U.S. cuts red tape on offshore renewable energy

By Tom Doggett

WASHINGTON (Reuters) - With the aim of ending a regulatory turf war, U.S. government agencies on Tuesday said they would work together to cut red tape and spur development of offshore renewable energy projects.

Under the agreement, the Interior Department will have jurisdiction over offshore wind and solar energy projects, while the Federal Energy Regulatory Commission will oversee offshore projects that generate electricity from wave and tidal currents.

"This agreement will help sweep aside red tape ... our renewable energy is too important for bureaucratic turf battles to slow down our progress," said Interior Secretary Ken Salazar.

President Barrack Obama has made developing alternative energy sources a centerpiece of his new administration, but he needs cooperation among a host of agencies to spur development and reach the goal of doubling renewable energy production over the next three years.

Acting FERC Chairman Jon Wellinghoff said the permitting procedures forged between the two agencies "will help get renewable energy projects off the drawing board and onto the Outer Continental Shelf."

Staff at both agencies have been directed to develop a memorandum of understanding that formally spells out the process for issuing permits and licenses for offshore renewable energy projects.

Denise Bode, chief executive of the American Wind Energy Association, said the new agreement "is a welcome sign that some of the bureaucratic obstacles to offshore wind will soon be removed."

She also said it shows the Obama administration "is ready to back up its commitment" to boost renewable energy output.

FERC Commissioner Philip Moeller told a Senate Energy Committee hearing on Tuesday the agency had begun to receive applications for preliminary permits and licenses for so-called hydrokinetic projects, which generate electricity through the motion of waves or the flow of tides, ocean currents or inland waterways.

FERC has issued some 170 preliminary permits for 10,000 megawatts of potential power generation from offshore projects, according to Moeller.

One of those is Ocean Power Technologies' project off the Oregon coast, which will create a 1.5 megawatt power station to supply electricity to about 2,500 homes.

The project would have 10 buoys with pistons in a cylinder to slide up and down as the buoys move over waves in the water, generating electricity in the process. An underwater cable would then transmit the power.

Separately, the California Public Utilities Commission gave initial approval in January for PG&E Corp to initially spend $2 million on its planned ConnectWave demonstration project, which eventually could produce 40 megawatts of electricity.

Salazar told the committee the Interior Department was "very ready to move" on offshore wind energy projects.

He said the department would make a final decision "in the next several months" on whether to give final approval to the controversial Cape Wind project off the coast of Massachusetts, which aims to provide power for 400,000 homes.