Delaware's legacy of questionable renewable energy projects loomed inescapably in the background Friday as a state panel formed to study the potential environmental and economic development benefits of offshore wind energy development began its work.
The Offshore Wind Working Group was established in August by Democratic Gov. John Carney, who said offshore wind power could contribute to Delaware's efforts to reduce air pollution while also creating job opportunities. Carney also hinted that Maryland's approval of two proposed wind farms expected to deliver 368 megawatts of power could offer an opportunity for Delaware to piggyback on such efforts.
But several members of the working group signaled Friday that they favor a go-slow approach that takes into account the failures of the past.
"I think the bottom line for this is for us not to make those same old mistakes, and simply do the careful engineering analysis," said state Sen. Harris McDowell III, D-Wilmington. "What do we get for the expenditure, and what's the gain?"
A key issue for the group is the costs and benefits for electric utility customers in Delaware.
"Somewhere, somebody's going to have to pay extra money to get a wind farm offshore," said Robert Howatt, executive director of Delaware's Public Service Commission. "Who's going to pay that money?"
Delaware's latest consideration of offshore wind energy comes a decade after its failed attempt to become the first state in the nation to develop an offshore wind farm. That project involved a company called Bluewater Wind, which signed a 25-year contract with Delmarva Power to provide electricity from a wind farm about a dozen miles off the southern Delaware coast.
After Bluewater Wind's parent company, an Australian investment firm, imploded under unsustainable debt, New Jersey-based NRG Energy bought the project in 2009. NRG, which owns a coal-burning power plant in Millsboro, pulled the plug on the wind project in 2011 after the elimination of federal tax credits and loan guarantees for renewable energy projects.
Even as the Bluewater Wind project was sinking, state lawmakers in 2011 fast-tracked legislation to revise Delaware's renewable energy standards in order to accommodate efforts by Carney's predecessor, fellow Democrat Jack Markell, to land a fuel-cell manufacturing facility. Lawmakers acquiesced to Markell's request for quick action in his pursuit of California-based Bloom Energy, which promised hundreds of jobs at a new manufacturing hub on the site of a former Chrysler factory in Newark.
Bloom Energy promised to create at least 900 new jobs in Delaware, and state officials responded by offering more than $15 million in incentives.
Lawmakers also changed Delaware's renewable energy standards to include electricity supplied by a "qualified fuel cell provider," a term that applied exclusively to Bloom. They also allowed Delmarva Power to count electricity supplied by Bloom toward Delmarva's renewable energy requirements, even though the fuel cells were to be powered by natural gas — a nonrenewable resource.
Delmarva Power ratepayers, meanwhile, have paid nearly $130 million in energy surcharges that were part of the Bloom Energy deal, even though the company, as of last year, had created less than a third of the promised 900 jobs. The surcharges are expected to continue until 2033.
"This could become another offshore Bloom, so to speak," Howatt warned fellow members of the offshore wind group.
The panel is scheduled to submit a report by Dec. 15 with recommendations on short- and long-term strategies for developing wind power to serve Delaware, as well as plans to develop job opportunities in the offshore wind industry.