U.S. signs lease for first major offshore wind farm

ATLANTIC CITY, New Jersey Wed Oct 6, 2010 12:03pm EDT

A power-generating windmill turbine operates in a wind farm on Backbone Mountain near Thomas, West Virginia August 28, 2006. REUTERS/Jonathan Ernst

A power-generating windmill turbine operates in a wind farm on Backbone Mountain near Thomas, West Virginia August 28, 2006.

Credit: Reuters/Jonathan Ernst

ATLANTIC CITY, New Jersey (Reuters) - U.S. Interior Secretary Ken Salazar on Wednesday formally signed the nation's first lease for a major offshore wind project, as the Obama administration pushes forward to boost renewable energy output.

The lease for the controversial $1 billion Cape Wind wind farm off the coast of Massachusetts officially ends a nine-year regulatory process for the project.

"Our responsibility now is to take the lessons learned from that process - and from the growing pool of experiences with offshore wind development around the globe - and build a smart U.S. program," Salazar said at an offshore wind energy conference in Atlantic City, New Jersey.

The Obama administration has made renewable energy a top priority, pouring billions of dollars into the green energy sector through its stimulus package in an effort to create jobs and reduce U.S. dependence on fossil fuels.

But with the failure of the Senate to pass a comprehensive climate change package this year, the White House has pledged to renew its focus on energy policy in 2011.

The approval of the Cape Wind lease follows two high profile announcements on solar energy this week.

On Tuesday, the Obama administration unveiled plans to place solar panels on the White House for the first time since the 1980s. The solar panels, expected to be installed some time next summer, will turn sunlight into electricity and save about $3,000 a year in fuel bills.

The Interior Department also awarded the nation's first federal licenses for solar plants to operate on public land. NTR's Tessera Solar received approval for a 709-megawatt plant and Chevron Corp's Chevron Energy Solutions won approval for its 45-megawatt plant.

Tessera's plant should be able to power at least 212,000 homes once its operating, while the Chevron plant would generate enough power for at least 13,500 homes. Both plants are located in California.

Salazar said similar approvals are on the way as the department fast tracks certain solar projects.

Calling the Cape Wind project a "pioneer" in its field, Salazar promised his department would also cut down on offshore wind project approval times by identifying high priority leasing areas and providing companies with more guidance on environmental projects.

Ramping up U.S. offshore wind development could be a major boon for turbine makers such as General Electric Co, Vestas Wind Systems A/S and Siemens AG.

A study released by ocean conservation group, Oceana in September found offshore wind energy has the potential to meet up to half of the current electricity demand of the densely populated East Coast.

Cape Wind, which will provide electricity to about 400,000 homes, faced stiff opposition from wealthy home and business owners on the coast of Cape Cod as well as local native tribes, who argued the tall wind turbines would sully their coastal views.

The project had a major breakthrough when Interior finally green lighted the wind farm earlier this year.

(Reporting by Ayesha Rascoe;editing by Sofina Mirza-Reid)