Maryland Invites Bids for Offshore Wind Project, but Will Anyone Bite?

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Written by Eric Funderburk for Industrial Info Resources (Sugar Land Texas)

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Summary

Last week, Maryland invited bids for a new offshore wind project after a judge ruled that the White House's moratorium on offshore wind permitting was unlawful. However, a government review of a previously permitted project in Maryland's waters demonstrates the administration's strong stance against the technology and suggests that any company placing a bid on a new project may be in store for serious challenges from the feds.

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The Drama Takes Root

There's a bit of drama unfolding in Maryland, which depending on how enthralled one is by the U.S. power sector and its governing policies, has all the makings of a good soap opera. The story really starts on the opening day of President's Donald Trump's second term, when he issued an executive order putting a moratorium on all reviews and permitting practices for U.S. offshore wind projects.

But simply stopping new projects wasn't enough; the administration took aim at previously permitted projects as well as projects already under construction. Perhaps the most dramatic move came when the administration issued a stop-work order for Equinor's (Stavanger, Norway) 80%-complete Empire Wind 1 offshore windfarm off the coast of New York. Work on the project was subsequently resumed but resulted in Equinor (67% owned by the Norwegian government) writing down a $955 million loss from the work stoppage. A similar blow was dealt to Orsted's Revolution Windfarm off the Rhode Island, which was significantly completed when a stop-work order was issued, only to be lifted by a federal judge the following month.

A group of 17 states and the District of Columbia filed suit against the federal government's offshore permitting moratorium, and a federal judge in Massachusetts court ruled on the case early last week, which plays into the drama that is developing in Maryland.

Noting the federal government's antipathy toward offshore wind development and the uphill battles that loomed, several offshore wind developers cancelled projects or put them on an indefinite hiatus. However, not all of those offshore developers abandoned their projects, and a diminished group of companies is still moving ahead with their projects as best they can.

US Wind

One of these companies is US Wind (Ocean City, Maryland), which under the Biden administration secured permission to develop a 2.2-gigawatt windfarm in Maryland waters. In late August, the Trump administration said it was rescinding the windfarm's permitting in order to review it.

In a bit of a David-versus-Goliath move, US Wind filed suit for an injunction against the review, stating, more or less, that the Biden administration's review of the project was adequate and there is no need to revisit the permitting process. That case was resolved earlier this week, when a federal judge ruled that the government's review of the project was perfectly legal and within its rights.

Overturning of Permitting Moratorium

But that court decision actually comes later in our story, a week later to be precise. First, we need to revisit the case filed by the 17 states and D.C. against the permitting moratorium. Last week, on December 8, a federal judge found that the moratorium was "arbitrary and capricious and contrary to law," meaning that the feds have to once again at least open the review process for offshore wind projects.

Stepping almost immediately to the plate the day after the ruling, December 9, Maryland announced it would open bidding for an offshore wind project.

Not Many Specs

In a sense, Maryland seems to be playing the field and seeing what's on offer. The invitation is fairly open-ended with few requirements, including no specified generation capacity. Stipulations include that the developer holds a federal lease at least 10 miles from the Maryland coast, is willing to enter into a 20-year power purchase agreement with the state, and is able to connect to the power-thirsty PJM Interconnection via Maryland's portion of the Delmarva Peninsula, which it shares with Delaware and Virginia. A pre-bid conference is scheduled for today, December 17, but Monday's ruling supporting the White House's review of the US Wind project will undoubtedly serve as a warning to potential developers.

The relevant federal agencies are almost certain to go over the permitting process for US Wind's project with the finest-toothed of combs, searching for any whiff of irregularity.

A Message of Sorts

The Trump administration really couldn't have had the ruling supporting its permitting review for US Wind come at a better time, if putting up barriers to offshore wind development is its aim. Coming just two days before the pre-bid conference, the ruling serves as a warning to potential Maryland wind developers that while a state may be begging and pleading for an offshore project, the federal government has the last say, and it is most definitely playing hardball.

It remains to be seen whether any developer is willing to rise to the challenge of a Maryland project, potentially holding the stakes in an offshore windfarm that will face a difficult battle in all aspects of moving forward at the federal level. Bids for the Maryland project are due by January 16, potentially leading to the first newly proposed offshore wind project to be reviewed by the second Trump administration, which is almost certain to find the smallest of errors and irregularities in a project's specifications, leasehold permissions or environmental footprint. Any takers? Maryland's ready for you!--the White House, perhaps not so much.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can learn more by viewing the related project reports on the US Wind, Empire Wind 1 and Revolution offshore wind projects.

Key Takeaways

• The day after a federal judge stopped the federal government's moratorium on offshore wind power permitting, Maryland said it would invite bids for a new offshore project.
• A pre-bid conference regarding the project is scheduled for today, and bids are due by January 16.
• Earlier this week, a federal judge ruled that the Trump administration is within its rights to review a Maryland offshore wind project that received permitting during the Biden administration.

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