The Delaware State Senate passed the Offshore Wind Energy Act. What the Act does

The Delaware State Senate passed a bill specifying the procedure for implementing offshore wind projects in the state.
The bill has already been referred to the state House of Representatives for consideration.
The bill could also pave the way for other large-scale clean energy projects that rely on sources such as solar power.

Delaware’s path to harvesting offshore wind energy along its coast has moved a step forward.

Senate Bill 265, which outlines the process government agencies will go through when contracting for offshore wind projects in the state, officially passed the Delaware Senate on Thursday, with several changes from the bill’s original text.

The bill has already been referred to the state House of Representatives for consideration.

SB 265, or the Delaware Energy Solutions Act of 2024, has been heralded by environmentalists as a major victory and a big step for the state in meeting its clean energy goals, but there are still opponents who worry about its economic feasibility and potential impact on tourism .

The bill could also pave the way for other large-scale clean energy projects that rely on sources such as solar power.

BACKGROUND:The new bill sets the stage for offshore wind projects in Delaware. Here’s what you need to know

What does the bill say?

The bill sets out an exhaustive process that offshore wind companies interested in investing in Delaware will have to go through.

Essentially, three sections of the Delaware code will be adjusted under this bill. These three sections would cover highways and roads (Title 17), public utilities (Title 26), and state government agencies (Title 29). Under the bill, the Delaware Department of Transportation, the State Energy Office, the Renewable Energy Task Force and the Public Utilities Commission have input into final approval of an offshore wind project.

The customer acquisition process to find a suitable wind project would begin with the State Energy Administration issuing requests for proposals after assessing whether market conditions allow the state of Delaware to be involved.

Originally, the State Energy Office was limited to ordering 800 to 1,200 megawatts of power for utilities in Delaware. Senate Amendment 1 removed this minimum requirement but left the maximum capacity at 1,200 megawatts.

More:What to expect in 2024 from the development of offshore wind energy in Delaware

More:Delaware’s beach towns have offered payouts to support offshore wind projects. Will this work?

One of the main elements of the bill is the cost of wind energy. The text of the bill states that the cost per megawatt cannot exceed 110% of the “Delaware benchmark price,” which is essentially the average price that Delaware customers have paid for power over the past three years.

To be considered, bids must be valid for at least 20 years, not exceed 110% of the Delaware benchmark price, and specify economic and health benefits, avoided greenhouse gas emissions, impact on energy bills and impact on the regional electrical grid.

Terms of the contract will be negotiated by various government agencies based on the project’s potential costs and benefits, health benefits, avoided greenhouse gas emissions and more before the Public Utilities Commission issues a final order. Before the project can be built, however, the applicant must obtain appropriate permits from the Public Utilities Commission and DelDOT, which must give approval to applicants wishing to connect transmission lines through any state roads.

This is where the bill’s language becomes broader. Renewable energy interconnection facilities, which include any transmission lines or other equipment connecting any solar, wind or other renewable energy projects to PJM’s transmission system, will be “promoted as an integral part of Delaware’s infrastructure.”

This means that large-scale renewable energy projects, not just offshore wind, will be able to go through a similar process initially.

“This bill is about more than just offshore wind,” Senator Hansen said during the hearing. “This bill establishes major interconnections for renewable energy generation in our state. Whether it’s wind, solar, or something else.

What changes have been introduced to the bill?

Two amendments were adopted with Senate Bill 265.

Senate Amendment 1 outlined eight changes to various details of the procurement process. In particular, it removed the 800 megawatt minimum energy consumption and introduced a requirement that the State Energy Authority must ensure that ratepayers “never bear the costs of any project themselves,” establishing further procedures to keep costs at a reasonable level.

While utilities are not required to opt-in to offshore wind, Amendment 1 requires any utility or rural energy cooperative that decides to opt out of offshore wind must submit a report detailing its approach to contributing to the state’s goals for reducing carbon dioxide emissions and explain why the entity decided not to participate in obtaining energy from offshore wind farm projects.