Source:  N.C. Offshore Wind Coalition, 5/20/11

FRIDAY INTERVIEW: Four Questions For Brian O’Hara

Brian O’Hara is the president of the North Carolina Offshore Wind Coalition.

Offshore Wind Wire: Please tell us about the North Carolina Offshore Wind Coalition.
Brian O’Hara: The North Carolina Offshore Wind Coalition is an organization that was formed out of the recognition of an immense opportunity; namely that this state is potentially the most productive new frontier for driving growth in the U.S. offshore wind industry.

The Coalition is a non-profit industry and advocacy group that is focused on creating a robust offshore wind industry through education, outreach, and policy work.  We receive support from and work closely with major industry leaders, including developers, manufacturers, and consultants, and we also have strong relationships with non-profits, environmental groups, and regional economic development partnerships.

The justification for focusing on North Carolina is fairly straightforward.  First, this state has, according to NREL, the largest offshore wind resource on the East Coast – a full 26 percent of the total in less than 30 meters of water.  It also has a very unique and energetic microclimate created by the near-shore path of the Gulf Stream coming from the south and its convergence with the Labrador Current coming from the north, resulting in high estimated capacity factors.

North Carolina also has the lowest estimated cost of construction for offshore wind according to the U.S. Department of Energy’s Energy Information Administration.  That advantage is driven largely by a low cost of living and highly competitive labor markets, which translates directly to lower energy costs – as much as 20 percent to 25 percent lower than some states in the Northeast according to EIA.

But we do not focus exclusively on North Carolina.  While there is understandable competition among states to attract supply chain jobs, we believe that regional solutions are ultimately what make the most sense.  As such, we are making efforts to reach out to our neighbor states to explore opportunities for collaboration.

OWW: What is the current state of offshore wind development in North Carolina? What are the major challenges to development?
O’Hara: Until recently, North Carolina has been a sleeping giant in offshore wind, but the giant is stirring and we’re already seeing some impressive steps.  The state wisely started with a comprehensive offshore wind study by the University of North Carolina in 2009 that looked at both the resource and the potential use constraints.  That study has provided an excellent baseline understanding of North Carolina’s offshore environment and has streamlined the BOEMRE Task Force work.  The Task Force is now very close to identifying potential areas for an RFI and despite applying very conservative and widespread exclusions for military, environmental, and use constraints, the state still has over 500 lease blocks in less than 40 meters of water under consideration.

The major challenges in North Carolina are similar to those in every other state.  Citizens and leaders rightfully want to see that developing offshore wind and related transmission will provide a net benefit before they commit to moving forward.  Considering all the positives – jobs, economic development, price stability, energy security, scalability, environmental, public health, etc. – that is not hard to do, but it does require education and that takes some time.

Overall, there is tremendous excitement around offshore wind, with a recent poll showing that 83 percent of NC voters support developing the state’s offshore wind resource.  The sense of opportunity in the state is inspiring and palpable.

OWW: NC State Sen. Fletcher Hartsell recently introduced the Offshore Wind Jobs and Economic Development Act. Where does that legislation stand now and do you think it will become law?
O’Hara: Senators Hartsell (R), Stein (D), and Bingham (R) have demonstrated tremendous vision and leadership by introducing and championing this legislation, Senate Bill 747.  The bill is ambitious and forward-thinking, borrowing successful elements from other states’ policies and introducing some new concepts to address North Carolina’s unique needs.

I like to first describe what the bill does not do.  Passing S747 does not create a mandate for purchasing offshore wind energy, nor does it use any state appropriated funds.  What it does do is initiate a process for the state to receive competitive bids for a 7 to 10 year development program totaling 2,500 MW.  The state would then analyze all of the life-cycle costs and benefits of those proposals to determine the net economic impact.  Long-term contracts with utilities would only be awarded if proposals are determined to be in the best interest of the state.  Basically, the bill lets the state see the best industry has to offer with no risk.  If state leaders like what they see, then they move forward with development.  If not, there is no obligation.  The bill would also set a state goal of 5,000 MW by 2030 and extend an existing wind energy manufacturing tax credit out to 2020.

S747 is genuinely good policy for the state and its citizens.  Unfortunately, the bill’s most vocal opponents have been the state’s investor-owned utilities, Duke Energy and Progress Energy.  The utilities are run by good people with good intentions, but there is a paradigm shift happening in energy policies where we are seeing states and their citizens take a more active role in choosing their best energy options.  A key goal is going to be finding the ways for utilities to continue delivering value to their shareholders in this new reality.

So will S747 become law?  We will see.  It’s an ambitious bill with some influential opponents, which makes it a big challenge.  Either way, I am confident we will see North Carolina continuing to take significant policy steps in the right direction.

OWW: When can we expect to see the first offshore wind project built in North Carolina?
O’Hara: December 5, 2017.  No, I’m kidding.  Sort of.
It is going to depend on how well stakeholders are able to work together, but I think a North Carolina wind project in the water in the 2017-2018 timeframe is entirely possible.

One factor that could have a big impact on offshore wind in North Carolina is the planned merger between Duke Energy and Progress Energy, which would create the largest utility in the U.S.  Those plans have a lot of consumers concerned about possible impacts.  There are also concerns about the state’s current energy mix.  North Carolina is the second largest importer of coal in the U.S., with over half of our electricity in 2009 coming from burning coal.  We also rely heavily on nuclear energy, with about 35 percent of our electricity coming from nuclear compared to a national average of around 20 percent.  Given the uncertainty around the future of these two energy sources, I think we will see several groups calling for a major commitment towards renewable energy as a precondition of the merger approval.

My vision for our energy future, not just in North Carolina but for all of us, is a completely free-market approach.  I like to imagine a world where we remove all subsidies for all energy types and also honestly account for all of the lifecycle costs of our energy production, including public health and environmental costs.  Under that scenario, I think we would see a lot more renewable energy, including offshore wind, and a lot less fossil fuel consumption, not because of political persuasions but because it makes good economic sense.  Perhaps that’s a little utopian and naïve, but I think it’s a vision worth working towards.