With the aim of ending a regulatory turf war, U.S. government agencies on Tuesday said they would work together to cut red tape and spur development of offshore renewable energy projects.

Under the agreement, the Interior Department will have jurisdiction over offshore wind and solar energy projects, while the Federal Energy Regulatory Commission will oversee offshore projects that generate electricity from wave and tidal currents.

This agreement will help sweep aside red tape ... our renewable energy is too important for bureaucratic turf battles to slow down our progress, said Interior Secretary Ken Salazar.

President Barrack Obama has made developing alternative energy sources a centerpiece of his new administration, but he needs cooperation among a host of agencies to spur development and reach the goal of doubling renewable energy production over the next three years.

Acting FERC Chairman Jon Wellinghoff said the permitting procedures forged between the two agencies will help get renewable energy projects off the drawing board and onto the Outer Continental Shelf.

Staff at both agencies have been directed to develop a memorandum of understanding that formally spells out the process for issuing permits and licenses for offshore renewable energy projects.

Denise Bode, chief executive of the American Wind Energy Association, said the new agreement is a welcome sign that some of the bureaucratic obstacles to offshore wind will soon be removed.

She also said it shows the Obama administration is ready to back up its commitment to boost renewable energy output.

FERC Commissioner Philip Moeller told a Senate Energy Committee hearing on Tuesday the agency had begun to receive applications for preliminary permits and licenses for so-called hydrokinetic projects, which generate electricity through the motion of waves or the flow of tides, ocean currents or inland waterways.

FERC has issued some 170 preliminary permits for 10,000 megawatts of potential power generation from offshore projects, according to Moeller.

One of those is Ocean Power Technologies' project off the Oregon coast, which will create a 1.5 megawatt power station to supply electricity to about 2,500 homes.

The project would have 10 buoys with pistons in a cylinder to slide up and down as the buoys move over waves in the water, generating electricity in the process. An underwater cable would then transmit the power.

Separately, the California Public Utilities Commission gave initial approval in January for PG&E Corp to initially spend $2 million on its planned ConnectWave demonstration project, which eventually could produce 40 megawatts of electricity.

Salazar told the committee the Interior Department was very ready to move on offshore wind energy projects.

He said the department would make a final decision in the next several months on whether to give final approval to the controversial Cape Wind project off the coast of Massachusetts, which aims to provide power for 400,000 homes.

With an estimated price tag of more than $1 billion, Cape Wind would consist of 130 wind turbines over 24 square miles (62 sq km) in Nantucket Sound, within view of popular Cape Cod resorts.

The project won a favorable environmental review from the department in January, but it faces stiff opposition from business leaders and politicians, including Senator Edward Kennedy.

Cape Wind's turbines would stand about 440 feet above the surface of the water at the tip of the blade. Opponents say the turbines would be unsightly and threaten the area's tourist industry around Cape Cod, Martha's Vineyard and Nantucket.

Supporters of the project, including Massachusetts Governor Deval Patrick and many environmental groups, said it would create needed jobs and cut air pollution and greenhouse gas emissions.

(Additional reporting by Ayesha Rascoe; Editing by Russell Blinch and Marguerita Choy)

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