Interior department opens U.S. Atlantic coast for windmills

The Atlantic coast, or at least parts of it, will soon be dotted with windmills.

The Obama administration launched Friday an effort to lease more than a quarter of a million acres in federal waters off Virginia, Rhode Island, and Massachusetts for wind energy production. It is the U.S. government's first-ever lease of rights to use the outer continental shelf as a site for production of renewable energy.

Interior secretary Ken Salazar explained that the lease, which will affect about 278,000 acres, is part of the administration's commitment to an "all of the above" energy strategy.

"Wind energy along the Atlantic holds enormous potential, and today we are moving closer to tapping into this massive domestic energy resource to create jobs, increase our energy security, and strengthen our nation's competitiveness in this new energy frontier," Salazar said in a statement.

The 432 square miles covered by the leases are expected to produce a fraction of the power potential of wind along the eastern seaboard. According to a 2010 report produced by the environmental advocacy organization Oceana, wind power generated off the Atlantic coast could supply almost half of the electricity needed by 11 states in the region.

The economic benefits may be substantial, too. The Oceana report projected that production of the same quantity of power as is generated by wind in Europe would cost about $36 billion less than reliance on fossil fuels while generating between 133,000 and 212,000 jobs.

The U.S. government is not as sanguine about the advantages of wind energy, but nevertheless predicts significant benefits.

The major obstacle to increasing electricity production from wind energy is high capital costs. In fact, according to the U.S. Energy Information Administration, a wind power facility's levelized cost of electricity is higher than that of a plant that burns fossil fuels.

The capital costs are higher for an offshore wind energy production plant than for a similar facility built on land.

Friday's auction covers an area of about 164,750 acres off the Massachusetts and Rhode Island coasts and another area of about 112,800 acres.

The areas leased off the coasts of Massachusetts and Rhode Island are about ten miles out to sea and are expected to produce enough electricity for 700,000 homes, The area leased off the Virginia coast, which will be developed about 23 nautical miles away from the shore, is expected to generate a similar amount of power.

The U.S. was, as of 2009, the world's leading producer of wind energy. However, the country produced only two percent of its electricity from that source during 2009, making it a distant follower of Denmark, Portugal, Spain, Ireland, and Germany. Each of those nations obtained at least seven percent of their domestic electricity needs from wind turbines.

Legislation enacted in 2005 authorizes the Interior department's Bureau of Ocean Energy Management to lease offshore waters for renewable energy production.

The Interior department will award the leases in 2013.