The Biden administration on Friday launched new guidelines that can make it simpler for offshore wind builders to assert a subsidy for services deliberate in areas which have traditionally relied on fossil gasoline industries for employment.
The revision follows almost a yr of warnings by offshore wind firms that their tasks won’t transfer ahead with out entry to sure subsidies in President Joe Biden’s landmark local weather change regulation, the Inflation Reduction Act.
Offshore wind is a crucial a part of Biden’s plan to decarbonize the U.S. energy grid and fight local weather change, however tasks have struggled resulting from hovering prices tied to inflation and better rates of interest and provide chain snags.
In an announcement, the Treasury Department mentioned it will now permit an offshore wind challenge to assert a tax credit score for siting in low-income communities if supervisory management and information acquisition (SCADA) gear is positioned in such an space. SCADA techniques are used to regulate crucial infrastructure.
The power communities tax credit score is price 10% of a challenge’s price and might be claimed on high of the IRA’s base 30% credit score for renewable power tasks.
The credit score for siting tasks in “energy communities,” outlined as areas which have important employment or tax revenues from fossil gasoline industries and excessive unemployment, had been dictated by the place a challenge connects to an onshore substation.
“This change reflects the fact that onshore SCADA equipment at ports is critical to offshore wind projects and that offshore wind projects make significant investments and create jobs at these ports over the duration of projects, which is the goal of the energy communities bonus,” Treasury mentioned in an announcement.
The guidelines additionally make clear that tasks with a number of factors of interconnection might embrace any land-based energy conditioning gear to find out their eligibility for the bonus.
An business group praised the change.
“In a move to bolster the transition from fossil fuel to clean energy, the eligibility expansion for the 10% Energy Communities credit creates an easier path to market for many offshore wind projects,” Liz Burdock, CEO of Oceantic Network, mentioned in an announcement.
(Reuters – Reporting by Nichola Groom; Editing by Franklin Paul and Leslie Adler)
