Offshore Wind Comes to California

Early in his presidency, Joseph Biden made it clear that advancing the development of offshore wind (OSW) in the United States would be a key component in his Administration’s strategy to both spur the country toward addressing the climate crisis and to foster economic development and job growth. In May of 2021 the Biden Administration, along with Governor Newsom, announced that waters off California’s coast would be opened for the development of OSW. The Departments of Defense and the Interior have identified two areas for OSW off the coasts of Morro Bay and Humboldt County. While other countries around the world and even other states within the U.S. have preceded California in OSW investment and deployment, California has an opportunity to serve as a leader with regard to floating offshore wind technology. These first two areas identified for OSW in California, Morro Bay and Humboldt, are anticipated to bring up to 4.6 GW of clean energy to the grid once projects are completed.

Beginning to permit and deploy California’s floating OSW projects will be a complex process that is expected to take several years. Numerous Federal and State actors will play a role including the Bureau of Ocean Energy Management (BOEM), the California Coastal Commission (CCC), the California Energy Commission (CEC), Public Utilities Commission (CPUC), the California State Lands Commission (CSLC), the National Oceanic and Atmospheric Administration (NOAA), and many coastal local governments, among others.

In an effort to jumpstart this process, the California State Legislature passed AB 525 in September of 2021, with strong bipartisan support. This bill acknowledges the prospective economic benefits of OSW, as well as its potential to help the state progress toward meeting its statutory renewable energy and climate mandates. AB 525 as enacted directs the CEC, along with multiple other agencies, to develop a strategic plan for California to develop OSW resources by 2045. Key provisions of the bill, which lay out a timeline for next steps, include:

• The CEC must evaluate and quantify the maximum feasible capacity of OSW to achieve reliability, ratepayer, employment, and decarbonization benefits and to establish OSW planning goals (including megawatt targets) for 2030 and 2045 by June 1, 2022.
• By December 31, 2022, the CEC must provide a preliminary assessment of the economic benefits of OSW as they relate to seaport investments and workforce development needs to the Legislature and the Natural Resources Agency.
• The CEC, in coordination with other agencies, must develop a strategic plan for OSW energy developments installed off the California coast. The CEC is directed to submit this strategic plan to the California Natural Resources Agency and the Legislature by June 30, 2023. This strategic plan must:
  • Identify suitable sea space for wind energy areas sufficient to accommodate the OSW planning goals for 2030 and 2045; this process must include input from stakeholders, state, local, and federal agencies, and the OSW energy industry;
  • Develop an economic and workforce development plan to improve waterfront facilities to accommodate the development of floating OSW;
  • Work with the CPUC and the California Independent System Operator to assess the transmission investments and upgrades needed to support the 2030 and 2045 OSW planning goals;
  • Create a permitting roadmap that describes timeframes and milestones for a permitting process for OSW energy facilities and associated electricity and transmission infrastructure;
  • Identify and address potential impacts on coastal resources, fisheries, Native American and Indigenous peoples, and national defense, and strategies for addressing those potential impacts.

As the CEC identifies sea space for OSW development, the agency must utilize BOEM’s California Offshore Wind Energy Gateway, which assembles geospatial information on ocean wind, ecological and natural resources, commercial and recreational ocean uses, and community values to make this information available to the public. The Legislature expressed its intent to provide opportunities for public comment on both the strategic plan and the permitting roadmap to be drafted by the CEC.

Given all the factors – the complicated regulatory environment inherently faced by projects that involve federal waters, including BOEM jurisdiction over the Outer Continental Shelf, state waters issues, and state lands; the need for resource commitments from policy-makers, regulators and utilities; and BOEM’s lengthy and thorough leasing process – the road to constructing and benefiting from OSW in California is likely to be a long one. There are still many hurdles to overcome before projects will come to fruition and also many opportunities to shape this fledging OSW policy. AB 525 serves as an important catalyst to begin the early planning stages of developing much-needed OSW energy in California.

Contact: Brian Biering and Jeff Harris