Offtake opportunities for BOEM’s Central Atlantic lease area

June 24, 2023
John Dalton

Recent legislation in Maryland increasing the state’s offshore wind goal to 8.5 GW by 2031 strengthens offtake opportunities for BOEM’s Central Atlantic lease area. This is a significant increase from the 2019 goal set through the Clean Energy Jobs Act of 1.2 GW by 2030. Maryland surpassed this goal with 1,654.5 MW of OREC contracts awarded to US Wind and Ørsted in the round 2 procurement, with over 2 GW of offshore wind contracted between the first two procurements.

With the state targeting a 60% GHG reduction based on 2006 levels by 2031, offshore wind development will play an important role in achieving this goal. The 2031 offshore wind goal will require additional wind energy areas to be available beyond what has been auctioned by BOEM to date, emphasizing the need for BOEM’s Central Atlantic lease auction.

This legislation also provides for the development of open access offshore wind transmission facilities to be procured under PJM’s State Agreement Approach. The Maryland Public Service Commission (MPSC), in coordination with the Maryland Energy Administration (MEA) and PJM, will conduct an analysis of the necessary transmission system upgrades and submit a study to the Maryland General Assembly by July 2024.

Specifically, the study will consider an open-access collector transmission system to provide for the interconnection of multiple offshore wind projects at a single substation. The MPSC will be responsible for developing proposal selection criteria, considering potential interconnection points, evaluating cooperation with other PJM states to maximize consumer benefits, and consulting with electric utilities, transmission facility owners, and other stakeholders.

Informed by the transmission system upgrade analysis and proposal selection criteria, by July 2025, the MPSC shall issue or request PJM to issue a request for proposals for open access offshore wind transmission facilities and complementary onshore transmission upgrades and expansions. The MPSC and PJM shall include specifications in the solicitation that require proposals to allow future transmission facilities to interconnect in a meshed network and share landing points. Proposals should consider other clean energy generation, both offshore and onshore, and storage facilities. The bill requires that any proposal selected demonstrate net benefits to ratepayers compared to connecting 8.5 GW of offshore wind to the PJM grid using generator lead lines. Proposals are to maximize use of US Department of Energy (DOE) funding.