Betting big on offshore wind could reduce the cost of electricity in Maryland, environmentalists say
Environmental activists pushing for more development of offshore wind turbines in the Atlantic ocean released a report exploring potential economic windfalls for electric consumers in Maryland. The new report estimates that if regulators approve 6,000 megawatts of offshore wind projects, three times as much that’s already permitted, electric consumers may see a smaller bill. That calculation is based on what’s known as the standard offer service rate, which is how much electric utility companies charge, but does not include extra fees or other considerations.
New Jersey-based energy consulting firm Gable Associates, estimates that by 2031 if Maryland bets big on offshore wind the price for standard offer service could drop from 8 cents per kilowatt to 4 cents per kilowatt.
The type of electricity generation that costs 8 cents per kilowatt is a mix of fossil fuels and nuclear power. The largest net electricity generation in Maryland by source is natural gas-fired power plants, as of August 2022, according the U.S. Energy Information Administration.The second most common source is nuclear power, followed by non-hydroelectric renewable energy, federal data shows.
Isaac Gabel-Frank, a vice president of the firm and the lead author of the study, said there would be other benefits from reducing pollution as offshore wind could replace fossil fuel burning electricity generators.
“There’s a lot of air pollution avoided,” he said. “When quantified in a monetary way, it could be $24 billion over the [30-year] period of offshore wind.”
The Gable Associates report was released by the Chesapeake Climate Action Network, an environmental advocacy nonprofit. It was funded by The Clayton Baker Foundation and the Abell Foundation.
While the report’s findings rely on the estimate of 6,000 megawatts of offshore wind being pumped into the electric grid, the Maryland Public Service Commission has approved permits for roughly 2,000 megawatts.
Those offshore wind projects aren’t under construction yet, but are still winding through the federal approval process. And there are no more proposals on the state docket for more wind development.
Josh Kaplowitz, of the American Clean Power Association, a coalition of renewable energy companies, said that means offshore wind companies need a more predictable process and the federal Bureau of Ocean Energy Management needs to make more offshore acreage available for lease.
“And we need more real estate, more leases so that we can have the opportunity to build more projects,” he said. “Not just even to meet the increased gigawatt goals, but also to make sure that the onshore supply chain being built in Maryland, and across the region is sustainable.”
In addition, Kaplowitz said, state lawmakers need to pitch in if Maryland is to achieve the goals of the Climate Solutions Now Act passed during the last General Assembly session. The measure calls for the state to reduce greenhouse gas emissions by 60% of 2006 levels by 2031 and bring them to zero by 2045.
“The Maryland General Assembly needs to pass a law in this next session that adds this additional six gigawatts to the state's offshore wind goal,” he insisted.
Del. Lorig Charkoudian, a Montgomery County Democrat who has been involved in climate change legislation, predicted that will happen next year.
“You'll be seeing legislation coming that will build the transmission solution for how do we get the six gigawatts, that will be building new ways of financing offshore wind that don't that don't put the risk on ratepayers, that really makes sure the ratepayers only ever see the savings.”
The study also pointed to economic benefits because of the jobs created to build the giant turbines and install them. US Wind, one of two businesses with plans for wind farms off Ocean City, announced last August a deal to bring steel production back to the old Bethlehem Steel site at Sparrows Point.
“It now tells us that the steel workers now have a future,” said Jim Strong, of the United Steelworkers Union. “These all will be good paying union jobs, we want to put apprenticeship programs in to train people how to do these jobs.”
But not everyone is happy with the idea of giant wind turbines just 13 to 17 miles off the beaches. Ocean City Mayor Rick Meehan, who did not respond to requests for comment this week, told WYPR in August 2021 that he fears it would hurt the tourist industry that is at the heart of his town’s economy.
“I think the view shed of the town of Ocean City is something that’s important,” he said. “It's something you and I can enjoy, that pristine view today. But future generations won't see that same view once these turbines are constructed. And honestly, I think that's a shame.”
He pointed to studies by the University of Delaware and North Carolina State University that found visible offshore wind turbines would hurt tourism.
But a November 2021 report by Montclair State University in New Jersey predicted that wind farm tourism would increase revenues in Ocean City, NJ. And a November 2022 poll conducted for Climate Nexus, a clean energy advocacy group, found most coastal residents favored offshore wind.