Add this to the list of tales from the government shutdown.

As a result of the congressional impasse, Dominion Virginia Power, a subsidiary of Dominion Resources (NYSE:D), delayed in the submission of paperwork, which would finalize the lease for a 2GW offshore wind farm off Virginia. Dominion recently received the go-ahead to sign the lease from the Department of Justice after it completed its antitrust review. Serving more than 2.3 million customers in Virginia, Dominion Virginia Power estimates that the proposed wind farm will supply power to over 500,000 homes .

Assuming that the government resumes operations soon, this will not have been a significant hindrance—after all, Dominion does not expect to install the first turbines for another ten years. Each step in the process is noteworthy, though, for there are currently no offshore wind farms in American waters.

Following the charge into uncharted waters
Although Dominion and its offshore wind farm have recently been in the news, it is actually a project in New England that is further along in the development process. Located on Horseshoe Shoal in Nantucket Sound, the Cape Wind offshore wind farm will be comprised of 130 turbines that produce up to 420 MW of clean energy for Massachusetts. Currently, the project is in the financing phase, but construction is scheduled to begin shortly after the financing is completed. Cape Wind has sold over 75% of its future power output in the form of power purchase agreements (PPA) with Massachusetts' two largest electric utilities, National Grid (NYSE:NGG) and NSTAR, an operating company of Northeast Utilities  (NYSE:ES)(NYSE:ES)(NYSE:ES)

The self-declared leader in offshore wind development programs, Deepwater Wind, with its $30 billion in assets, is attempting to develop several offshore wind farms along the East Coast. From its website: "For its projects serving New Jersey, Deepwater Wind has formed Garden State Offshore Energy in partnership with PSEG Global, a wholly owned subsidiary of Public Service Enterprise Group (NYSE:PEG). The Block Island Wind Farm, one of two Rhode Island-area offshore wind farms being developed by Deepwater Wind, is on target to become the nation's first offshore wind farm."

This isn't a lot of hot air
According to a recent Navigant Research report, Offshore Wind Market and Economic Analysis, there is one significant factor that will affect whether offshore wind becomes a viable option for utilities-- natural gas prices.  "Continued low natural gas prices could greatly constrain demand for offshore wind farms in the U.S. If natural gas prices were to rise significantly, however, the attractiveness of offshore wind as an electricity generation source in the U.S. could increase."

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But, Navigant believes that if all nine advanced stage offshore wind farm projects were to be completed by 2018, the U.S. would have nearly 3.5GW of cumulative capacity. They are quick to concede that, for a variety of reasons, all 9 projects will probably not be realized. To put these numbers in perspective, though, the report states that in its first five years of commercial-scale production, Europe added 578MW of offshore wind power. During the period between 2007-2011, Europe added nearly 3GW of offshore wind power -- quite the increase.

The Foolish takeaway. . . 
The widespread acceptance of renewable energy sources by residential and consumer customers seemed like a far-fetched fantasy not so long ago. Not so much anymore. Solar power and wind power are quickly becoming viable power sources. Offshore wind power, though, is still some years away (if at all); nonetheless, if solar and onshore wind can grow in popularity is it overly naive to think that offshore wind can do it too?

Granted, offshore wind faces a variety of hurdles: financing, permitting, and construction to name a few. But, there are utilities that seem to be embracing the paradigm shift when it comes to where and how we source our power. Dominion, National Grid, NSTAR, and PSEG seem to be taking the lead. I believe that this will come to fruition at some point, but for now I'll be keeping an eye on natural gas prices and further project developments before I consider investing.

Scott Levine has no position in any stocks mentioned. The Motley Fool recommends Dominion Resources and National Grid plc (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.