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1、U.S.OFFSHORE WIND HANDBOOK 20223U.S.OFFSHORE WIND HANDBOOK 20222Table of Contents Introduction 051.0 Offshore Wind Overview 07 1.1.Introduction 07 1.2.Market Drivers and Cost Reduction 08 1.3.Global Market Overview 08 1.4.U.S.Market Overview 10 1.5.Offshore Wind Farm Components 112.0 U.S.Laws and Re

2、gulations Shaping Offshore Wind Development 15 2.1.Federal Offshore Policy and Regulatory Issues 15 Federal Offshore Policy 15 Bureau of Ocean Energy Management 16 Major Components of Federal Environmental Review Process 22 Maritime Law(The Jones Act)24 Federal Antitrust Law 25 2.2.Federal Energy Re

3、gulatory Commission:Regional Grids,Markets and Reliability 27 2.3.Federal Indian Law 31 2.4.State Offshore Wind Policy and Regulatory Issues 32 California 33 Connecticut 35 Maine 35 Maryland 36 Massachusetts 37 New Jersey 38 New York 40 North Carolina 41 Oregon 42 Rhode Island 42 Texas 44 Virginia 4

4、43.0 U.S.Offshore Wind Legal and Financing Framework 47 3.1.Equipment Supply and EPC 47 3.2.Interconnection 50 3.3.Power Purchase Agreements 54 3.4.Financing Offshore Wind Facilities 59 3.5.Insurance 65 3.6.Contract Lessons Learned from the United Kingdom 674.0 Project Phasing 715.0 Offshore Wind Fa

5、rm Infrastructure 75 5.1.Wind Turbine Generators 75 5.2.Foundation Structures 76 5.3.Offshore Electrical Systems 78 6.0 Development Challenges and Project Risk 837.0 Construction and Offshore Installation 87 7.1.Planning for the Marine Environment 87 7.2.Manufacturing 88 7.3.Offshore Installation 91

6、 7.4.Commissioning 99 8.0 Asset Management and Decommissioning 101 8.1.Pre-Operations 101 8.2.Operation and Maintenance 102 8.3.Life Extension 103 8.4.Decommissioning 104 9.0 Industry Lessons Learned 107 Contributors 110 Company Profiles 113U.S.OFFSHORE WIND HANDBOOK 20225U.S.OFFSHORE WIND HANDBOOK

7、20224In a period of challenge and uncertainty,the offshore wind industry globally has not only stood firm,but against all odds,surged in growth over the last two years.The U.S.offshore wind market was no different,particularly in 2021.After years of lobbying by a number of dedicated key stakeholders

8、,the Administration took a pivotal step to secure the future of the industry by committing to“double”offshore wind lease capacity in the United States by 2030 and deploy 30GW of offshore wind power by the same year.Congress subsequently enacted the Bipartisan Infrastructure Bill,which provides for s

9、ignificant government funding to support offshore wind and introduced a new long-term investment tax credit specifically for offshore wind facilities.In September 2021,Vineyard Wind 1 achieved financial close after securing its final federal permits for the U.S.first commercial scale offshore wind f

10、arm.News of the approval of South Fork wind farm came soon afterwards in November.In October,the Secretary of the Interior announced seven target areas for offshore wind leases on the east,west,and southern coasts of the lower 48,the first of which took place at the end of February 2022 and saw six

11、new leases awarded in the New York Bight region.Historically,the U.S.market has been driven by fixed bottom offshore wind on the Eastern Seaboard.However,we are seeing increasing momentum for floating offshore wind projects on the West Coast.This is reflected by Californias enactment of AB 525 in Se

12、ptember 2021,which mandates that the California Energy Commission create a plan for offshore wind development in federal waters.In addition,both California and Oregon were listed as target lease areas in the Secretary of the Interiors October 2021 announcement,with increasing activity from the Inter

13、governmental Renewable Energy Task Forces in these states in recent months.Offshore wind as a power source was harnessed more than 30 years ago.Now,the offshore wind industry is set for dramatic global growth.As the industry matures in Europe and developers in Asia,North America,and Australia move t

14、o follow Europes example,legal and regulatory frameworks are evolving quickly to accelerate project deployment and integrate these resources into the legacy power market.The Global Wind Energy Council(GWEC)reported postponed and canceled auctions in early 2020 due to COVID-19,with the sector bouncin

15、g back in the later part of the year and into 2021.According to the latest numbers published by the World Forum for Offshore Wind(WFO),the global offshore wind market commissioned a staggering 15.7GW in 2021.This was strongly driven by China(12.7GW)and helped set a new record for global offshore win

16、d installations.The total cumulative installed capacity for offshore wind is now approaching 50GW worldwide,up 40%from the previous year.Advances in technology and efficiencies in installation have contributed to huge reductions in the cost of offshore wind power,and this is expected to continue.In

17、addition to the obvious green credentials,offshore wind power is now economically competitive.We are also seeing growth in a multi-level approach to offshore development with off-and on-grid storage being considered and the pairing of offshore wind with hydrogen production,all of which will support

18、wider decarbonization of the power industry.This handbook is the result of collaboration between Kent,an international leader in offshore wind design,consultancy,and asset management;K&L Gates,a leading international law firm;and Mainstream Renewable Power,a pure-play renewable energy developer.The

19、intent of this handbook is to review the current progress in the U.S.offshore wind market and to outline some of the challenges faced by this dynamic and expanding market.Disclaimer:The U.S.Offshore Wind Handbook is a joint publication of Kent,K&L Gates LLP,and Mainstream Renewable Power for the ben

20、efit and information of any interested parties.This document is not legal advice or a legal opinion on specific facts or circumstances.The contents are intended for informational purposes only.IntroductionAndy MalpasKent,US Offshore Wind Market LeadElizabeth Crouse K&L Gates,Partner&Practice Group C

21、oordinator(Power)na Brosnan Mainstream Renewable Power,Head of Offshore Strategy&New MarketsDudgeon Offshore Wind Farm-Courtesy of SmuldersU.S.OFFSHORE WIND HANDBOOK 20227U.S.OFFSHORE WIND HANDBOOK 20226By:na Brosnan,Mainstream Renewable Power;Andy Malpas,Kent;Clare Kempkens and Charles Lockwood,K&L

22、 GatesThe offshore wind industry was launched in 1991 with the construction of the first offshore wind farm,Vindeby,off the coast of Denmark with 11 450kW turbines.The industry has continued to build on this technology,which has naturally led to Europe being the leader in offshore wind power.Offshor

23、e wind energy is harvested by wind farms constructed in the ocean many miles from the shore,traditionally on a shallow continental shelf.The farms consist of an array of wind turbines(up to 150)sat atop foundation structures secured to the seabed.The development of the shallower,typically up to 60m,

24、water depth coastal areas has utilized traditional fixed bottom foundations and has led to significant cost reduction in recent years.Deep water areas are now also being explored which will utilize floating wind turbines and according to the latest World Bank report,the potential for floating wind t

25、echnology is double that for fixed bottom offshore wind technology.Floating technology is on the cusp of commercialization with a number of successful demonstration projects installed around the world.The technology faces the same challenges as fixed bottom technology once did,however.Building an ef

26、ficient global supply chain and realizing the cost reductions now expected from offshore wind through scale and innovation are going to be important hurdles to clear.That being said,the routes to market are now defined for floating wind and a number of emerging markets are building strong pipelines,

27、such as the west coast of the U.S.,Scotland,France,South Korea,and Japan.Significant cost reductions are expected in the coming years as projects progress from demonstration through to full scale commercialisation.In January 2022,the Crown Estate Scotland announced the outcome of the ScotWind 1 leas

28、ing round,which resulted in 17 new sites totalling just under 25GW,with 60%of this capacity for floating offshore wind projects.The scale of this additional capacity to the Scottish market is a major game changer for the offshore wind industry in Scotland and firmly places Scotland at the forefront

29、of the emerging floating wind market.A brief recap why offshore wind?There are many benefits in the drive for offshore wind:Abundance of space offshore to develop capacity at scale Higher wind speeds and more consistent wind resource,resulting in more generation and higher capacity factors Reduced v

30、isual impact due to the distance from populated areas Use of larger turbines bigger and taller turbines can be used offshore,resulting in more electricity generation.Current offshore turbines being installed range from 6MW-14MW,with larger models being announced and industry sights on 20MW and beyon

31、d In the early days of offshore wind development,the cost of energy was high(US$215/MWh),however,in recent years offshore wind costs have tumbled(US$77/MWh for fixed bottom).The success in reducing the overall cost has come from a number of factors.Strong,stable political drivers and support mechani

32、sms Larger turbines Industry collaboration Innovation Standardization Industrialization Market competition Better management of risk Cheaper finance 1.1 Introduction1.0 Offshore Wind OverviewBlock Island Offshore Wind Farm-Courtesy of Deepwater WindU.S.OFFSHORE WIND HANDBOOK 20229U.S.OFFSHORE WIND H

33、ANDBOOK 20228to low carbon forms of energy.This has been particularly amplified in recent years with the COVID-19 pandemic and an unprecedented global shift in the energy mix with growing commitments by governments to achieve Net Zero.In 2020,we saw approximately two thirds of the global economy com

34、mit to Net Zero including the U.S.Net Zero,commitment by 2050 under the Biden Administration.The significant cost reductions experienced in recent years are now driving offshore wind development globally with international governments and customers placing more pressure on nations for greener,more s

35、ecure and cheaper forms of energy.The World Bank has published analysis of the offshore wind potential for 40 more emerging markets around the world,following its report in October 2019,when the potential of eight countries was estimated to be at 3.1TW.We are also witnessing a fundamental shift in g

36、lobal finance markets with the worlds largest financial institutions and investment houses driving calls to phase out financing of new fossil fuel projects.Offshore wind has now become a strong contender in the overall energy mix and recognized as a key enabler for the global challenge to achieve Ne

37、t Zero,not only in the electricity market but by helping to open up wider markets such as Green Hydrogen.The energy trilemma is a term that is frequently used at political levels to describe the requirement to balance energy security,affordability,and environmental sensitivity.The fundamental driver

38、s for offshore wind globally are oriented around energy security,decarbonization,and industrialization/job creation,and they are likely to grow in importance in the future.The global demand for electricity is growing and projected to continue this trajectory with the transition The offshore wind mar

39、ket continues to grow in both capacity and importance.Global installed capacity at the end of 2021 reached 48GW.Following the installation of approximately 6GW of additional capacity in each of 2019 and 2020,2021 saw over double this amount,with an additional 15.7GW of offshore capacity added1.These

40、 figures are particularly impressive given total global capacity was less than 3GW a decade ago.Notwithstanding slow downs in some jurisdictions during the COVID-19 pandemic,the outlook can only be described as very positive.Global Wind Energy Councils expectations of an additional 70GW of capacity

41、by 2025,rising to 205GW by 2030,illustrate where the sector is heading.Interestingly,capital expenditure committed to offshore wind in 2020 was greater than the investment made in oil and gas2.The market in Europe continues to mature and expand.As part of a 10-point plan for a“Green Industrial Revol

42、ution,”the UK government has targeted 50GW of offshore wind power by 2030.Not to be outdone,the European Commission has made a bold commitment to increase capacity to 60GW by 2030 and 300GW by 2050,with Germany,the Netherlands,Denmark,and Belgium likely to contribute significantly to these targets.T

43、he market in Asia is also developing at pace.Chinas current operational offshore wind capacity of 19.7GW is by far the largest market worldwide(overtaking the UKs 12.2GW of capacity).A bumper year of over 12GW of capacity installed during 20213 has made a very significant contribution to the close t

44、o 60GW targeted by 2030 across Chinas coastal provinces.Taiwan and South Korea have much smaller current capacity,each with significantly less than 1GW,but,together with Japan,are each targeting 10GW+of capacity by 2030.In the U.S.there is 42MW of capacity currently,but the first commercial scale of

45、fshore wind project reached financial close in September 20214 and 30GW of offshore capacity is targeted by 2030.1.2 Market Drivers and Cost Reduction 1.3 Global Market OverviewMany more countries are also taking positive steps to expand and/or develop their own capacity.Rates of growth are expected

46、 to vary from country to country,but,generally,policy support is increasing and regulatory constraints are relaxing.Consequently,we anticipate exciting developments in Brazil,Mexico,Australia,Vietnam,India,Ireland,and Poland,to name but a few countries.The below summarizes total offshore wind instal

47、lations by country at the end of 20215.1 Global Offshore Wind Report 2021-World Forum Offshore Wind2 https:/ Global Offshore Wind Report 2021-World Forum Offshore Wind4 Vineyard Wind 1 Becomes the First Commercial Scale Offshore Wind Farm in the US to Achieve Financial Close Vineyard Wind5 Global Of

48、fshore Wind Report 2021-World Forum Offshore Wind6 Subsidy-free in the Dutch North Sea:Siemens Gamesa and CrossWind partner up at Hollandse Kust Noord offshore project7 Zero-Subsidy Bids Rule Offshore Germany,RWE and EDF Named Winners|Offshore WindThe dramatic and continuing reduction in the costs o

49、f offshore wind has facilitated the growth of the sector.Increases in scale and technological advances have helped to bring the costs down and this trend looks set to continue wind farms over 1GW in capacity are becoming common and individual turbines of 15MW+are expected to be in the water in years

50、 to come.Other innovations in turbine design,improvements in project design life,and the optimization of operational costs will all contribute to lower costs further.While costs continue to decline and zero-subsidy tenders/bids are seen67,support for the development of commercial scale projects rema

51、ins commonplace,with Contract for Difference schemes and a variety of fixed or floating financial support for competitive bid processes in use across different jurisdictions.Such support looks likely to continue across the short/medium term,particularly where countries are striving to promote commer

52、cial scale projects and/or where development costs and supply chain issues add to the risk and difficulty associated with project development.carbon emissionsThe energy trilemmasecurity ofenergy supplyenergy costsU.S.OFFSHORE WIND HANDBOOK 202211U.S.OFFSHORE WIND HANDBOOK 202210As more governments,m

53、ajor corporates(including oil and gas companies),and other significant stakeholders commit to achieving carbon neutrality,offshore wind is anticipated to become an increasingly crucial component of the global energy transition.This includes floating offshore wind,which is now approaching commerciali

54、zation-installation of the largest floating wind farm,the Kincardine 50MW wind farm offshore Aberdeenshire in Scotland,was completed in August 2021.Floating offshore wind turbines will allow wind farms in areas where water depths and seabed conditions do not permit fixed bottom wind and provide acce

55、ss to deeper waters and the favorable wind conditions that are available further from shore.The growing importance of floating wind is illustrated by the proportion of floating projects that were successful in the ScotWind tender in January 2022,with over 14.5GW of floating projects,making up almost

56、 60%of the total of 25GW of new projects,receiving lease options8.Away from Europe,jurisdictions including South Korea and Japan look likely to play leading roles in the further development of this sector.In addition to commercial scale electricity generation,floating wind is also attracting attenti

57、on in other fields-the use of floating wind turbines to electrify oil and gas platforms is being actively pursued9 and floating wind is thought to be key to cheap Green Hydrogen production10.It is also hoped that utilizing both fixed bottom and floating wind in the production of green hydrogen as pa

58、rt of Power-to-X technology and hybrid marine parks(combining offshore wind with solar and wave energy)will form an important part of the solution to intermittency of renewable energy.1.4 U.S.Market OverviewAfter many false starts,the U.S.has firmly taken its first steps into the offshore wind secto

59、r.In 2016,the Block Island Wind Farm located off Rhode Island,now owned by rsted,marked a milestone as the first offshore wind project in the U.S.The 30MW project is sited in Rhode Island state waters off the southern coast of Block Island.It is comprised of five 6MW Haliade wind turbines manufactur

60、ed by General Electric,and can produce enough electricity to power 17,000 homes.The development also included laying a power cable to connect Block Island to the mainland grid for the first time,removing the need for diesel generators,which used to provide power to the islands inhabitants.2020 saw t

61、he first turbines installed in federal waters as part of the Coastal Virginia Offshore Wind Farm,owned by Dominion Energy.Two 6MW Siemens Gamesa turbines were installed 27 miles from the Virginia coastline as a pilot for the planned 2.6GW commercial wind farm that will be sited next door.Today,the o

62、ffshore wind pipeline in the U.S.stands in excess of 35GW of estimated generating capacity,with approximately 17GW of contracted offtake agreements.Developments on the Eastern Seaboard,particularly the Northeast,continue to lead the way where shallower waters mean tried and tested fixed bottom solut

63、ions will dominate.2021 was a hugely pivotal year for offshore wind in the U.S.,both in terms of political support and project development.The year started with the Administration committing to double offshore wind lease capacity and setting its sights on 30GW of offshore wind,both by the end of the

64、 decade.The introduction of a new investment tax credit and the Bipartisan Infrastructure Bill further supported realization of these targets.In projects,Vineyard Wind 1 secured its final federal permits and achieved financial close for what will be the U.S.first commercial scale offshore wind farm.

65、This was quickly followed by the approval of the South Fork wind farm.The Administrations commitment was further strengthened with an announcement to expand offshore wind capacity by holding seven new offshore lease auctions by 2025 in target areas such as the Gulf of Mexico,California,and Oregon,in

66、 addition to further leases on the East Coast.The first,in the New York Bight region,was held at the end of February 2022 and saw six new lease areas(up to 7GW)going to competitive auction.The auction spanned three days and saw fierce competition from a range of renewables developers,culminating in

67、a record-breaking total sale price of US$4.4billion.The auction saw several new developers entering the U.S.market,highlighting the growing confidence in the future of offshore wind in the U.S.These new auctions will help continue investment in the supply chain for fixed bottom technology,as well as

68、 kick starting the floating wind market in the U.S.which will be required for the deeper waters seen on the West Coast.1.5 Offshore Wind Farm Components There is no single way to build and operate an offshore wind farm,and indeed,the challenges of scale,water depth,and distance from shore are such t

69、hat the optimal solutions are invariably site specific.The pace of innovation in the offshore wind industry has been unprecedented by any standards over the past decade,where we have seen the size of the turbines alone increase from 2MW to 14MW,with further growth to 16MW and beyond expected in the

70、very near future.With increased scale comes the opportunity for cost reduction and optimization,however,it does not come without its challenges.For example,installation;as the turbines grow,so do the blades and so does the total height of the whole structure.These turbines will be pushing and,in som

71、e cases,exceeding the limits of many of the installation vessels around the world.We are also seeing the evolution of floating wind technology in the market with numerous floating wind farms under development,which will help unlock further opportunities for innovation,standardization,and local suppl

72、y chain,and will increase employment opportunities.8 The Hywind Tampen 88MW floating power project is to provide electricity for the Snorre and Gullfaks platforms in the Norwegian North Sea-https:/ https:/renews.biz/70627/floating-wind-key-to-cheap-green-hydrogen-production/Locations of U.S.offshore

73、 wind pipeline activity and Call Areas as of May 31,2021Map created by John Frenzl,National Rebewable Energy LaboratoryU.S.OFFSHORE WIND HANDBOOK 202213U.S.OFFSHORE WIND HANDBOOK 202212Below is a high-level overview of the key components of an offshore wind farm.These are discussed in more detail in

74、 the Offshore Wind Infrastructure chapter.Wind Turbine Generator(“WTG”):The WTG sits at the top of the structure and converts the wind energy to electrical energy via the mechanical movement of the blades,on the turbine.It consists of a drive drain,hub,blades and nacelle.For offshore wind,the size o

75、f the turbines are considerably larger than their onshore relation.WTG Foundations:These are the structures that support the offshore WTG.These support structures can be either fixed into the seabed,or floating.Many of the foundation structures used for offshore wind are an evolution of the offshore

76、 structures that have been used for decades in the oil and gas industry.Fixed Bottom Foundations,such as monopiles(“MPs”)and jackets have been the leading choice for developers to date.The early wind farms were relatively near to shore in shallow water and therefore best suited fixed bottom solution

77、s such as MPs.As the projects became bigger,further offshore and developments moved into more transitional waters(typically 30m to 60m water depths)the industry has seen the introduction of three or four-legged jacket foundations.There are some alternative concepts,such as gravity based structures(“

78、GBS”),tripods,suction buckets,and hybrid solutions,which have seen limited entry into the market but can be favorable over traditional foundations for certain sites.Floating Foundations,such as barges,semi-submersibles,spars,and tension-leg platforms,are structures tethered to the seabed that allow

79、turbines to generate electricity in much deeper waters where fixed bottom foundations are not feasible.Concepts which utilize multi-turbine,hybrid wind-wave or wind-to-hydrogen technology are also making an entry into the market.Inter Array Cables:These are the subsea electrical cables that connect

80、all the turbines together.The majority of sites to date have used 33kV cables,however,the benefits of transmitting at higher voltages are being recognized and 66kV inter array cables are now being used across projects in Europe.Offshore Substation Platform(“OSP”)/Offshore Substation Structure(“OSS”)

81、:The OSP,or OSS as it is known in some regions,collects the power from the wind farm,steps up the voltage and transmits it back to the onshore substation for connection to the grid.Depending on the proximity of the offshore wind farm these may be High Voltage Alternating Current(“HVAC”)or High Volta

82、ge Direct Current(“HVDC”)substations.Export Cable:Power from the wind farm is exported from the OSP via one or more high voltage subsea cables.On making landfall,they continue to the onshore substation for distribution to the grid.Onshore Substation:This is the land connection point from the OSP whe

83、re the power is received and then transferred to the grid.Other technologies are also being explored and introduced in an effort to better integrate offshore wind farms into local grids and support decarbonization efforts.Flexible storage technologies,like batteries,are now being explored as part of

84、 offshore wind developments to support better grid integration and increase stability.In recent years we have also seen the introduction of technologies to couple offshore wind with green fuel projects(particularly Green Hydrogen and ammonia),which is referred to as Power-to-X technology.This is see

85、n as particularly important where there are constrained electrical connections,and there is the potential to significantly contribute towards Net Zero targets by decarbonizing sectors such as heavy industry,heat,and transport.Through the hard-earned progress of industry and political leaders in the

86、U.S.and abroad,we now have a project development landscape with favorable policy and regulatory programs,aggressive state and federal targets,advantageous pricing for proven reliable technology and construction services,and a pool of specialized expertise necessary for successful project development

87、.All of these factors lead to the highly competitive pricing we are now seeing in the power markets,with a likelihood of further cost compression to come.The time is now,and the opportunity is before us.100m+60m30m25mOFFSHOREWIND POWER ASSETSSEMI-SUBMERSIBLETENSION-LEGPLATFORMSPAROFFSHORE FLOATINGSU

88、BSTATIONJACKETOFFSHORESUBSTATIONMONOPILEGRAVITY-BASEDONSHOREWIND POWER ASSETSONSHORESUBSTATIONTRANSMISSIONCourtesy of KentU.S.OFFSHORE WIND HANDBOOK 202215U.S.OFFSHORE WIND HANDBOOK 202214Federal Offshore PolicyFor decades,the U.S.offshore has been the domain of oil and gas exploration and productio

89、n.In 2005,recognizing the significant opportunity to take advantage of other resources on the federal offshore,Congress passed the Energy Policy Act of 2005(“EPAct 2005”)and included in the act an amendment to the existing Outer Continental Shelf Lands Act(“OCSLA”)(43 U.S.C.1331 et seq.)providing so

90、me clarity regarding the role of the federal government in the siting of offshore renewable energy facilities,including offshore wind power.Specifically,Section 388 of EPAct 2005 gave the U.S.Secretary of the Interior,in coordination with other agencies,authority over offshore renewable energy facil

91、ities on the outer continental shelf(“OCS”).Offshore Wind Leasing Path Forward 20212025OregonNorthern&Central CaliforniaGulf of MaineNY BightCentral AtlanticCarolina Long BayGulf of MexicoLease SaleWind Energy Area DesignationEstimated Time RangeKEYExisting Lease AreasPlanning and AnalysisLATE 2021L

92、ATE 2022MAY 2022Q1 2022Present202220232024SEPT 2022NOV 2021MID 2022Q2 2023202320242025Q3 2022Q3 2023Bureau of Ocean Energy ManagementAs of October 2021COMPLETECarolina Long BayNorthern&Central CaliforniaGulf of MexicoCOMPLETENY BightCentral Atlantic Gulf of MaineOregonOur path forward will help achi

93、eve the first ever national offshore wind goal to deploy 30 gigawatts of offshore wind by 2030,which would create nearly 80,000 jobs.Leasing ProcessBy:David Wochner,Ankur Tohan,Kimberly Frank,Jennifer Mersing,Derek Kelley,Allen Bachman,Bill Myhre,and Jorge Romero,K&L Gates2.0 U.S.Laws and Regulation

94、s Shaping Offshore Wind Development 2.1 Federal Offshore Policy and Regulatory Issues Block Island Offshore Wind Farm-Courtesy of Deepwater WindSource:https:/www.boem.gov/sites/default/files/documents/renewable-energy/state-activities/OSW-Proposed-Leasing-Schedule.pdfU.S.OFFSHORE WIND HANDBOOK 20221

95、7U.S.OFFSHORE WIND HANDBOOK 202216That authority is implemented by the Bureau of Ocean Energy Management(“BOEM”),a division within the U.S.Department Interior(“DOI”),and through the promulgation of a robust set of regulations and siting provisions,they oversee the federal offshore renewable energy s

96、iting regime.Since BOEMs issuance of the final regulations establishing the offshore renewable energy program in 2009(30 CFR 585),BOEM has made millions of acres of submerged federal land on the OCS available for potential wind power development.As of early 2020,BOEM had issued 15 active commercial

97、offshore wind energy leases covering 1.7 million acres of the OCS and generating nearly US$500 million in bonus bids.BOEMs Offshore Renewable Energy Program has at least one wind energy lease off every state on the Atlantic Coast from Massachusetts to North Carolina,forming the foundation for an eme

98、rging offshore wind industry in the U.S.BOEM is in the planning stages for identifying areas for potential wind leasing offshore the New York Bight,the Carolinas,California,and Hawaii,and it has recently initiated dialogue with federal,state,local,and tribal governments to explore wind energy potent

99、ial offshore Oregon and in the Gulf of Maine.As directed by President Bidens January 27,2021,Executive Order 14008,Tackling the Climate Crisis at Home and Abroad,the DOI has partnered with other federal agencies to increase renewable energy production on public lands and waters including a commitmen

100、t to deploy 30GW of offshore wind by 2030 and a target goal of permitting at least 25GW of onshore renewable energy by 2025.During a speech on October 13,2021,the DOI Secretary,announced plans BOEM to potentially hold up to seven new offshore lease sales by 2025 in the Gulf of Maine,New York Bight,C

101、entral Atlantic,and Gulf of Mexico,as well as offshore the Carolinas,California,and Oregon.The significant investment and infrastructure required to develop offshore wind projects appears to be increasingly focused in the capital markets on opportunities to move projects forward.But concerns remain

102、regarding potential obstacles to the fulsome development of an offshore wind industry in the United States,including the stability of federal tax credits,the complexity and length of the regulatory review process,and untested legal issues related to the intersection of federal-state jurisdiction.Env

103、ironmental opposition also will be an issue for offshore wind projects,despite the“clean energy”moniker.As the industry moves forward,resolution of these issues will be criticalfailure to resolve these issues could hinder the industrys advancement.Bureau of Ocean Energy ManagementThe EPAct 2005 auth

104、orized the Secretary of the Interior,in consultation with other federal agencies,to grant leases,easements,or rights-of-way on the OCS and a subsequent memorandum of understanding with the U.S.Federal Energy Regulatory Commission(“FERC”)confirmed the exclusive jurisdiction of the DOI over“the produc

105、tion,transportation,or transmission of energy from non-tidal renewable energy projects on the OCS,”including offshore wind power.Through delegation from the Secretary of the Interior,BOEM is the federal agency responsible for the siting and operation of offshore wind facilities sited on the federal

106、OCS.Importantly,the EPAct 2005 made clear that the authority granted to the Secretary of the Interior has no effect on existing authority or responsibility of other federal or state agencies acting pursuant to another federal law.Thus,as explained further below,a wide range of federal and state agen

107、cies are key contributors to the Interior process for the siting and operation of offshore wind power facilities,in particular those agencies acting pursuant to the National Environmental Policy Act(“NEPA”).BOEM has experienced strong interest in offshore renewable energy projects on the OCS.In resp

108、onse,and to help inform BOEMs planning and leasing process,the agency has established Intergovernmental Renewable Energy Task Forces in states that have expressed interest in development of offshore renewable energy.The role of each Task Force is to facilitate coordination and consultation related t

109、o renewable energy planning,collect and share relevant information that would be useful to BOEM during its decision-making process and provide updates on regional offshore wind goals and developers activities.To date,fourteen BOEM Intergovernmental Task Forces have been established in California,Del

110、aware,Florida,Hawaii Maine,Maryland,Massachusetts,New Jersey,New York,North Carolina,Oregon,Rhode Island,South Carolina,and Virginia.Task Force meetings have helped identify areas of significant promise for offshore development and provided early identification of,and steps toward resolving,potentia

111、l conflicts.A summary of the status of activity in the different states can be found at https:/www.boem.gov/Renewable-Energy-State-Activities/.BOEMs OCS work and interaction with other federal statutes is outlined in more detail below.The regulatory regime established by BOEM is robust and has sever

112、al distinct phases,including Planning and Analysis,Leasing,Site Assessment,and Construction and Operations.Key Components of BOEM Regulatory ProcessPlanning and LeasingThe Planning and Leasing phases are the foundation of the regulatory program for offshore wind development.BOEM undertakes a number

113、of initiatives to determine whether there is interest in particular OCS areas for offshore wind development,and in the event that there is interest,to begin moving toward a lease process for such areas.BOEM can undertake activities of its own initiative or BOEM also can move forward with offshore wi

114、nd power projects through an unsolicited application submitted by a potential offshore wind power project developer.Either way(i.e.,developer proposed or BOEM proposed),BOEM must establish an Intergovernmental Renewable Energy Task Force for any identified WEAs to consult with state task forces,othe

115、r state and local representatives,and with representatives of Indian Tribes whose interests may be affected early in the process.Before issuing a lease,BOEM follows a four-step process,issuing a Call for Information and Nominations,completing the Area Identification process,publishing a Proposed Sal

116、e Notice(“PSN”),and publishing a Final Sale Notice(“FSN”).The leasing of offshore federal lands under the EPAct 2005 is the heart of BOEMs jurisdiction,which results in BOEM issuing a commercial wind energy lease to a developer.Leases may be issued either through a competitive or noncompetitive proc

117、ess.The EPAct requires that BOEM issue leases on a competitive basis,unless it determines that there is no competitive interest in the proposed lease area.When only one developer has indicated interest following a Request for Information(“RFI”),BOEM may issue a lease non-competitively.The competitiv

118、e lease process begins with BOEM publishing a PSN for a lease area including the terms and conditions developed through the EA and stakeholder consultation process.BOEM has detailed regulations addressing the possible formats that BOEM can use(e.g.,sealed bidding or multi-factor bidding)for an aucti

119、on as well as the bidding systems that the agency will employ in evaluating bids(e.g.,cash bonus with a constant fee rate or sliding operating fee rate with a fixed cash bonus)(30 CFR 585.220-225).The PSN has a 60-day comment period during which the interested applicants submit their qualifications

120、to BOEM including evidence that they are eligible to hold a lease and demonstrating their technical and financial capability to conduct the authorized lease area Source:https:/www.boem.gov/sites/default/files/documents/about-boem/Wind-Energy-Comm-Leasing-Process-FS-01242017Text-052121Branding.pdfU.S

121、.OFFSHORE WIND HANDBOOK 202219U.S.OFFSHORE WIND HANDBOOK 202218activities.BOEM,then publishes a FSN and identifies qualified bidders who must then submit the bid deposit as specified in the FSN.An auction is held to identify the winning bidder who is then eligible to pay the balance of their bid and

122、 execute the lease with BOEM.As part of the identification of any lease areas or WEAs,and prior to holding any auction,BOEM typically conducts an environmental review and assessment to support its proposed leasing pursuant to NEPA(outlined further below).However,in May 2021,the D.C.Circuit Court of

123、Appeals concluded that NEPA is not triggered at the leasing stage because the BOEMs action had not yet reached“a critical stage of a decision which will result in irreversible and irretrievable commitments of resources to an action that will affect the environment.”1 The lease does not grant the les

124、see the right to construct any facilities,but instead grants the right to prepare plans for lease development which must be approved by BOEM in subsequent phases.The Leasing Phase may take between one and two years for completion.Site Assessment Plan(“SAP”)andConstruction and Operation Plan(“COP”)On

125、ce a project developer has secured a lease,it moves into the third phase,the Site Assessment phase.The purpose of this phase is to allow the lessee to engage in activities on the leased land to assess the actual wind resources and better understand the conditions of the lease area.Specifically,under

126、 the terms of the lease,the lessee is required to submit within 12 months an SAP(or a combined SAP and COP)to the agency describing how the lessee will conduct its assessment activities and technology testing on the OCS.BOEM will review and evaluate the SAP,including conducting its own environmental

127、 and technical review of the proposed site assessment activities,and ultimately will decide whether to approve,disapprove,or approve with conditions(most common)the SAP.The process to complete a SAP can take up to five years depending on the complexity of the site.Once the SAP is approved,the lessee

128、 will have a five-year lease term to engage in the site assessment activities and during that five-year period also must submit its COP(in the event it was not submitted jointly with its SAP).The COP is the key document in which the lessee outlines how it will construct and operate a wind power proj

129、ect on the OCS pursuant to the federal lease.This document details all activities associated with the construction and operation of the facility,as well as general decommissioning plans at the end of the lease term.Similar to the SAP,BOEM will conduct its own environmental and technical reviews of t

130、he COP and will decide to approve,approve with conditions,or disapprove the COP.The process to complete a COP can take up to two years.The figure below identifies(at a cursory level)the potential direct and indirect impacts associated with an offshore wind farm which may require analysis in the COP.

131、Specific COP requirements are outlined in BOEMs Guidelines for Information Requirements for a Renewable Energy Construction and Operations Plan(May 2020).1Fisheries Survival Fund,et.al v.Haaland,No.1:16-cv-02409(May 20,2021).IMPACTS MATRIX FOR CONSTRUCTION AND OPERATION PHASE OF OSW FARMDirect Impac

132、tsIndirect ImpactsGeology and Hazards Disturbance to sea floor;Scour Instability of turbine structure Reduced Water QualityWater Quality Turbidity;Accidental releases Reduced Water QualityThreatened and Endangered Species Displacement;Disruption to breeding,feeding Injury Permanent displacement Mort

133、alitySensitive Bio Resources/Habitats Habitat Disturbance/lossAvian Resources Bird strikes;Habitat lossCoastal and Marine uses Spatial/temporal conflicts with other authorized users Interference with shipping,military,aircraftSocioeconomics Reduced fishing,recreation and tourism activities;Increase

134、in non-local employees Decreased jobs/revenue Increased jobs/revenue(construction)Reduced housing/services availableArchaeological Resources Effects on historic resources:Visual impacts Destruction/damage to historic resources or viewshedsAir Quality/Climate Change Climate change/Carbon emissions Co

135、nstruction emissions Zero carbon emissions(operation)Once BOEM approves the COP,generally a commercial lease will have a 25-year term that becomes effective as of that approval,though the parties can negotiate a longer term,and lessees can request renewals of leases in order to extend the term past

136、the original termination date.With regard to any infrastructure required for the transmission of the energy generated from the offshore wind facilities located on the leased land,the terms of the lease usually will include the grant of one or more easements for the purpose of installing gathering,tr

137、ansmission,and distribution cables,pipelines,and appurtenances on the OCS,as necessary for the full enjoyment of the lease.As part of submitting a COP for approval,lessees should request one or more easement(s),as necessary.BOEMs approval of the COP will include the grant of the associated,requested

138、 right-of-way(“ROW”).BOEMs process is robust and lengthy and requires substantial,continuous and effective engagement by the project developer(s).While familiarity with the process as written in the regulations is important,but the agency does have some degree of discretion so flexibility and adapta

139、bility also is required.In the end,offshore wind power project developers should expect to spend 7-10 years in the planning and construction process before commercial operations of the installed offshore wind facilities actually commence.U.S.OFFSHORE WIND HANDBOOK 202221U.S.OFFSHORE WIND HANDBOOK 20

140、2220Other Pre-Construction Permits and CoordinationIn addition to the BOEM SAP and COP,there is a complex permitting process that will run concurrently with the BOEM process.These federal activities include:U.S.Army Corps of Engineers(“USACE”)permits for impacts to waters of the U.S.(Nationwide Perm

141、it NWP for SAP and Individual Permit IP for COP)pursuant to the Clean Water Act;consultation with the United States Fish and Wildlife Service(“USFWS”)for the preparation of Biological Assessment for impacts to federally protected species;consultation with the USFWS pursuant to the Migratory Bird Tre

142、aty Act;consultation with the National Marine Fisheries Service(“NMFS”)for Incidental Take Authorization pursuant to the Marine Mammal Protection Act;consultation with NMFS for Essential Fish Habitat pursuant to the Magnuson-Stevens Act;coordination with U.S.Coast Guard(“USCG”)for Approval for Priva

143、te Aids to Navigation;Section 106 Concurrence with State Historic Preservation Office(“SHPO”)for cultural resources;and Environmental Protection Agency(“EPA”)permit for the Outer Continental Shelf Air Regulations.In addition to permits,there is also coordination with other relevant stakeholders,incl

144、uding Department of Defense(“DoD”).At the state level,approvals/permits include a Section 401 Water Quality Certificate,Coastal Zone Management Act consistency determination,and other construction-related permits.Approvals for impacts to state protected species and forest/trees may also be required.

145、BOEMUSACENMFS/USFWSSHPOEPAU.S.Coast GuardSAP Review/ApprovalNWP(SAP)Pre-ConsulationPre-ConsulationConsult for AQ/EJApproval for private ATONCOP Review/ApprovalConsulationConsulationReview EIS(Section 309 CAA)IP(state waters/onshore waters of the U.S.)EIS/RODReview BA/Issue BO106 ConcurrenceEIS(Coop.

146、Agency)/RODPost-Construction Mitigationand MonitoringPost-construction monitoring and agency coordination would be required to fulfill mitigation commitments outlined in the COP,BOEM environmental impact statement(“EIS”),and agency permits/approvals that aim to avoid and minimize impacts to natural

147、and socioeconomic resources.The following table provides a summary of the potential mitigation that may be implemented to address potential impacts during operation.It should be noted that monitoring is developed for project and site-specific considerations and the items in the table are not inclusi

148、ve of all possible mitigation scenarios.ResourceMitigation/MonitoringWater QualityImplementation of a Spill Prevention,Control,and Countermeasure PlanPhysical oceanography,geology,and sedimentsPeriodic underwater inspection of turbine foundations,inter-array cables,and export cable to assess aggrada

149、tion,scour and/or sub-seafloor exposureBenthic macroinvertebratesPost-construction surveys for comparison of seasonal and spatial patterns of species abundance compared to pre-construction conditionsFishPost-construction surveys to assess local fish community populations compared to pre-construction

150、 conditionsMarine mammals and sea turtles Protected species observers on vessels utilized during construction and operation to provide visual species monitoring Post-construction underwater monitoring and analysis of operational noise Adherence to vessel speed restrictions to prevent vessel strikes

151、of marine mammalsAvian speciesPost-construction monitoring(vessel-based,nocturnal,and/or radar-based)during operation to determine bird and avian collision mortalityThreatened and Endangered Species,Essential Fish Habitat,Post-construction species-specific monitoring if required during by USFWS and

152、NFMS during consultationCultural ResourcesImplementation of an Unanticipated Discovery Plan during construction and operation to outline procedures to follow in the event that submerged cultural resources are encounteredWetlands and other waters of the U.S.Implement USACE permit conditions Purchase

153、wetland mitigation credits or implement on-site wetland mitigation as required by the USACECommercial and recreational fishing,boating,and divingPost-construction coordination with stakeholders as needed.U.S.OFFSHORE WIND HANDBOOK 202223U.S.OFFSHORE WIND HANDBOOK 202222Major Components of Federal En

154、vironmental Review ProcessNational Environmental Policy Act(“NEPA”)Passed in 1969,NEPA(42 U.S.C.4321-4347)is the foundation of environmental policymaking in the United States.The NEPA process is designed to help public officials make decisions based on complete understanding of environmental consequ

155、ences and take actions that protect,restore,and enhance the environment.To help further its goals,NEPA established the Council on Environmental Quality(“CEQ”)to advise agencies on the environmental decision making process and to oversee and coordinate the development of federal environmental policy.

156、In 1978,the CEQ issued regulations(40 C.F.R.1500-1508)implementing NEPA.These regulations include procedures for federal agencies to follow during the environmental review process.In April 2021,the DOI(under which BOEM sits)issued Orders No.3389 and 3399(collectively,the“2021 Orders”)to implement th

157、e review of the DOI actions directed by Executive Order(“EO”)13990(“Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis”)issued by President Biden on January 20,2021,and to address climate and environmental justice concerns.The 2021 Order revoked prior ord

158、ers,including Order 3355 to implement Executive Order 13807 and other NEPA improvements,which limited a NEPA EIS to 150 pages,or 300 pages for unusually complex projects,excluding appendices.In July 2020,CEQ made significant revisions to the NEPA regulations for the first time in more than 40 years.

159、CEQ is now reviewing the 2020 rule pursuant to E.O.13990(January 20,2021).CEQ issued an Interim Final Rule on June 29,2021,which extended the deadline by two years(to September 14,2023)for federal agencies to develop or update their NEPA implementing procedures to conform to the CEQ regulations.In a

160、ddition,on October 7,2021,CEQ published Phase 1 Notice of Proposed Rulemaking,initiating a 45-day comment period.The proposed rule announced a narrow set of proposed changes to generally restore regulatory provisions that were in effect for decades before the 2020 rule modified them for the first ti

161、me.CEQ states that it is seeking to better align the NEPA regulations with CEQ and agency expertise,as well as NEPAs statutory goals and purpose.The environmental review process is complex.As noted above,the decision out of the D.C.Circuit Court of Appeals,concluding that BOEM is not obligated to co

162、nduct a NEPA review at the leasing stage,means that public involvement in the NEPA process is delayed.As such,developers in particular should seek to maximize stakeholder engagement(e.g.,through engagement with the Intergovernmental Renewable Energy Task Force)to identify potential impacts and conce

163、rns before they arise in the formal NEPA process.Endangered Species Act(“ESA”)Passed in 1973,the ESA(16 U.S.C.1531 et seq.)is intended to conserve endangered and threatened species and their habitats.There are approximately 1,930 species listed under the ESA that are found in part or entirely within

164、 the United States and its waters.The National Oceanic and Atmospheric Administrations National Marine Fisheries Service(“NMFS”)and the Department of the Interiors U.S.Fish and Wildlife Service(“USFWS”)share responsibility for implementing the ESA,with NMFS generally managing marine and anadromous s

165、pecies and USFWS managing land and freshwater species.While the USFWS has guidance in place for land-based wind development(available at https:/www.fws.gov/ecological-services/es-library/pdfs/WEG_final.pdf),it does not have policies in place for offshore wind development.Section 7 of the ESA mandate

166、s that BOEM and all other Federal Agencies consult with the Secretary of Commerce(via NMFS)and/or Interior(via USFWS)to insure that any“agency action”is not likely to jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of an

167、 endangered or threatened species critical habitat.The consultation process begins when BOEM provides NMFS and/or USFWS with details on the proposed activity,the ESA-listed species and designated critical habitat in the area,the best available information on effects to species and habitats from the

168、proposed action,and measures which will be required by BOEM to reduce or eliminate the potential for effects to occur(e.g.,mitigation and monitoring measures).Formal consultation must occur for any activity which BOEM,NMFS,or USFWS determines may adversely affect listed species or designated critica

169、l habitat.The consultation process ends with the issuance of a biological opinion by NMFS and/or USFWS.This opinion documents whether the action BOEM proposes to authorize is likely to jeopardize listed species or adversely modify critical habitat.It may also provide an exemption for the taking of l

170、isted species and may outline measures deemed necessary to minimize impacts.After completion of the consultation process,BOEM will determine whether to issue an authorization for the proposed activity.If issued,BOEM will require the implementation of needed mitigation measures identified during the

171、consultation 2 Take is defined in regulations as:“pursue,hunt,shoot,wound,kill,trap,capture,or collect,or attempt to pursue,hunt,shoot,wound,kill,trap,capture,or collect.”50 C.F.R 10.12.process in addition to monitoring measures meant to detect taking or adverse effects.BOEM will also evaluate the e

172、ffectiveness of these mitigation and monitoring measures to reduce effects.Migratory Bird Treaty Act(“MBTA”)Passed in 1918,the MBTA implements the United States commitment to four bilateral treaties,or conventions,for the protection of a shared migratory bird resource.The original treaty upon which

173、the MBTA was passed was the Convention for the Protection of Migratory Birds signed with Great Britain in 1916 on behalf of Canada for the protection“of the many species of birds that traverse certain parts of the United States and Canada in their annual migration.”The primary motivation for negotia

174、tion of the 1916 treaty and the passage of the MBTA was to stop the“indiscriminate slaughter”of migratory birds by market hunters and others.The MBTA was subsequently amended as additional treaties were signed with Mexico(1936,amended 1972 and 1999),Japan(1972),and Russia(1976).The Canadian treaty w

175、as amended in December 1995 to allow traditional subsistence hunting of migratory birds.Each of the treaties protects selected species of birds and provides for closed and open seasons for hunting game birds.By implementing the four treaties within the United States,the MBTA protects over 800 specie

176、s of birds.The list of migratory bird species protected by the MBTA appears in Title 50,section 10.13,of the Code of Federal Regulations(50 C.F.R 10.13).Under the MBTA,it is unlawful to pursue,hunt,take,capture,kill,possess,sell,purchase,barter,import,export,or transport any migratory bird,or any pa

177、rt,nest,or egg of any such bird,unless authorized under a permit issued by the Secretary of the Interior.Some regulatory exceptions apply.There are no incidental take permits available for offshore wind projects under the MBTA2.In 2009,BOEM entered into a Memorandum of Understanding(“MOU”)with USFWS

178、 to“strengthen migratory bird conservation through enhanced collaboration between the MMS and the FWS.”In assessing impacts to and protecting biological resources,BOEM consults with the USFWS on activities that may affect threatened and endangered species.BOEM also evaluates the effects on migratory

179、 birds and important habitats such as offshore and nearshore foraging,staging,molting,and roosting habitats.BOEM regularly conducts studies that provide information for protection and conservation of migratory birds,including protected species.BOEM uses the NEPA process to evaluate potential impacts

180、 of proposed actions and alternatives,including impacts to migratory birds and their habitats.The potential impacts on migratory birds associated with offshore development may include direct effects such as the possibility of attraction to and collision with structures.For example,large numbers of m

181、igratory birds have been observed to be attracted to offshore structures and should be evaluated due to potential for collision.Indirect effects may include potential habitat loss through displacement or disturbance.In addition,accidents,such as oil spills,can have short-term,acute,and long-term,chr

182、onic effects on migratory birds and their habitats.Coastal Zone Management Act(“CZMA”)In 1972,Congress enacted the CZMA(16 U.S.C.1451 et seq.)to protect the coastal environment from impacts of residential,recreational,commercial,and industrial uses.The CZMA helps states develop coastal management pr

183、ograms that manage and balance competing uses of the coastal zone.Thirty-five state and territories participate in the CZMA.A full list with description of each states program is available here:https:/coast.noaa.gov/czm/mystate/.Alaska withdrew from the CZMA on July 1,2011,making it the only coastal

184、 or Great Lakes state to not participate.In each state,the program is implemented by one or more state agencies,usually the Department of Natural Resources,primary environmental agency,or primary coastal management agency.Federal agencies,including BOEM,must follow the federal consistency provisions

185、 of the CZMA,set forth in 15 C.F.R.part 930.The federal consistency provisions require federal actions that are reasonably likely to affect land or water use of the coastal zone to be consistent with enforceable policies of a states coastal management plan.Different subparts provides guidelines for

186、different types of activities:Subpart C deals with federal agency activities,Subpart D deals with private activities requiring federal licenses or permits,Subpart E deals with OCS exploration,development,and production activities,and Subpart F deals with federal assistance to state and local governm

187、ents.States can review OCS lease sales for federal consistency.In these cases,BOEM produces a“consistency determination”that describes how the sale is consistent“to the maximum extent practicable”with the programs U.S.OFFSHORE WIND HANDBOOK 202225U.S.OFFSHORE WIND HANDBOOK 202224enforceable policies

188、.BOEM then sends a copy to each affected State for review.The State has a designated time period during which to agree or disagree with the consistency determination.If the State agrees,the lease sale can proceed.If the State disagrees,it must describe the inconsistency and any alternative measures

189、that would allow the sale to be consistent.BOEM tries to resolve any potential problems with the State,but the CZMA does allow BOEM to proceed with the lease sale regardless.BOEM can also seek NOAA mediation.States can also review OCS exploration and development and production plans.In this case,the

190、 OCS lessee prepares a“consistency certification”and“necessary data and information”along with the proposed plan.BOEM then sends a copy of the Plan and CZM information to the affected States coastal agency for federal consistency review and decision.The State must concur with or object to the lessee

191、s consistency certification within a designated time period.If the State fails to meet the deadline,the plan is conclusively presumed and thus approved.If the State concurs,BOEM approves the plan.If the State objects to an Exploration Plan,BOEM can approve the plan but cannot issue permits.If the St

192、ate objects to a development or production plan,BOEM cannot approve the plan and the lessee can either choose to appeal the States decision to the Department of Commerce or amend and resubmit it.The review process is nearly identical for OCS permits.Maritime Law(The Jones Act)What is the Jones Act?T

193、he“Jones Act”generally refers to several provisions of U.S.law known as the“coastwise laws,”which impose limitations on vessel operations in a number of ways that impact offshore wind projects.The coastwise laws apply not only to the transportation of passengers and merchandise between points in the

194、 United States and the Outer Continental Shelf(“OCS”),either directly or via a foreign port,but also impose certain limitations on towing,dredging and fishing activities in U.S.waters.In order to qualify to engage in coastwise trade,the vessel must:(1)be built in the United States(and have never bee

195、n rebuilt abroad);(2)be owned and controlled by citizens of the United States;(3)have primarily a U.S.citizen crew and(4)have a Certificate of Documentation with a coastwise endorsement issued by the U.S.Coast Guard.Under the Jones Act,merchandise is broadly defined to include almost any type of car

196、go including“goods,wares,and chattels of every description”as well as“valueless material.”A passenger is any person carried on a vessel who is not connected with the operation and navigation of the vessel or the ownership or business of the vessel.In order to qualify as a U.S.owner,the corporation o

197、r owning entity must be organized under the laws of the U.S.,and the chief executive officer,by whatever title,and the chairman of the board,as well as a majority of the board of directors,must be U.S.citizens,and at least 75%of the equity in the entity must be owned and controlled by U.S.citizens.A

198、pplication of the Jones Act toOffshore Wind ProjectsThe coastwise laws generally apply to points in the territorial sea,which is defined as the belt,three nautical miles wide,seaward of the territorial sea baseline,and to points located in internal waters,landward of the territorial sea baseline.The

199、 Outer Continental Shelf Lands Act(“OCSLA”)established the legal regime for the exploration,development,and production of energy resources on the OCS.OCSLA expressly extended the laws and civil and political jurisdiction of the United States,including the coastwise laws,to the subsoil and seabed of

200、the OCS and to“all artificial islands,and all installations and other devices permanently or temporarily attached to the seabed which may be erected thereon for the purpose of exploring for,developing,or producing resources therefrom.”Congress amended OCSLA in January of 2021 affirming the applicati

201、on of all U.S.laws and jurisdiction on the OCS not only to oil and gas projects but also to non-mineral energy projects,such as offshore wind energy.Customs and Border Protection(“CBP”)is the agency responsible for interpreting the coastwise laws and issues rulings on a variety of operating scenario

202、s.These rulings are limited to the particular facts of the specific case but provide helpful guidance in navigating the applicable requirements for the construction and maintenance of offshore wind projects.For example,in connection with the construction of meteorological data towers outside the ter

203、ritorial sea and on the OCS to be used in collecting wind speed data useful in determining the site for future wind farm development,CBP ruled that the transportation of construction materials or passengers from a point in the United States to the construction vessel installing the wind tower requir

204、es a coastwise-qualified vessel.The construction vessel,however,can be of a foreign flag as long as it remains stationary and does not transport anything between points on the OCS or points in the U.S.and the territorial sea.Neither the drilling nor the pile driving by the stationary construction ve

205、ssel constitutes coastwise trade.In a subsequent ruling,CBP addressed the transportation and installation of two wind farms,one three miles and the second some 20 miles off of the coast of Rhode Island.Some turbines were transported to their respective construction sites from Rhode Island on coastwi

206、se-qualified vessels whereas others were transported from Germany on non-coastwise-qualified vessels.The turbines were installed by a stationary,foreign-flagged jack-up vessel,which had its legs securing it to the seabed and used its cranes to lift the turbines from the transport vessel and place th

207、em directly on to the steel jacket foundation at the project site.Although the crane on the jack-up vessel moved the turbines,the jack-up vessel itself remained stationary,and thus,there was no violation of the coastwise laws.At no time did the jack-up vessel transport merchandise or passengers betw

208、een any of the installation sites.Vessels used to conduct maintenance on completed wind turbines will need to be coastwise qualified,as will vessels that may be engaged in related dredging activities or the towing of other vessels.There are certain related activities that can be conducted on foreign

209、-flag vessels,such as cable laying and pipe laying on the OCS or within territorial waters,as well as research activities.Shortly after enactment of the OCSLA amendment in 2021,CBP published a ruling confirming that the Jones Act applied to renewable energy projects on the OCS,saying that“the plain

210、language of OCSLA Section 4,as amended,extends U.S.law to the physical subsoil and seabed of the OCS,as well as installations and other devices permanently or temporarily attached to the seabed,which may be erected thereon for the purpose of exploring for,developing,or producing resources,including

211、non-mineral energy resources.”(HQ H309168)The ruling also affirmed that the pristine seabed was a“coastwise point”for purposes of the Jones Act.However,less than two months after its original letter ruling,CBP issued a rare modification of its first letter ruling(HQ H317289).In the modification,CBP

212、changed its position on the pristine seabed,now stating that the pristine seabed would not be considered a point for purposes of the Jones Act.Instead,CBP determined that at the time of first delivery of scour protection materials to the seabed,there was no coastwise point,but after the first layer

213、of scour protection material was placed on the seabed,a coastwise point was created.CBP has also recently addressed crewing and vessel equipment issues for wind installation vessels (HQ H316313).Advance CBP rulings are available should there be any question about compliance with the coastwise laws i

214、n connection with an offshore wind project.This is particularly advisable given the significant penalties for violations.The penalty for transportation of merchandise on a noncoastwise vessel is forfeiture of the merchandise so transported,or the value thereof.Transportation of passengers in violati

215、on of the coastwise laws is US$778 per passenger so transported.In addition,there are daily civil penalties for vessels operating in violation of the Coast Guard documentation regulations,as well as the potential seizure and forfeiture of the vessel and its equipment under certain circumstances.The

216、navigation laws,including the coastwise laws,can be waived by the Secretary of homeland security under very limited statutory authority when requested by the Secretary of defense and only then to the extent considered necessary in the interest of national defense.Such waivers have been granted in co

217、nnection with hurricane relief efforts,for example,and other extraordinary circumstances.Occasionally,Congress will enact special legislation authorizing issuance of a coastwise endorsement for a specific vessel that does not meet the requirements or has lost its qualification through foreign owners

218、hip or rebuilding;however,such waiver requests are often controversial and infrequently enacted.Federal Antitrust LawThe scale and capital needs of offshore wind installations in the United States necessarily require a large degree of cooperation among industry participants.However,in the United Sta

219、tes,the Sherman Act,Clayton Act,and FTC Act empower the Department of Justice(“DOJ”)and the Federal Trade Commission(“FTC”)to investigate and enforce U.S.antitrust laws across all industries,including the offshore wind industry.The DOJ and FTC can sue to block mergers,enjoin contracts with anticompe

220、titive effects,levy fines,and,in the case of the DOJ,even bring criminal charges that result in jail time.In addition,the Sherman Act and Clayton Act permit private plaintiffswhether customers,suppliers,or competitorsto file lawsuits alleging that business practices violate the antitrust laws,exposi

221、ng industry participants to often substantial,trebled damages.This section outlines the common circumstances that may incur antitrust scrutiny from the government or private plaintiffs.Contracts and Exclusive DealingBusinesses frequently employ exclusivity provisions in supply contracts in order to

222、protect against potential supply chain interruptions or to protect their investments.However,exclusive contracts can raise potential antitrust concerns depending on the number of alternative suppliers available and the parties market share.Before entering U.S.OFFSHORE WIND HANDBOOK 202227U.S.OFFSHOR

223、E WIND HANDBOOK 202226into exclusive contracts,parties should determine whether one of them has a large market share or whether the agreement could somehow prevent a rival from accessing necessary supplies.Numerous factors may cause a wind farm developer to consider exclusivity provisions in supply

224、contracts.For example,competitive bids to secure offshore rights may require wind farm developers to demonstrate their ability to secure sufficient equipment and supplies necessary to complete a project.Alternatively,wind farm developers may sponsor suppliers entry into new markets or provide funds

225、to increase a suppliers capacity and wish to obtain the full benefit of their investment.The antitrust laws prohibit agreements that“unreasonably”restrain trade.Although exclusive contracts are not illegal,they may be unreasonable if they foreclose(i.e.,limit or cutoff)competitors from accessing nec

226、essary supplies.Other factors that courts consider when evaluating an exclusive contract include the duration of the agreement;the parties mutual desire for exclusivity;the extent to which competitors also employ exclusive dealing arrangements;and the extent to which competition is actually injured.

227、Courts balance these factors with procompetitive justifications for the exclusive arrangement,such as improving the services of a supplier who can devote its efforts to one buyer;avoiding free riding;and enabling efficiency-enhancing investments and creating economies of scale.Thus far,the antitrust

228、 agencies have not publicly taken any action against exclusivity provisions in the wind farm space,and we have not seen any private claims filed.However,exclusive contracts that produce the potential anticompetitive effects outlined above could face government investigation or a private antitrust la

229、wsuit by an injured competitor.Merger ReviewLike many emerging industries,the offshore wind industry presents significant opportunities for M&A activity.Industry participants considering transactions may be required to make a Hart-Scott-Rodino(“HSR”)filing or other state law filings.Transactions tha

230、t may substantially lessen competition will often face investigation by the FTC or DOJ3,as well as potentially from state attorneys general.Parties to transactions above an inflationary adjusted,statutorily defined purchase price(2021:US$92 million)are required to submit an HSR filing.The agencies h

231、ave recently changed how they determine whether a transaction meets the filing requirement.For example,they previously did not count retired debt toward the purchase price but have since indicated that retired debt may trigger the HSR filing threshold.Parties should thus consult with HSR counsel to

232、determine whether their transaction meets the HSR filing threshold under the most current FTC and DOJ guidance.The push toward renewable energy under the Biden administration,as well as a general increase in antitrust enforcement,may result in transactions impacting offshore wind receiving particula

233、r scrutiny from the FTC or DOJ.The antitrust regulators will assess whether any merger between competitors may substantially lessen competition in the offshore wind space or produce other anticompetitive effects,such as slowing the transition to renewable energy or increasing its cost.In addition,ve

234、rtical transactions such as a developers acquisition of a key supplier could result in the antitrust regulators considering whether the developers competitors would be foreclosed from their necessary supply.Other Potential Antitrust RisksThe antitrust laws prohibit other conduct as well,which,althou

235、gh not unique to offshore wind,still apply to this industry as they would to any other:Market participants at every level of the distribution chain are prohibited from agreeing on prices or services offered.Such conduct is per se unlawful and can result in substantial civil litigation as well as cri

236、minal charges leading to fines and jail time.Industry participants considering trade association membership cannot use their membership to coordinate pricing or services.Any standard setting must comply with requirements that prevent standards from acting as a sham to stifle competition and protect

237、incumbents.3 The FTC and DOJ share jurisdiction over merger review and determine which agency will review a merger after receiving an HSR filing.One agency may review every merger involving a certain industry if it has developed particular expertise and knowledge about that industry.2.2 Federal Ener

238、gy Regulatory Commission:Regional Grids,Markets and ReliabilityBy:Kimberly Frank,Ruta Skuas,Jennifer Mersing,Nathan Howe,K&L GatesThe Federal Energy Regulatory Commission(“FERC”)is an independent agency within the U.S.Department of Energy(“DOE”)that regulates interstate transmission of natural gas,o

239、il,and electricity.Pursuant to the Federal Power Act(“FPA”),FERC regulates,among other things,the rates and services of the interstate transmission of electricity and the interstate wholesale sales of power;exercises authority and approvals over certain mergers,acquisitions,and corporate transaction

240、s;regulates books and records accounting requirements;and oversees compliance with reliability requirements.FERCs Formation of Regional Grids and Markets;Stakeholder ParticipationFERC has issued a number of rulemakings and orders establishing regionally organized markets.In 1996 FERC issued rulemaki

241、ng Order No.888 paving the way for the formation of Independent System Operators(“ISOs”)to coordinate,control,and monitor the operation of the electric power system and facilitate open-access to transmission service.Later,in Order No.2000,FERC promoted the formation of Regional Transmission Organiza

242、tions(“RTOs”)to administer the transmission grid on a regional basis throughout North America(including Canada).Today RTO/ISO regions cover a large portion of the continental U.S.,with individual utilities remaining responsible for grid administration outside of these areas.The RTOs/ISOs include PJM

243、 Interconnection(“PJM”),California Independent System Operator(“CAISO”),Southwest Power Pool,Midcontinent Independent System Operator(“MISO”),New York Independent System Operator,and ISO New England(“ISO-NE”).Most offshore wind development activity is within eastern RTOs/ISOs.RTOs/ISOs are“public ut

244、ilities”that operate(but do not own)the transmission grid.In addition to ensuring that open-access transmission services are provided on a non-discriminatory basis,RTOs/ISOs plan transmission expansion projects and manage the interconnection process for new storage,generation,and merchant transmissi

245、on projects.RTOs/ISOs also dispatch(but do not own or operate)generation and other resources to meet the round-the-clock needs of electric energy customers.They operate competitive markets for energy,ancillary services,and,in some cases,capacity.Through stakeholder processes described below,RTOs/ISO

246、s develop market rule proposals that are submitted to FERC to evaluate for compliance with the FPA.Like any other regulated public utility,RTOs/ISOs must put their tariffs(including market rules)and other agreements“on file”with FERC.To change a filed tariff or amend a filed agreement,the RTO/ISO mu

247、st make a filing under Section 205 of the FPA and explain the reasons for the change.FERC typically acts on Section 205 filings in about 60 days.RTOs/ISOs also maintain manuals and other documents that set forth detailed procedures governing participation in the markets administered by the RTO/ISO.T

248、hese materials,which implement but do not take priority over the“on file”tariff,are available on the websites of the RTOs/ISOs.RTOs/ISOs have implemented orderly rules to facilitate participation by stakeholders in RTO/ISO governance.The importance of stakeholder participation in the RTO/ISO process

249、 cannot be understated;the stakeholder process is one of the primary avenues for the development of new market rules and other tariff changes to the already“on file”tariffs.RTO/ISO stakeholders are grouped together in sectors representing major industry participant groups such as transmission owners

250、,generation owners,electric distributors,end-use customers,other suppliers,and the like.RTOs/ISOs have numerous stakeholder bodies where members can bring forth issues for discussion.If the issue or proposal receives majority support,the members can vote to move the proposal through the hierarchy of

251、 the RTO/ISO stakeholder process up through Board review.Each participant sector is allocated a share of voting interests in the stakeholder governance process.Source:https:/www.ferc.gov/electric/power-sales-and-markets/rtos-and-isos U.S.OFFSHORE WIND HANDBOOK 202229U.S.OFFSHORE WIND HANDBOOK 202228

252、In PJM,for example,votes in the two senior standing committees,the Members Committee and the Markets and Reliability Committee,are recorded and weighted by sector to ensure that all interested parties are included in the decision-making process.PJM also has three standing committees that route endor

253、sed packages to the senior committees for approval,as well as subcommittees,user groups,and task forces for preliminary issue identification and stakeholder discussion.Committed engagement in the stakeholder process,particularly at the subcommittee and standing committee levels,enables market partic

254、ipants and others to present proposals,identify issues,and shape market policies.FERC Rulemakings and Technical ConferencesFERC will issue rulemakings,such as Order No.2222,that require the FERC-jurisdictional RTOs/ISOs or other regulated public utility to make a“compliance filing”explaining how goa

255、ls of the rulemaking will be achieved.In most cases,compliance filings present proposed changes to the regulated entitys tariff that would be necessary to implement the rulemaking.FERC is then required to act on the filing.These changes are discussed in the RTO/ISO stakeholder process before the RTO

256、/ISO submits its compliance filing to FERC.FERC may also engage the RTOs/ISOs and industry stakeholders on important issues by hosting technical conferences.For example,FERC held four technical conferences and solicited post-conference comments in docket number AD21-10 to better understand industry

257、views about the need to modernize electricity market design to address the changing mix of resources.In October 2020,in docket number AD20-18-000,FERC held a commissioner-led technical conference regarding the integration of offshore wind in RTOs/ISOs.Specifically,the conference discussed how the RT

258、Os/ISOs can accommodate anticipated growth in offshore wind generation in an efficient and effective manner that safeguards open access transmission principles,and consider possible changes or improvements to the current participation framework.Recent FERC Orders on Offshore Windin the Capacity Mark

259、etsFERCs responsibilities include ensuring that rules governing participation in the energy,capacity,and ancillary services markets are just and reasonable and not unduly discriminatory or preferential.It is important that market rules governing entry into RTO/ISO markets do not create barriers to n

260、ew offshore wind resources.For example,capacity auctions are used by some RTO/ISOs to pay resources for being available to meet electricity demand during peaks and system emergencies.In New England,generators capacity is bought and sold in one-year blocks,three years in advance,through an auction ru

261、n by ISO-NE.It can be difficult for a new entrant to meet the administrative requirements and clear the RTO/ISO review process necessary to sell capacity.These barriers to entry can be formidable.One example of a barrier to entry is the“minimum-offer”or“buyer-side market power mitigation”rules that

262、require prospective new entrants in the capacity market to submit a package of information justifying their minimum price to sell capacity into the auction.If the intended offer price is too low,it is rejected.FERC finally appears to be reconsidering its controversial minimum-offer pricing policy.In

263、 late 2021,PJMs proposed minimum offer reforms caused a stir when those went into effect with a deadlocked commission.Petitions for review have since been filed at the federal appellate court.In early 2022,New York Independent System Operator(“NYISO”)proposed a package of rule changes intended to be

264、tter accommodate offshore wind resources developed to fulfill state policy objectives,including minimum offer reforms.By contrast,needed reforms in New England have proceeded at a slower pace.ISO-NEs minimum offer rule applicable to offshore wind technology continues to apply to all new offshore win

265、d entry.Although in 2021 the parameters applicable to offshore wind were challenged at FERC,FERC accepted the ISO-NE proposal to maintain the status quo and thus requiring minimum pricing review for offshore wind through the 2025-2026 commitment period.A two-year transition away from the rule may be

266、 proposed to FERC by ISO-NE.From time to time,FERC is asked to waive a rule in a tariff.The applicant must demonstrate that(1)the applicant acted in good faith;(2)the scope of the waiver requested is limited;(3)a concrete harm will be remedied by the waiver;and(4)granting the waiver will not cause u

267、ndesirable consequences,such as harm to third parties.Whether FERC grants a request is often dependent on the fourth factor and,accordingly,it is in the petitioners best interest to seek a waiver on a prospective basis and as soon as possible.In 2019,an offshore wind developer submitted an emergency

268、 request to delay the ISO-NE capacity markets annual auction after FERC failed to act on the developers earlier request to waive compliance with a flawed rule interfering with its ability to sell into the capacity auction.FERC allowed the auction to go forward as scheduled in February 2019,which cle

269、ared capacity for the one-year period spanning the 2022-2023 calendar years.Had FERC granted the offshore wind developers initial request,the project could have qualified for preferred status as a“renewable technology resource.”Because FERC allowed the auction to go forward without addressing the re

270、quest,the offshore wind facility secured the sale of only a fraction of its qualified capacity.In late 2020,FERC dismissed the waiver request as moot.Federal Energy Regulatory Commission:ComplianceRegulatory Compliance FERC regulates transmission and the wholesale sales of energy in the continental

271、United States(outside of the Electric Reliability Council of Texas region)pursuant to the FPA.Prior to making any wholesale sales of electric energy,capacity and/or ancillary services(including sales of test energy),a project company must receive from FERC either market-based rate authorization or c

272、ost-based rate authorization under FPA Section 205 or be exempt from rate regulation by FERC.Offshore wind project companies that will be selling their output,whether to a buyer through contract or into a regional market,will be required to obtain market-based rate authorization from FERC.Sales of e

273、nvironmental attributes(such as renewable energy credits)would fall under the jurisdiction of the relevant state public utility commission.To obtain market-based rate authorization,a project company will have to apply to FERC and demonstrate that it(and its affiliates)do not have market power.FERC h

274、as 60 days to rule on a completed market-based rate application.As the name implies,a project company with market-based rate authority is generally not limited by FERC in the amount it can charge for its wholesale sales of electric energy,capacity and/or ancillary services.Once a project company has

275、 market-based rate authorization,it will be subject to general FERC regulation as a“public utility.”As a FERC-jurisdictional“public utility,”the project company will,as well as being subject to other regulations,be required to file Electric Quarterly Reports(“EQR”)with FERC detailing its power sales

276、 and contracts,to report to FERC changes in the information contained in its market-based rate application and to obtain FERC approval under FPA Section 203 prior to certain changes in upstream ownership.A project company will have market-based rate authority until such authorization is canceled(eit

277、her upon application of the project company or by FERC on its own initiative for noncompliance with the FPA regulations).A project company may be exempt from regulation under FPA Section 205 if it is a“qualifying facility”under the Public Utility Regulatory Policies Act.To become a“qualifying facili

278、ty,”an offshore wind project(or any renewable project)of 80MWac or less would have to file with FERC a Form 556 Certification of Qualifying Status.Although an offshore wind project up to 80MWac will qualify as a“qualifying facility,”only“qualifying facilities”of 20MWac or less are entitled to exempt

279、ion from most FERC regulation(including the need to obtain market-based rate authorization).FERC has also implemented accounting and record keeping regulations pursuant to the Public Utility Holding Company Act of 2005(“PUHCA”).If the project company will be exclusively engaged in making wholesale(a

280、nd not retail)sales of energy from the offshore wind project,the project company can file a notice of exempt wholesale generator status with FERC and become exempt from most of FERCs PUHCA regulations.Enforcement and Compliance Once an entity reaches commercial operations,it must develop a complianc

281、e program for ongoing operations.This will include compliance with the market rules of independent system operators and/or regional transmission organizations(“ISO/RTO”),as well as applicable FERC rules.Individual ISO/RTOs may also require entities planning to participate in the day-ahead and real-t

282、ime markets to prepare a risk manual documenting the companys risk policies.The FERC Office of Enforcement has authority to investigate failures to comply with market rules,as well as instances of market manipulation.Regulated entities that discover compliance violations are strongly encouraged to s

283、elf-report the violation to the Office of Enforcement.Issues which the Office of Enforcement has recently investigated,in the forms of self-reports or investigations,include:Regulatory Filing Violations.Companies have self-reported failures to timely obtain Qualifying Facility status,failure to time

284、ly file EQR reports,and updates to their market-based rate filings.Capacity Market Obligations.Enforcement staff has investigated several companies for failure to comply with capacity market supply obligations.One recent settlement involved a failure to comply with the markets must-offer requirement

285、,while another involved inaccurate de-list bids.Ultimately,effective compliance programs remain critical,whereby staff and management are equipped with sufficient training,tools,and other resources to detect and correct instances of non-compliance.U.S.OFFSHORE WIND HANDBOOK 202231U.S.OFFSHORE WIND H

286、ANDBOOK 202230Source:https:/ If an offshore wind project meets the criteria for registration,it will be registered,by the applicable NERC regional entity,as a Generator Owner and/or Generator Operator and be required to comply with the reliability standards that apply to those registered functions.T

287、he registration criteria includes generating resources connected at 100kV or higher with a gross individual nameplate rating greater than 20MVA or a gross plant aggregate nameplate rating greater than 75MVA.Owners and/or operators of such facilities connected to the electric power grid at 100kV or h

288、igher,are required to register with NERC in the appropriate asset class.The owner and/or operator of an offshore wind facility would need to register as a Generation Owner or Generation Operator when the facility nears commercial operations.Registration will bring with it compliance obligations for

289、the applicable suite of reliability standards,related to grid operations,physical security,and cyber security.1 The Bulk Electric System(“BES”)is comprised of electric generation and transmission resources and associated equipment,which operates at voltages of 100 kV or higherNorth American Electric

290、 Reliability Corporation:ComplianceIn addition to market regulation,FERC oversees the reliability of the Bulk Electric System1(“BES”).FERC has delegated to the North American Electric Reliability Corporation(“NERC”)the authority to create and enforce reliability standards for the BES.NERC,together w

291、ith its six Regional Entities,comprise the Electric Reliability Organization Enterprise.NERC and the Regional Entities develop,implement and enforce reliability standards,monitor the bulk power system,and conduct audits of registered entities compliance.NERC and the Regional Entities also register c

292、ertain owners,operators and users of the BES.2.3 Federal Indian LawBy:Bart Freedman,Ben Mayer,Endre Szalay,K&L GatesFederally recognized Indian tribes are independent sovereign nations.In addition to the general body of federal law that applies to all tribes and tribal entities,some tribes have addi

293、tional rights under treaties and other agreements with the federal government.Given the number of recognized tribes and tribal entities on the West Coast,it is important to keep them,their lands,and other rights they possess as sovereign governments in mind during the development and financing proce

294、ss for offshore wind projects.In the Pacific Northwest,for example,many tribes have treaty fishing rights.To ensure a successful project,developers also must navigate federal consultation requirements and policies.All of these laws and rules may impact both offshore and onshore aspects of project de

295、velopment.Key among a treaty tribes rights in Washington and Oregon is the right to access usual and accustomed(“U&A”)areas for fishing.These U&A grounds include areas offshore of the Washington coast that could be suitable for wind development.For example,federal rules describe U&A fishing areas wi

296、thin the U.S.s exclusive economic zone off the coast of Washington for certain treaty tribes(e.g.,Makah,Quileute,Hoh,and Quinault).In addition to access,the treaty right to fish includes the right to a fair share of the catch and protection of fishery habitat from human caused environmental degradat

297、ion.Tribes are protective of their treaty fishing rights and materially impacting a tribes ability to fish in its U&A constitutes a treaty violation.As a result,offshore projects(as well as supporting infrastructure such as transmission lines and onshore support)cannot include permanent structures t

298、hat would displace a treaty tribes fishing practices within its U&A absent an agreement with the impacted tribe.Tribes have used their treaty fishing rights to successfully block required authorizations for projects in the past,including the Lummi Nations blocking of a deep water export facility at

299、Cherry Point,Washington,the Lummi Nations blocking of a federal permit for a fish farm comprised of net pens in the Puget Sound,and the Muckleshoot Indian Tribes opposition to a marina in Elliott Bay in Seattle,Washington.Each project would have denied the affected tribe access to locations where th

300、ey exercised treaty fishing rights.In addition,in all areas of the country,federally recognized tribes have consultation rights under federal law,including under Section 106 of the National Historic Preservation Act(“NHPA”)and various executive policies and orders.Section 106,which is often implemen

301、ted through the National Environmental Policy Act(“NEPA”)review for a proposed project,requires federal agencies carrying out projects to consult with tribes that attach historical and/or cultural significance to properties potentially affected by those projects.Consultation must be conducted in a s

302、ensitive manner respectful of a tribes status as a sovereign governmental entity,and include an evaluation and the development of measures to avoid and/or mitigate impacts to culturally sensitive areas.Finally,there are many other factors that should be taken into consideration when working with tri

303、bes in the United States.For example,state taxation laws apply differently on trust lands and tribes generally have their own power to tax.In addition,under current law,tribal ownership of renewable energy property can complicate structuring for project finance.(We note that pending legislation may

304、mitigate some of these factors).Parties contracting with tribes also must consider a number of other factors,from sovereign immunity and dispute resolution to governing law and jurisdictional considerations,as well as many others.The United States Department of the Interior,Indian Affairs,releases a

305、n annual list of federally recognized tribal entities.The most recently released list(January 2022)may be found in the Federal Register at:https:/www.govinfo.gov/content/pkg/FR-2022-01-28/pdf/2022-01789.pdf U.S.OFFSHORE WIND HANDBOOK 202233U.S.OFFSHORE WIND HANDBOOK 2022322.4 State Offshore Wind Pol

306、icy and Regulatory IssuesBy:Buck Endemann,Kenneth Gish,Kimberly Frank,Nathan Howe,Maeve Tibbetts,Jennifer Mersing,Molly Barker,David Wang,K&L GatesA number of eastern states have taken action to support the development of offshore wind projects,with some enacting new laws and regulations to facilita

307、te competitive procurements that provide winning bidders with long-term offtake arrangements to sell output and/or renewable attributes produced by these resources.Through these states programs,more than 11.5GW of this important carbon-free electric power source,serving major population centers incl

308、uding New York City,is anticipated to achieve commercial operation by the end of 2028.These state programs are to be credited for providing a stable,competitive platform necessary for developers and financiers to develop these important projects.States offshore wind programs are redeveloping local e

309、conomies,revitalizing ports and manufacturing hubs,and providing commercial opportunities across the supply chain.States have adopted different approaches to support the development of offshore wind.Some states like New York,New Jersey,and Maryland have incorporated offshore wind into their renewabl

310、e portfolio standards(“RPS”)by creating technology-specific renewable energy credits for offshore wind.These Offshore Wind Renewable Energy Credits(“ORECs”)are generally the environmental attributes of one MWh generated by the offshore wind facility and may include other product characteristics.Unde

311、r these state procurement procedures,developers bid an OREC price as part of their application,and this price is awarded to the winning bidder.The selection process,however,is not limited to price,and requires consideration of a number of other criteria,such as environmental impacts and local econom

312、ic development,to determine the winning bid.Other states,such as Massachusetts,Rhode Island,and Connecticut have developed a procurement process that results in a long-term power purchase agreement(“PPA”)between the project and the local load-serving utilities.Under these PPAs,the generator contract

313、s with the electric distribution utilities within the relevant state to sell bundled energy and renewable energy credits generated from the project at a competitively offered rate.The electric distribution utilities sell the delivered energy and can either sell the renewable energy credits or use th

314、em to meet their own renewable energy obligations.The generator keeps any revenues it receives for capacity and ancillary services from the wholesale markets.States that use an OREC procurement approach:Maryland-In Maryland,the state regulatory commission administers the procurement and selects the

315、project based on price and other criteria.The state commissions OREC Order sets the terms for the projects sale of ORECs.Load-serving entities purchase ORECs in order to meet that suppliers RPS requirements.The commission recently completed a“round two”procurement securing more than 1,600MW of capac

316、ity.New Jersey-In New Jersey,the ORECs are sold to the state electric utilities as the agents of all energy suppliers through a participation agreement entered into with a third-party OREC administrator.New York-Under New Yorks procurement program administered by the New York State Energy Research&D

317、evelopment Authority(“NYSERDA”),developers are allowed to bid either a fixed OREC price or a variable index strike price that is calculated monthly as part of their bid application.The winning bidder may enter into a long-term contract to sell the ORECs to NYSERDA,which then resells the ORECs to loa

318、d-serving entities to meet their RPS compliance obligations.States that use a bundled energy plus renewable energy credits procurement approach:Connecticut-In Connecticut,the request for proposals is issued by a state agency.Projects selected by the agency have the opportunity to enter into PPA nego

319、tiations with the electric distribution utilities.The PPAs are then submitted to the state regulatory commission.Massachusetts-The Massachusetts program centralizes the request for proposals process into a joint offering by electric distribution companies,in coordination with the state agency.Rhode

320、Island-Rhode Island has passed legislation allowing for participation in the offshore wind procurement processes of other New England states,and Rhode Island participated in the 2017 Massachusetts RFP to select a procurement of 400MW.The goal of these approaches,whether through an OREC Order issued

321、by the state utility regulatory commission or a PPA with the distribution utility,is to reduce project risk by providing a long-term stable revenue stream for the project.Key States in Offshore WindThe approaches and progress of these states and several others follows.We have addressed states alphab

322、etically without regard to the approach taken.CaliforniaCompared to the Eastern Seaboard states,California offers new opportunities and challenges to developers and operators of offshore wind projects.In general,the waters off California tend to be deep and rocky,such that developers typically plan

323、to use floating or tethered wind turbine technology to harness the significant wind resources in the central and northern parts of the State.California has also historically invested heavily in coastal transmission and substation infrastructure,at least in the southern and central parts of the State

324、.Due to the retirement of several nuclear and once-through-cooling power plants,these assets are carrying less capacity and may facilitate cheap onshore transmission of wind power that is generated offshore.Northern parts of the State,however,where the wind resource tends to be best,remain very tran

325、smission constrained.In April 2019,BOEM released a memo summarizing the indications of interest received for commercial leases off California and included 14 companies that were deemed legally,technically,and financially qualified to participate.BOEM announced that the next step is to identify the s

326、pecific areas that will undergo NEPA review(i.e.,portions of the Humboldt,Morro Bay,and Diablo Canyon areas),and after that,the actual leasing process.In July 2021,BOEM advanced these efforts,identifying two additional areas within a 399-square-mile area located off Morro Bay,called the Morro Bay Ca

327、ll Area East and West Extensions.BOEM also formally designated the Humboldt Wind Energy Area(“WEA”)offshore northern California and began the NEPA process to conduct environmental review.On January 11,2022,BOEM released the Draft Environmental Assessment that analyzes the potentially significant env

328、ironmental effects of issuing a lease and site assessment activities.On January 25-26,2022,BOEM held a public meeting to inform the public on the development of a Draft Environmental Assessment for the Humboldt WEA.On February 11,2022,BOEM made a Finding of No Historic Properties Affected.With some

329、carve-outs for military and environmentally sensitive areas,California retains jurisdiction over the first three miles of water off its coastline.While few wind turbines will be sited that close to shore,any transmission or substation infrastructure within three miles of the coast requires a lease f

330、rom the California State Lands Commission.Onshore or near-shore development related to the offshore project would trigger review by the California Coastal Commission,which evaluates whether BOEMs proposed leasing is consistent with the California Coastal Act.All state leasing and permitting decision

331、s must comply with the California Environmental Quality Act(“CEQA”),which requires the lead government agency to identify any significant environmental impacts arising from the project.The project must incorporate feasible mitigation measures to mitigate those impacts to a level that is“less than si

332、gnificant.”Based on our experience with onshore solar and wind development,we anticipate that CEQAs citizen-suit provisions will offer project opponents a powerful tool to block or modify projects they dont like(unless exemptions are granted by the California legislature).California has an aggressiv

333、e Renewable Portfolio Standard(“RPS”)and may need a significant amount of new renewable generation to meet its goal of 60%RPS by 2030 and 100%RPS by 2045.California is also adding electric vehicles(“EVs”)to its highways at a clip of 20,000 per month,and aims to have five million EVs on the road by 2030.To facilitate offshore wind development(estimated to be at least 20GW,at 46-55%capacity factors)