The Environmental Business Council recently hosted its 11th Annual Offshore Wind Conference, where clean energy leaders including developers, consultants, and permitting attorneys from around the Northeast convened to celebrate the accomplishments of offshore wind, learn from recent projects, and discuss the challenges and changes facing the industry. Our attorneys attended the event and share the key takeaways here.

Takeaway No. 1: Bringing utility-scale offshore wind power online is a marathon, not a sprint.

After more than a decade of advising offshore wind projects through the legal and regulatory processes in Rhode Island, Massachusetts, and New York, including many years ago with the Block Island Wind Farm (BIWF), Hinckley Allen can confirm what so many at the Offshore Wind Conference repeated: Bringing utility-scale offshore wind power online is a marathon, not a sprint—and it is well worth the wait.  BIWF has been operational since 2016, generating enough to power 17,000 households in Rhode Island. South Fork Wind is in the final stages of construction, will be operational this year, and will bring clean energy to 70,000 homes on Long Island, and Revolution Wind, which is currently under construction, will bring clean energy to approximately 350,000 homes in Connecticut and Rhode Island. All of these projects went through multi-year development and permitting processes.

Takeaway No. 2: The permitting process is changing.

Offshore wind projects must overcome complex issues at all levels of local, state, and federal government. Obtaining permits from dozens of different agencies is time-consuming, expensive, and can be a deterrent to developers. Now, however, it sounds like changes are on the horizon—and whether they will simplify or complicate the permitting process for offshore wind projects, remains to be seen.

Some conference speakers suggested that 2024 could bring changes to the Federal Consistency process under the federal Coastal Zone Management Act, a hurdle for offshore wind developers to overcome. While no specifics were shared, it seems these changes may alter the timeline of the federal consistency process. Hinckley Allen regularly monitors many different outlets that discuss and announce these kinds of proposed changes and is prepared to advise on any new or proposed rules as they become public.

Takeaway No. 3: The industry needs clarification about what projects or parts of projects are eligible for energy investment tax credits.

Building on momentum from the permitting reforms proposed in the Fiscal Responsibility Act of 2023, the U.S. Department of Treasury and Internal Revenue Service (IRS) released new guidance in November 2023 for the Business Energy Incentive Tax Credit (ITC). The ITC is a one-time, federal income tax credit for capital investments in renewable energy projects based on the dollar amount of the investment, which is earned when the equipment is placed into service. Under the current rule, offshore wind projects that begin construction by December 31, 2024 may receive certain tax credits.

However, the question remains exactly which parts of a wind project qualify for this tax credit. A cohort of states have submitted a request for further clarification to the IRS on this issue. Hinckley Allen follows these discussions closely and can provide further information about the IRS’s responses and any related developments in this area.

Takeaway No. 4: Regionalizing the supply chain and labor force serving offshore wind projects.

To meet the Biden Administration’s ambitious goal of delivering 30 GW of offshore wind energy to the United States by 2030, the industry must overcome significant gaps in its supply chain and its domestic labor force. As speakers at the conference emphasized, the industry is mature enough to benefit from regional collaboration and it is no longer efficient for projects to be competing against each other for supplies or labor.

To meet the moment, states and federal agencies have entered into various Memoranda of Understanding with the goal of creating an efficient, sustainable supply chain that serves the offshore wind energy for the entire region.

It remains to be seen how the procurement process, supply chain, and workforce will evolve in response to these memoranda and future government incentive programs.