Power April 2022 Intl - 16

LEGAL & REGULATORY
California and Oregon
Sail Forward on
Offshore Wind
Seth Hilton and Ken Pearson
he Biden administration in 2021 announced its goal of
developing 30 GW of offshore wind energy by 2030.
Deep water off the West Coast means that any wind energy
generation on this side of the U.S. must float.
Advancements in floating offshore wind (FOSW) technology
T
have opened a vast expanse of federally controlled waters to
development. Offshore wind lends itself to large projects. For
example, in an auction in January, Scotland leased 17 projects
totaling 25 GW. More than half of the projects are FOSW.
The Offshore Wind Development Process
Since 2011, the Bureau of Ocean Energy Management
(BOEM) has managed the leasing and development of
offshore wind on the outer continental shelf. BOEM has
developed a four-step process for developing offshore wind.
The agency identifies and designates Wind Energy Areas
(WEAs) where development should be permitted; issues a
lease, via a competitive or non-competitive process; reviews
and approves the lessee's proposed site assessment plan
(SAP); and reviews and approves the lessee's construction
and operation plan (COP).
BOEM conducts an environmental assessment (EA)
once the WEAs are designated, before issuing a lease. A
lease provides the lessee with the exclusive right to, within
one year, submit an SAP. The SAP is also subject to an EA
before BOEM will approve it. Within five years of the lease,
the lessee must submit a COP, which will almost certainly
be subject to an Environmental Impact Statement before
BOEM will approve it. If the COP is approved, the lessee
will then have a 25-year operation lease.
To reach the 30 GW-by-2030 goal, BOEM has promulgated
an aggressive timetable, which thus far has remained on
schedule. BOEM has already designated two WEAs off the
coast of California, and the agency has released its draft EA
for Humboldt, the first of these. The Humboldt WEA starts
20 miles off the coast, west of Eureka, and this summer
BOEM expects to offer up to three leases totaling 1.6 GW of
capacity. Only a few months behind is the draft EA for the
Morro Bay WEA, and leases totaling 3 GW are expected this
fall. Later this year, BOEM also is anticipating the designation
of a WEA off the coast of Oregon, totaling 2.8 GW.
The economics of FOSW are particularly attractive in
California, and the state has taken the lead in supporting
FOSW deployment. Because of all the solar power in
California, energy prices drop significantly during the middle
of the day, sometimes approaching zero. However, the
offshore wind energy potential tends to peak between 7
p.m. and 8 p.m., which is near the peak price of California's
infamous duck curve.
16
Offshore Wind Planning Goals
California in September 2021 passed Assembly Bill 525,
which requires the California Energy Commission (CEC) to
establish offshore wind planning goals for 2030 and 2045.
The CEC must submit a strategic plan to legislators by June
2023. In creating the plan, CEC will identify suitable sea
space, evaluate the infrastructure investments needed to
reach the planning goals, and develop a permitting roadmap
with timeframes.
The California Public Utilities Commission (CPUC) also
has been focusing increased attention on the potential
procurement of offshore wind. A recent proposed decision
targets the buildout of at least 1,708 MW of offshore wind
generation capacity by 2032. The CPUC also has asked
the California Independent System Operator (CAISO)-the
state's power grid operator-to evaluate the transmission
needs and costs to interconnect about 8 GW of offshore wind
at various potential locations including Humboldt, Diablo
Canyon, and Morro Bay. The agency will use the results of
that analysis in its next integrated resource planning cycle
to consider whether additional amounts of offshore wind
should be procured.
In anticipation of the 3 GW expected to be leased in the
Morro Bay WEA, and the expected decommissioning of the
nearby Diablo Canyon Nuclear Power Plant, the proposed
decision would also require Pacific Gas & Electric to consult
with the CPUC prior to disposing of any of the transmission
capacity currently used by the Diablo Canyon facility.
Humboldt Bay Port, the northernmost port in California,
would require more than $100 million in upgrades to handle
FOSW infrastructure in its nearby WEA, and California has
committed $11 million to support a federal grant application
needed to make those upgrades.
More circumscribed than California, the Oregon Legislature
is still requiring the Oregon Department of Energy (ODOE)
to study the benefits and challenges of FOSW through a
literature review and stakeholder engagement. The ODOE
has completed the literature review and first stakeholder
engagement. Two more stakeholder engagement meetings
are expected before the ODOE finishes and submits the
report. The report is due in September.
FOSW is developing quickly. BOEM is leading the charge
to get projects sited, while California and Oregon are taking
significant and important steps toward supporting the
critical onshore infrastructure requirements. For developers
interested in FOSW, now is the time to start planning. The
leasing window for the California market is fast approaching,
and Oregon is just around the corner. ■
-Seth Hilton is a partner, and Ken Pearson
is an associate, with Stoel Rives LLP.
www.powermag.com
POWER | April 2022
http://www.powermag.com
Power April 2022 Intl

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