Washington, D.C. – With America’s first-ever offshore wind farm completed off the coast of Rhode Island, U.S. Senators Jack Reed (D-RI) and Sheldon Whitehouse (D-RI) are teaming up with Tom Carper (D-DE), Susan Collins (R-ME), and several of their colleagues in introducing the Incentivizing Offshore Wind Power Act. This bipartisan legislation would provide critical financial incentives to spur more investment in offshore wind energy. The bill would create an investment tax credit that is redeemable for the first 3,000 megawatts of offshore wind facilities placed into service, amounting to approximately new 600 wind turbines.
In the past, Congress has offered a temporary credit for investments in wind power, but the last extension of this credit will expire before December 31, 2019. This credit has been a lifeline to the nascent offshore wind industry. The Incentivizing Offshore Wind Power Act would give the industry the certainty needed to plan investments and maximize deployment of this clean power technology.
“Offshore wind power has the potential to power homes, businesses, and our energy future. Rhode Island is a national leader when it comes to harnessing the potential of offshore wind energy. Wind turbines off the coast of Block Island are now spinning and have replaced old, inefficient diesel generators from the 1920s as a primary source of power. If we make smart investments in offshore wind power, we can help reduce our dependency on foreign oil while lowering energy costs for consumers and businesses,” said Senator Reed. “Other nations are powering ahead with renewable, offshore wind projects and the U.S. can’t afford to fall behind. This legislation would provide incentives to help American companies compete on the world stage. It would help create more good-paying, green jobs here at home while providing clean, renewable energy, and allowing more states to follow the offshore wind model we’ve put in place in Rhode Island.”
“Rhode Island is home to America’s first offshore wind farm, which is powering neighborhoods and businesses with clean, reliable energy,” said Senator Whitehouse. “This bill will encourage states up and down the coasts of the United States and in the Great Lakes to follow Rhode Island’s example, and will position offshore wind as the next frontier in renewable energy.”
The legislation defines offshore facilities as any facility located in the inland navigable waters of the United States, including the Great Lakes, or in the coastal waters of the United States, including the territorial seas of the United States, the exclusive economic zone of United States, and the outer Continental Shelf of the United States.
Recent studies estimate that the Atlantic coast holds 330 gigawatts of offshore wind power – enough to meet all electricity needs of the East Coast. The expansion of America’s offshore wind industry would provide not only an opportunity to protect the environment and grow the nation’s economy, but it would also create large scores of new jobs for people living in areas near the coast. The senators also note that offshore wind projects can create good-paying domestic jobs. European nations have seen over 50 offshore wind projects deployed since 1991—with some offshore wind projects creating up to 1,500 jobs in construction and operation and maintenance alone.
In addition to Reed, Whitehouse, Carper, and Collins, the bill is cosponsored by U.S. Senators Sherrod Brown (D-OH), Ben Cardin (D-MD), Chris Coons (D-DE), Angus King (I-ME), Robert Menendez (D-NJ), Edward Markey (D-MA), Brian Schatz (D-HI), and Elizabeth Warren (D-MA).
Summary: The Incentivizing Offshore Wind Power Act
In order to recognize the longer start-up time for offshore wind facilities as compared to onshore wind facilities, this legislation amends Section 48 of the tax code by creating an investment offshore wind tax credit for the first 3,000 MW offshore wind facilities placed into service. The legislation would:
- Require the Secretary of Treasury to consult with the Secretaries of Energy and Interior when establishing the credit;
- Provide a 30 percent tax credit on the investment in offshore wind for the first 3,000 MW generated;
- Give Treasury the authority to make the final decision on who is awarded the tax credit. Once a credit is awarded, companies would have five years to install the wind facility;
- Prohibit companies from receiving other production or investment tax credits in addition to the offshore wind investment tax credit created under the bill; and
- Define offshore facility as any facility located in the inland navigable waters of the United States, including the Great Lakes, or in the coastal waters of the United States, including the territorial seas of the United States, the exclusive economic zone of United States, and the outer Continental Shelf of the United States.
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