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Delaware signed an agreement this week with the offshore wind energy company US Wind worth about $128 million, which includes lease payments, community benefits, upgrades to the state’s grid and renewable energy credits. The deal is in exchange for infrastructure needed to transport the energy onshore through Delaware waters and state park land.

The company plans two projects off the Delmarva Peninsula that will provide Maryland ratepayers with renewable energy. The first of which, dubbed MarWin, would construct 21 turbines to generate 300 megawatts of electricity, enough to power 92,000 homes. The second, Momentum Wind, would include an additional 55 turbines churning out 800 megawatts of power, enough to light up 250,000 homes.

The company has leased about 80,000 acres in federal waters off Ocean City, Maryland. If fully developed, it says the site could generate close to two gigawatts of wind energy, or enough to power 600,000 to 700,000 homes. The deal with Delaware comes after the final permits from the Department of Interior were granted to the projects in December and a year after the state began negotiating with the company. 

“With the recent federal and state project approvals, we are ready to reap the environmental, health, workforce, energy cost and community benefits from this needed transition to renewable energy,” said then-Gov. John Carney in a statement on Monday, his last day in office. “Delawareans will benefit in numerous ways from this important agreement.”

While the contract for the offshore wind energy is with the state of Maryland, the project plans to plug into the grid at the Indian River Power plant, a former coal burning station, in Dagsboro, Sussex County, Delaware. Underground cables would connect the turbines beneath Delaware state waters and wetlands, including Indian River Bay and 3R’s Beach at Delaware Seashore State Park.

US Wind will pay the state $12 million for the lease of the land needed to bury the transmission cables over the course of 20 years. The company will also provide 150,000 renewable energy credits annually, which are estimated at $76 million for 20 years, to Delaware’s utilities to help meet new clean energy requirements. Delaware says this will help lower electricity bills.

The company will also provide $40 million for community benefits, including coastal dredging, clean energy workforce training, scholarships and improvements to state parks, along with another $200 million to upgrade the state’s electrical grid.

“I think these upgrades will be much needed and well received,” said Nancy Sopko, vice president of external affairs at US Wind. “It just creates a much stronger and more reliable grid. And that’s something that we’re going to need more and more given the surging demand for electricity in the region.”

Despite strong backing by the state, the project is controversial with some saying it will harm tourism, marine mammals and fisheries. In December, the Sussex County Council voted down a request from Renewable Development, a subsidiary of US Wind, to construct the necessary substation at the former coal plant in Dagsboro.

US Wind has filed an appeal in Delaware Superior Court.

“We think the law is on our side and we’re confident that the county’s decision will not stand,” said Sopko.

Sopko said final federal permits from the U.S. Army Corps of Engineers are expected this month. Although President-elect Donald Trump has promised to eliminate offshore wind projects, Sopko said this project would not be impacted by a change in administration.

“We feel very confident that we’re securing all our federal permits in the time that we need,” said Sopko. The plan is to have the offshore wind farm come online in 2028 with construction beginning in 2026.