On October 23, 2012, the Department of Interior (“DOI”) announced that the Bureau of Ocean Energy Management (“BOEM”) will lease 96,430 acres of federal waters off the coast of Delaware to NRG Bluewater Wind Delaware LLC (“NRG”).   The lease is the first under DOI’s “Smart from the Start” initiative, which aims to streamline the process for developing wind in the Outer Continental Shelf (“OCS”) by identifying areas for wind development through a “coordinated environmental analysis, public review and large-scale planning.”  DOI has only granted one other federal lease for an offshore wind project to the Cape Wind Energy Project (see April 25, 2011 edition of the WER).

The lease grants NRG the exclusive right to submit plans to BOEM on wind development activities on the leased land.  NRG may now also submit a Site Assessment Plan (“SAP”) with a proposal to conduct assessment activities, such as installing a meteorological tower or buoy.  NRG may also submit a Construction and Operations Plan (“COP”), which details the construction proposal for the wind facility or the cabling of the facility to shore.  In its original project nomination, NRG proposed a 450-megawatt project, with estimates that the project could generate enough power to supply electricity for over 100,000 homes. The estimate may change after NRG undergoes additional planning and a COP is submitted to BOEM.

Uncertainty still exists with the financing of NRG’s project.  NRG previously entered into a power purchase agreement with Delmarva Power & Light Co.; however, NRG announced in December 2011 that the power purchase agreement had to be terminated in part due to a lack of investment partners.

A link to the DOI press release is available here.