By Alex Morris, General Manager – May 2024
In early 2023, CC Power began investigating California Offshore Wind (OSW) opportunities, acting on behalf of our nine Community Choice Aggregator (CCA) members. This work lives on today as we announced an MOU with the CADEMO project (more on that below).
CCAs wanted more information on OSW. The operating profiles of OSW, similar in some respect to out-of-state wind and geothermal power, could potentially, if cost-rational, support the CCAs’ portfolios of power projects, many of which do or will include solar, energy storage, wind, geothermal and other clean resources. Further, some CCAs serve areas where OSW development may occur, including the electricity service territories of Central Coast Community Energy (3CE) and Redwood Coast Energy Authority (RCEA), driving a natural local economic interest.
CC Power’s Request for Information (RFI) on OSW researched not only the performance capabilities of offshore wind but also how a collection of CCAs might play a leadership role in supporting California-centric OSW development in an economically justifiable manner. CCAs are very well equipped for and experienced at contracting for renewable power resources, often through Power Purchase Agreements (PPAs).
For OSW, the PPA is, in many ways, the easiest part of developing the resource. The more challenging and uncertain aspects of OSW development, to me, likely included high costs, port infrastructure development, technology risk, siting and permitting, and interconnection and transmission buildout considerations. Power plant developers generally need to understand their costs and timelines in order to determine PPA prices, but the huge uncertainty that currently exists around these key cost drivers at this early stage of OSW development on the West Coast may mean that PPA price estimates are likely inadequate, uncertain, or very high.
CC Power considered how the OSW industry matured elsewhere to inform what a reasonable strategy for CA could look like and how CCAs could fulfill their role as energy procurers, local community members, and ratepayer advocates. OSW in CA and the West Coast as a whole is still being mapped out with much new input from many key agencies like the California Energy Commission and key stakeholders, but certain East Coast OSW projects just recently started commercial OSW operations. Much learning has occurred in getting to this significant milestone.
A major takeaway from East Coast OSW efforts is that things rarely worked out perfectly as planned. Whether it was contract terms, interest rate forecasts, cost management, vessel planning and related Jones Act compliance, environmental permitting, adversarial messaging and misinformation campaigns, concerns from local and impacted communities, manufacturing facility development, impacts of competitors, environmental and permitting outcomes and timelines, or more, early OSW developments present many challenges.
Figure 1: October 2023 Vineyard Wind Staging and Integration Port and Ship – 15 MW Turbines are very big!
Figure 2: October 2023 Vineyard Wind Staging and Integration – they assemble the towers on shore before taking them out for install at the ocean-site
Given these legitimate concerns and the likelihood of OSW being problematically expensive compared to competitor clean-energy resources, CC Power considered: 1) possible strategies for supporting and accessing OSW; 2) information from developers and stakeholders through the RFI; and 3) our members’ appetites for OSW compared to other renewable resources.
Figure 3: October 2023 Vineyard 1 Wind – out at sea, the nacelle being installed on a fixed bottom wind tower
One strategy was to look for win-wins for our CCAs and the industry by helping industry progress in cost-rational ways. Funding a demonstration pilot was one strategy, as it would enable a test run of permitting and interconnection, operations, monitoring, and more. A demonstration also could use existing (already crazy huge!) turbine technology – viewed as potentially too small by some West Coast OSW developers – and could thus come online sooner, beneficially informing all of us while activating many parts of the industry for California, e.g. through labor contracts, select port development, etc. In the end, the CC Power Board approved a plan for CC Power to both explore demonstration options (see CADEMO below) and to further investigate OSW with an eye towards formal consideration of OSW contracts in a few years.
Figure 4: October 2023 Vineyard Wind Substation Construction
CADEMO (pronounced as “ca demo”) is a special opportunity, three miles off the 41 miles of the CA coastline near the Department of Defense Vandenberg Space Force Base in central California. At a site and coastal stretch known for its older oil platforms, the CADEMO project proposes to install four OSW turbines, using available wind turbine technology. CADEMO is in state waters, rather than federal waters, so permitting will be in the hands of state agencies. The Lompoc electrical area, which includes the Vandenberg Base, is in a location of the grid fed by PG&E’s wire(s) where there might be value in adding sizeable local generation from CADEMO to help ensure reliability for the somewhat isolated area as a whole. CADEMO thus stands (floats?) as the only ‘shovel-ready’ and immediate OSW project that California can explore today, even though we all should expect many challenges in a first-of-its-kind development like this.
CADEMO’s developers have real offshore wind experience and have taken noteworthy advanced steps in stakeholder management that make it especially appropriate for partnership with CC Power:
■ Its Community Benefits Agreement with the Santa Ynez Band of Chumash Indians, signed November 2023, is, we understand, the nation’s first such agreement between a tribe and a floating offshore wind developer. CADEMO’s site is in the tribe’s ancestral waters and lands, and the agreement sets a precedent for successful engagement between California’s offshore wind industry and coastal tribes.
■ A Mitigation Agreement with the U.S. Defense Department that allows CADEMO to operate in close proximity to the Vandenberg space launch activities. This will develop practices and data to help de-risk the military’s relations with future offshore wind projects.
■ A three-year High Road Training Partnership grant from the California Workforce Development board, with CADEMO as test case to develop best practices for labor relations in offshore wind.
■ A Project Labor Agreement between CADEMO and the State Building and Construction Trades Council, covering all phases of the project on land and offshore.
In supporting CADEMO, we can learn a lot about the viability, development steps, costs, performance, environmental complexities, and risks of future OSW. This fits with the CC Power Board’s guidance on OSW. CC Power’s Memorandum of Understanding with CADEMO creates a framework for formal communication and collaboration, and I’m excited to further collaborate with the CADEMO team. As entities like CCAs pursue cost-effective clean energy and learn how and where OSW fits into our clean power portfolios, smart steps now can beneficially inform us while incubating a new potential energy resource.