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O’Malley proposal builds on effort to create wind market

Nicholas Sohr//Daily Record Business Writer//February 23, 2011

O’Malley proposal builds on effort to create wind market

By Nicholas Sohr

//Daily Record Business Writer

//February 23, 2011

ANNAPOLIS — Gov. Martin O’Malley has proposed legislation that would allow the state to lure wind turbine manufacturers to Maryland with economic development incentives up to $50 million.

The proposal builds on the governor’s effort to create a wind energy market in Maryland. Another set of bills pushed by his office would require utility companies to enter into long-term contracts to buy wind energy produced off the state’s coast.

“There’s going to be winners and losers in the green economy,” said Del. Justin D. Ross, a Prince George’s County Democrat who signed on to the governor’s proposal. “This bill will help Maryland be a winner, and attract the type of businesses that are already around now, and will be in the future.”

O’Malley’s legislation, HB 1227 and SB 881, would allow the governor to propose loans or grants from the state’s Sunny Day Fund, a pot of money the state uses for “extraordinary economic development opportunities” that create jobs and spark capital investment.

The Department of Business and Economic Development proposed last year to use $13 million in Sunny Day money over five years as part of the unsuccessful $22.5 million state and Montgomery County offer to woo Northrop Grumman Corp.

The turbine manufacturer incentives would be built into the governor’s annual budget proposal and vetted and voted on by the General Assembly. Private investment by the recipients would have to be twice the state’s outlay, which would be capped at $50 million per project.

“If it is a smaller piece along the supply chain, I don’t think it would get anywhere close to that,” said the governor’s energy advisor, Abigail Hopper.

O’Malley had considered a tax credit program for manufacturers.

“We heard that tax credits aren’t the most useful recruitment tool,” Hopper said. The proposed program “is much more flexible.”

O’Malley’s legislation that would force utilities to buy wind power would require between 400 and 600 megawatts of production capacity off the coast. Each offshore wind turbine generates 3.5 megawatts and costs $5 million to $7 million, according to the Offshore Wind Development Coalition, a lobbying group supported by seven wind power developers. To hit 600 megawatts, developers would need 171 turbines, with a price tag between $855 million and $1.2 billion.

The state expects that much development would support about 2,000 construction and manufacturing jobs and 400 maintenance and upkeep jobs after that.

Supporters of O’Malley’s proposal tout the state’s geography and the sea and rail shipping infrastructure as a selling point for wind power manufacturers. Existing American firms that build parts for land-based turbines will have to retool to take on offshore turbines, which must be protected from the corrosive salt in the air and water.

Federal regulators have designated 207 nautical square miles off the coast for wind-power generation, and the state expects to see the first turbines spinning in 2016.

According to the wind developers group, eight companies have submitted project proposals for Maryland’s waters.


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