Environmental Policy Act (NEPA).

As for the Morro Bay Call Area, on July 28, 2021, BOEM issued a Call for Information and Nominations for the Morro Bay Call Area. The comment period concluded on Sept. 13, 2021, with a total of 52 comments received. In the future, BOEM intends to "catch-up" the Morro Bay Call Area into a single, concurrent planning process for both Call Areas. The agency expects to publish a single PSN and FSN for both lease areas, and issue lease sales as early as summer 2022.

NEPA and California Environmental Quality Act (CEQA)

BOEM's designation of a WEA marks the beginning of the environmental review process under NEPA. Once a WEA is designated, BOEM generally will prepare and release for public comment an Environmental Assessment (EA) which will analyze the environmental effects of site assessment activities (not development activities).

BOEM's approval of a developer-lessee's COP is also subject to NEPA. Typically, BOEM will issue a Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS) for any wind energy facility and infrastructure proposed. The EIS will consider the environmental effects of BOEM's approval of the COP, as well as project alternatives and mitigation measures to avoid or reduce the severity of significant environmental effects. The EIS will likely provide environmental clearance for not only BOEM's approval, but also other approvals required from other federal cooperating agencies (e.g., U.S. Army Corps of Engineers - Section 10 Permit under the River and Harbors Act and Section 404 Permit under the Clean Water Act; National Marine Fisheries Service - Incidental Harassment Authorization under the Marine Mammal Protection Act).

Although offshore wind projects are slated to be located in federal waters that does not insulate such projects from state environmental review under CEQA. Offshore wind projects will likely require state discretionary approvals for not only on-land activities, but also offshore activities with the potential to impact coastal resources within the state's jurisdiction. State-level approvals may include the issuance of a tidelands lease, a coastal development permit (CDP), and/or Consistency Determination(s) or Certification(s) under the Coastal Zone Management Act.

The logical proposal would be for federal and state agencies to coordinate their NEPA and CEQA obligations in a joint environmental review document (i.e., an EIR-EIS). While the environmental review coordination process remains to be seen, the CEC's strategic plan required under AB 525 must include recommendations on NEPA and CEQA coordination.

Conclusion and Takeaways

The U.S. National Renewable Energy Laboratory estimates that California has the technical potential for 200 gigawatts of offshore wind generation. Whereas projects off the East Coast use predominately fixed-foundation technologies, the vast majority of California's offshore wind potential is located in the OCS at depths greater than 60 meters. The primary technology for offshore wind development in California is expected to be floating wind turbines. While floating wind projects have not yet been deployed at scale in comparison to their ocean floor-mounted counterparts, at least two floating turbine projects in Europe have proven to be successful (the 30 MW Hywind project in Scotland and the 24 MW WindFloat Atlantic project in Portugal).

Although California's offshore wind planning processes has languished in comparison to East Coast states (e.g., Massachusetts, New York and New Jersey), that is quickly changing. Taken together, AB 525's mandates and BOEM's planning processes signal realistic prospects for large-scale offshore wind projects, which may be coming sooner than previously expected.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mr Kevin J. Ashe

Holland & Knight

50 California Street

Suite 2800

San Francisco

CA 94111

UNITED STATES

Tel: 6175232700

Fax: 6175236850

E-mail: webcontent@hklaw.com

URL: www.hklaw.com

 

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