Offshore wind measure vies with other bond proposals in California

California lawmakers are lining up statewide bond proposals ahead of the presidential election in November.

The latest is a $1 billion bond measure introduced by Assemblymember Rick Chavez Zbur, D-Los Angeles, in Assembly Bill 2208 to build out the ports to support offshore wind projects to generate electricity.

Others include broad $16 billion climate bond measures covering water, drought, and wildfire proposed by Assemblymember Eduardo Garcia, D-Coachella, in AB1567 and Senate Bill 867 by Sen. Ben Allen, D-Santa Monica.

They could also compete for voter attention with Assembly Bill 247, a $14 billion state bond measure for school construction and maintenance. And there has been talk of an affordable housing bond.

“What goes on the ballot is still in the decision-making process that will be determined by what the Legislature decides and the governor signs,” Zbur said. “There is no certainty as to what amounts any of those bond proposals (headed for the November ballot) would be. There is support in the Legislature and the governor’s office for a meaningful climate bond and education bond, and there is support in some quarters for a housing bond. The mental health bond was approved last year.”

A $6.4 billion bond measure to fund housing and services for mentally ill people, spearheaded by Gov. Gavin Newsom, stands alone on the March primary ballot

Zbur and his co-authors are speaking with the authors of the climate change bills about the possibility of the $1 billion for port improvements for offshore wind energy development being incorporated into that bill.

What is certain, according to Zbur, is that the ports are going to need funding to pay for improvements to usher in the age of offshore wind-generated power in California. The towering size of the 900 to 1,100-foot tall offshore wind turbines means they need the space to be assembled and port capacity to move them offshore, he said.

Offshore wind is an essential part of the strategy to help California meet its goal of using 100% renewable energy to power the grid by 2050, according to Zbur and the co-authors of AB 2208, Assembly Speaker Pro-Tempore Jim Wood, D-Healdsburg, and Assemblymember Josh Lowenthal, D-Long Beach.

The bond would provide just a fraction of the $11 billion to $12 billion the California Energy Commission estimates is needed to prepare the ports of Long Beach and Humboldt Bay, Zbur said. Approval of the bond measure would signal the state’s commitment to offshore wind and catalyze strategies for the public and private investment that will be required to fully fund the projects, he said.

“I care about climate change and this is a big component of what we need to do to meet the goals in the climate action scoping plan,” Zbur said, adding that the state must double or triple its renewable electricity supply to meet them.

“California will not meet its ambitious climate goals without offshore wind, and we need to invest in our ports to make offshore wind a reality,” Zbur said.

Offshore wind is an important part of the strategy, not only because the amount of power it could generate, but also because the time of day it generates power is complimentary to existing sources of power, he said.

Offshore wind farms are considered more efficient than onshore wind farms, because higher speeds and consistency in direction means they require fewer turbines to produce the same amount of energy as onshore wind farms, according to an explainer on nationalgrid.com. In onshore wind’s favor, it’s easier, quicker and cheaper to install than offshore, according to the industry organization.

In January, the federal Department of Transportation awarded a $427 million INFRA grant to Humboldt Bay Harbor, Recreation and Conservation District to build a marine terminal to support construction and maintenance of offshore wind turbines. The federal government also leased 538 square miles of ocean waters about 20 miles off Humboldt Bay on California’s northern coast and Morro Bay on the central coast to five energy companies.

RWE Offshore Wind Holdings, LLC and California Floating LLC were awarded leases to build in Humboldt and Equinor Wind US, LLC, Golden State Wind LLC and Invenergy California Offshore attained leases for Morro Bay.

The state is anticipating offshore wind from leased federal waters would supply 25 gigawatts of electricity by 2045, enough to power roughly 25 million homes and provide about 13% of the power supply. This electric source is key to the state’s goal of net-zero emissions, because wind turbines can supply power to the grid after the sun sets and solar power generation drops, according to the California Energy Commission strategic plan.

“The cost of improving our ports to enable them to assemble these massive turbines is a multibillion-dollar effort,” Zbur said. “This $1 billion bond sends the signal that the state is committed to offshore wind and seeks to spur the public and private investment necessary to fund these port improvements fully.”

The Biden administration has a goal of powering 10 million homes through ocean-based turbines by 2030 with the aim of establishing a carbon-free electric grid by 2035. The Inflation Reduction Act, in an effort to incentivize carbon-free electricity generation, included an investment tax credit of 30%.

Offshore wind development has experienced rough seas on the East Coast, where developers canceled several projects this fall.

Danish wind energy developer Orsted scrapped its Ocean Wind I and II projects off southern New Jersey in November citing problems with supply chains, higher interest rates and a failure to obtain the amount of tax credits the company wanted. Those projects were expected to produce 2.2 gigawatts of power.

New England offshore wind developers canceled power contacts for three projects that would have provided another 3.2 gigawatts of wind power to Massachusetts and Connecticut.

On the other hand, as part of a joint venture with Eversource, Orsted contributed $577,500 in seed money to the Connecticut Wind Collaborative to fund Revolution Wind, Connecticut and Rhode Island’s first utility-scale offshore wind farm.

“There are a lot of variables at play,” said Joseph Kane, a fellow at the Brookings Institution who specializes in infrastructure issues. “Orsted pulling out of the New Jersey projects can lead to fears about offshore projects, and those concerns remain. The math has to pencil out through a combination of federal and state funding, not to mention the nascent record of these projects.”

Though dozens of projects are in the works in the U.S., so far only two are complete, a five-turbine wind farm on Rhode Island’s Block Island that was built in 2016 and a two-turbine pilot project 27 miles out from Virginia Beach that started generating power in 2020. Dominion Energy plans to begin construction this year and complete by 2026 a 2.6-gigawatt offshore wind project 27 miles off the coast of Virginia Beach that will power 660,000 homes.

The erosion of some of the East Coast projects is one reason Environment California, the bill’s sponsor, considers the $1 billion bond measure for the port improvements to be so important, said Laura Deehan, the environmental advocacy group’s state director.

“It’s a brand new endeavor for California and none of our ports are ready to do this kind of work,” Deehan said. “We have to do major upgrades.”

If lawmakers get the measure on the ballot, it looks likely that voters will support it, given that more than 80% of voters liked the idea of offshore wind, according to a Public Policy Institute of California poll, Deehan said.

Deehan added that the projects that fell off on the East Coast were more affected by inflation and rising costs, because the companies put in the bids on those leases before the pandemic, when prices were lower.

“We have talked to the companies who bid on the leases for the offshore wind projects in California, and they have assured us they aren’t as concerned,” Deehan said.