California community-choice aggregator Monterey Bay Community Power has signed a memorandum of understanding to explore buying the power from a 1,000-megawatt floating offshore wind farm.

It’s an early, if no-stakes, claim to what could be a massive offshore wind opportunity set to open via federal offshore lease auction next year, assuming floating wind turbine technology can meet the tests of wind, waves and California’s energy markets.  

This week’s MOU, which is not a binding contract, calls for a long-term power-purchase agreement between Monterey Bay Community Power and Castle Wind LLC, a joint venture of EnBW North America and Trident Winds Inc. The power is to be delivered by 2025 from the Castle Wind Offshore project, which would consist of around 100 wind turbines held upright by floating substructures anchored to the ocean floor 30 miles off California’s Central Coast. 

It’s the most public step yet by one of the more than a dozen developers that are reportedly eyeing California’s offshore wind potential, including Avangrid Renewables, EDF, EDP, E.ON and Equinor. The federal Bureau of Ocean Energy Management is planning to hold an auction in 2020 for leases off California’s coastline.

Castle Wind’s interest in the project dates back to 2015, when it first submitted a lease request for the federally regulated stretch of ocean floor west of Morro Bay, Calif. As we reported last week, EnBW has major stakes in U.S. offshore wind, despite being left on the sidelines in December's BOEM auction. 

Morro Bay hosts a now-closed power plant, with the associated high-voltage transmission infrastructure needed to carry the project’s power to shore. And it’s also near the Diablo Canyon nuclear plant, California’s last, which is set to close by 2025, removing about 2.2 gigawatts of baseload power from the region’s grid.

It's worth noting that floating wind turbines have yet to prove themselves at gigawatt scale. But the first commercial-scale floating wind farm, Statoil’s 30-megawatt Hywind Scotland, has set a strong track record, hitting a remarkable 65 percent capacity factor in its first winter of operations, and landing a first-of-a-kind 20-year PPA with Danske Commodities in June. 

In the long run, floating turbines could drastically expand the ocean territory open to wind power development, while slowly reducing costs to match those of fixed offshore wind by the mid-2020s, according to the Department of Energy. In February, DOE’s ARPA-E agency directed $28 million toward new floating wind technologies, noting that about 60 percent of the country's offshore potential lies in waters more than 200 feet deep. 

Offshore wind would face stiff price competition in California from the state's growing share of solar power, as well as remotely generated onshore wind from other states. But the high capacity factor of turbines spinning far out into the ocean could also help stabilize the state’s electricity supply-demand balance as it seeks to integrate an increasing share of intermittent renewable energy into its grid. 

Monterey Bay Community Power is one of a growing number of CCAs taking over power procurement responsibilities from investor-owned utilities in cities and counties across California, expanding their share of responsibility for the state’s future renewable energy goals. 

Community-choice aggregators are increasing their current 2 gigawatts of renewables under contract by another gigawatt this year, and they are set to hit 10 gigawatts by 2030 — about the amount that California’s integrated resource plan projects will need to match their projected share of the state’s electric customer base.

Monterey Bay Community Power isn’t the only CCA to express a non-binding interest in offshore floating wind. In April 2018, the Redwood Coast Energy Authority announced it had selected a consortium, including floating wind platform developer Principle Power, to explore a 100- to 150-megawatt project off the Humboldt County coast.