By Margaret M. Welsh
Last month, Maryland Governor, Martin O’Malley reintroduced state legislation to promote offshore wind power in Maryland. The Maryland Offshore Wind Energy Act of 2012 is an updated version of his 2011 bill. This bill now establishes an offshore wind renewable energy credit (“OREC”) system, similar to the system enacted in New Jersey last summer by Governor Chris Christie.
Under the OREC model, one renewable energy credit is equivalent to a certain amount of kilowatt hours of clean electricity generated. The credits are then sold in advance to electricity suppliers to help them meet the renewable energy portfolio requirements of the state. The OREC system potentially establishes a commodities market for wind farm electricity to be sold at competitive prices. Industry specialists suggest that a credit could be contracted for approximately $300, similar to the price for a solar energy credit.
In 2008, Maryland committed to a Renewable Portfolio Standard which required twenty percent of electricity purchased by suppliers to be from renewable energy sources by 2022. The OREC system established in the Maryland Offshore Wind Energy Act of 2012 creates a carve-out within Maryland’s existing Renewable Portfolio Standard. Thus, electricity supplies could buy a specific number of ORECs annually to meet Maryland’s required portion of renewable energy.
The OREC model provides upfront capital for offshore wind. Thus, proponents of the 2012 Act suggest that the OREC system could help to facilitate new offshore wind turbine construction and create jobs. Stay tuned for our upcoming series on renewable energy initiatives of states in the MidAtlantic Region.