The American Wind Energy Association, or AWEA, just wrapped up its WINDPOWER 2014 show, during which there were several developments regarding domestic offshore wind projects. These included the awarding of three projects up to $47 million each over the next four years by the Department of Energy, which identified demonstrations that can "deploy innovative, grid-connected systems in federal and state waters by 2017."
Founded by New Jersey commercial fishermen interested in developing wind power resources along the East Coast, Fishermen's Energy received funding to install five 5-MW turbines that feature direct-drive turbine technology. This turbine design offers increased reliability and reduced operating costs because there are less moving parts than traditional turbines.
Located about three miles off the coast of Atlantic City, New Jersey, the turbines will also feature a twisted jack foundation, which offers lower manufacturing and installation costs than traditional turbines. Ironically, the announcement of the funding comes after the organization received some unfortunate news. The Board of Public Utilities, for the second time this year, rejected the organization's proposal for a 25 MW, five-turbine wind farm located nearly three miles off of the Atlantic City coast. Fishermen's Energy vows to continue fighting for approval of the project.
Dominion Virginia Power, a subsidiary of Dominion Power (NYSE:D) is another organization set to receive federal funding. Installing two 6-MW, direct-drive turbines approximately 26 miles off of the coast of Virginia Beach, Virginia, the turbines, like the ones from Fishermen's Energy, will feature twisted jack foundations. The utility has demonstrated interest in other offshore wind projects besides this. Dominion won a lease from the Bureau of Ocean Energy Management last September for 112,799 acres off of Virginia's shores.
Dominion Power does not have a substantial amount of wind power capacity in its portfolio of power projects. One project in which it is vested is the West Virginia Wind Facility, a 264-MW, 132-turbine project located along 12 miles of the Allegheny Front. Dominion owns 50% of the project.
One other project Dominion Power is involved with is the Fowler I Wind Farm, located about 90 miles northwest of Indianapolis. With a capacity near 400 MW, the facility is jointly owned by Dominion Power and BP Wind Energy. Vestas contributed 182 turbines to the project.
A third winner of federal funding is Principle Power. Planning to install five 6 MW direct-drive turbines about 18 miles off of the coast of Coos Bay, Oregon, Principle Power's project will feature the WindFloat semi-submersible floating foundation. With lower costs by simplifying installation, the foundation design doesn't require the assistance of highly specialized ships.
Installing the turbines in water with a depth of over 1,000 feet, Principle Power has a lot riding on this project, which, should it be successful, would be tremendously important to the further development of offshore wind projects in the United States. The Department of Energy estimates that more than 60% of the United States' offshore wind resources are located in deep water.
Outside of the U.S., Principle Power has deployed a prototype of its WindFloat technology in Portugal. Following a successful demonstration, Principle Power is attempting to secure funding for Phase II of the project, which will expand capacity to 25 MW by 2016.
Foolish final thoughts
Located throughout Europe, offshore wind farms have proven to be a viable source of power. Since the U.S. has no offshore wind projects operating, it needs to play quite a bit of catch-up in order to compete with Europe. Almost daily, though, there are developments that further suggest it won't be long before Americans look to the ocean and see turbines spinning.
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Scott Levine has no position in any stocks mentioned. The Motley Fool recommends Dominion Resources. 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.