Published: 02 November 2005 02 November 2005
The state of Texas (USA) has signed an agreement to allow the first offshore wind energy project in the USA to be built off Galveston Island. The multi-million dollar lease, signed with Galveston-Offshore Wind, LLC, allows work to begin immediately on the construction of two meteorological towers. Galveston-Offshore Wind is a division of Louisiana-based Wind Energy Systems Technologies (WEST, LLC). WEST has agreed to put up its own money to test the Gulf waters in this three-phase lease agreement. During the first phase of the lease, WEST will spend US$ 3 to 5 million to build and operate two 80-metre meteorological towers designed to collect wind data in the Gulf of Mexico. WEST will also pay the state a lease rent of US$ 10,000 a year, every year, until actual wind energy production begins.
Once the research is complete, the second phase of the lease, the construction phase, will begin. Construction is expected to cost as much as US$ 300 million and could take as long as five years. WEST plans to build a field of about 50 wind turbines to produce an expected 150MW. The hub of each turbine will rise 260 feet (about 80 metres) above sea level. The turbine blades will be up to 55 yards (about 50 metres) long, giving each turbine a diameter approximately the length of a football field. Once construction is complete, the 30-year production phase will begin. The lease royalty structure is designed to encourage early production of energy and will create an entirely new stream of revenue from state-owned, submerged lands. For the first eight years of production, WEST will pay the Land Office a 3.5% royalty from the wind energy development’s total production. Years 9 through 16 of the 30-year lease will earn the state a 4.5% royalty. Years 17 through 30 will earn a 5.5% royalty.