New Delaware law greenlighting up to 1.2GW of US offshore wind signed by governor
Law puts President Biden's home state in sector game but development will struggle with pricing caps as amid high industry costs
Delaware governor John Carney signed the Energy Solutions Act of 2024 that among other things authorises procurement of 1.2GW of “fiscally responsible” offshore wind to help meet 2050 net zero emissions targets.
“Delaware is the lowest lying state in the country, and we have seen climate change affecting our communities. I’m proud of the work that we have done to mitigate those impacts, reduce greenhouse gases, and find cleaner ways to generate energy,” said governor Carney in a statement 5 September.
Despite President Joe Biden's support for offshore wind, this is his home state's first sector target following early efforts that faltered on high prices and permitting delays.
It gives Delaware “options to move forward on purchasing wind-generated renewable energy in a fiscally responsible way,” said Carney, but doesn't require sector development.
Critically, it caps offtake rates at 110% of “the average price that Delmarva Power has paid for power and renewable energy compliance over the prior three years,” according to the synopsis.
Exelon-owned Delmarva Power is the state's main provider, with 10 million customers in Delaware and Maryland.
This ‘Delaware Benchmark Price’ could be a major obstacle for developers as costs for US offshore wind have skyrocketed in recent years, far outpacing other renewables.
“We are confident that we will see bids at the benchmark price when we go out for solicitation sometime next year,” he added.
Sam Salustro, vice president of strategic communications at Oceantic Network, said passage of the Energy Solutions Act “represents a pivotal moment for Delaware and an important milestone for the offshore wind industry up and down the East Coast.
“Delaware has always been an offshore wind pioneer and critical thought leader in the industry. The state now takes its rightful place as an active offshore wind state,” he added.
MidAtlantic demand
Delaware joins a growing throng of MidAtlantic states with strong offshore wind targets, including Maryland’s 8.5GW mandate, New Jersey’s executive goal of 11GW, and Virginia’s required 5.6GW.
Last month the US auctioned two leases holding some 6.3GW of capacity off these states in its first Central Atlantic round, with another tender in process to meet booming demand.
The Delaware Energy Solutions Act enables regional collaboration with neighbouring states on procurement to enhance economies of scale, vital for the tiny state, the smallest in the US by area with a population of only 1 million.
It also strengthens the wider market by creating processes for transmission siting and allows private developers to use state-owned roadway rights-of-way for their infrastructure.