In the waters of the Øresund Strait, a narrow passage wedged between Malmö, Sweden, and Copenhagen, 20 200-foot windmills rise off the Danish coast. The decade-old wind farm called Middelgrunden is a striking sight, but hardly an unusual one in Europe. Ten European countries harvest wind energy offshore, with nearly 1,400 ocean-based turbines scattered along the continent’s coastlines able to generate more than 3,800 megawatts of electricity. Denmark supplements its collection of more than 4,000 onshore windmills with 400 more offshore. Together, those mills help the small Scandinavian nation pluck 20 percent of its electricity out of thin air, 5 percent of it off the water.

While Europe’s offshore wind-power industry continues to grow—235 new windmills were installed last year alone—the United States has yet to see the successful construction of a single offshore wind farm along its 12,000-miles of shoreline. The problem isn’t a lack of ambition. Several companies have launched offshore wind projects in the U.S. over the years, only to see those plans stall in the face of litigation, regulation, and financial challenges. One of the first planned projects—a 130-turbine, Nantucket Sound array dubbed Cape Wind, which its backers say would produce enough energy to power 200,000 households—has languished for a decade.

Now, though, developers of offshore wind energy—and the law firms that advise them— say windmills may soon begin to rise along the country’s East Coast. One reason for the newfound optimism: Litigants opposed to Cape Wind’s construction continue to resolve lawsuits against the project’s developers, with the most recent settlement coming late last month.

At the same time, following the 2010 launch of a new federal process aimed at easing the development of offshore projects called Smart from the Start, the Bureau of Ocean Energy Management (BOEM) is evaluating other possible wind farm sites near 10 Atlantic coast states, and the Department of Energy, meanwhile, plans to pour $180 million into smaller, innovative offshore turbine projects over the next six years and hopes to harvest 54 gigawatts of offshore wind energy nationwide by 2030.

Dickstein Shapiro energy partner Richard Lehfeldt, who specializes in electricity industry projects, is among those encouraged about which way the wind is beginning to blow.

“Land-based wind farms are cropping up every week and there’s a large pipeline of additional projects to be built,” Lehfeldt says. Is the offshore wind sector poised to follow suit? “We hope the answer is yes. Look at the potential.”

Dickstein, which advises clients on everything from planning to construction of both onshore and offshore projects, is one of four Am Law 200 firms that belong to the Offshore Wind Development Coalition (the others are Cooley, Holland & Knight, and Orrick, Herrington & Sutcliffe). The trade group, which also includes wind energy developers and suppliers, has been lobbying federal agencies and lawmakers for the past two years to ease the federal regulatory process for offshore facilities.

A variety of players are expected to vie for the opportunity to take advantage of the BOEM–approved Atlantic wind areas. In May the bureau identified a 700,000-acre swath of ocean off Martha’s Vineyard for potential leasing and said 10 companies—ranging from Cape Wind parent Energy Management Inc. and fishing industry consortium Fishermen’s Energy to such veterans of the European market as Iberdola Renewables—have expressed interest in placing turbines there.

To build and operate wind farms in any of the BOEM–approved areas, companies must first bid on leases giving them access to specific sites before submitting concrete plans for what they plan to build. The size of the approved wind area off Martha’s Vineyard makes it possible that more than one developer could win a lease.

Despite the federal government’s fresh fervor for offshore wind, developers must still clear major hurdles to complete such projects. Cost is among the most significant. And because of the expense involved in getting a wind farm up and running—and the challenge of passing that expense on to power buyers—government-backed financial incentives that vary by state and include a soon-to-expire federal tax credit are critical to success. For example, the federal tax credit in question—the Investment Tax Credit, which is due to lapse at the end of the year and was last renewed in 2009 as part of the American Recovery and Reinvestment Act—offers developers a 30 percent tax break.

James Manwell, director of the Wind Energy Center at the University of Massachusetts Amherst, says that if lawmakers fail at least to extend the credit, even the relatively mature onshore wind sector—with a total capacity of 48,600 megawatts nationwide, according to the American Wind Energy Association could “nosedive.” For the fledgling offshore industry, Manwell says, losing that credit could bring progress to a halt.

Jim Lanard, the Offshore Wind Development Coalition’s founder and president, hopes that if the credit isn’t made permanent, that it will at least be kept intact for multiple years. “The challenge for the offshore wind industry,” says Lanard, a former strategic planner at Bluewater Wind and director of wind farm developer Deepwater Wind, “is that we need a longer extension than just one year, since our projects take several years.”

Tom Amis, a Cooley partner and cochair of the firm’s clean energy and technologies group, agrees. “You have to look at this as a very long-term proposition,” says Amis, who has worked in the onshore wind business for more than a decade and the offshore sector since 2007 with such clients as NRG Bluewater Wind, Arcadia, enXco, and Mainstream Renewables. According to Amis, the firm is currently advising companies he declined to identify that are eyeing projects in New Jersey, New York, Delaware, Massachusetts, and Virginia, and is also helping with a proposed offshore wind test center.

Amis’s experience includes acting as Bluewater’s lead lawyer in 2008 when the company secured the first offshore-power purchase agreement in the U.S.—a deal under which Delmarva Power and Light agreed to buy 200 megawatts to be produced by a planned 150-turbine wind farm 13 miles off the Delaware coast. Bluewater wound up pulling out of the project last December after failing to line up the necessary financing, in part, according to company leaders, because of the lack of stable, long-term federal funding and tax incentives. Bluewater’s plans for offshore wind farms are now on hold.

Though the Bluewater project floundered, Cape Wind remains afloat. It has cleared numerous regulatory hurdles—including obtaining the relevant local and state permits, as well as permits from the Environmental Protection Agency, the U.S. Army Corps of Engineers, and the Federal Aviation Administration—amid a welter of criticism and lawsuits by shoreline property owners, trade groups, and Indian tribes.

To fight those battles—and to guide it through the federal environmental review and permitting process—Cape Wind has relied largely on a group of McKenna, Long & Aldridge lawyers, including Frederick Anderson, Geraldine Edens, Daniel Jarcho, Christopher Marraro, and Elisabeth Shu. (The company has turned to Boston-based Keegan Werlin to handle such state and local matters as licensing and deals with public utilities.)

McKenna Long represented Cape Wind Associates in connection with the most recent suit to settle involving the project. The plaintiff in that suit, the Martha’s Vineyard/Dukes County Fisherman’s Association, announced on June 26 that it would drop a federal complaint against the U.S. Department of the Interior, BOEM, and other government agencies after Cape Wind agreed to help local fisherman in the area secure federal fishing permits. Financial terms of the settlement were not disclosed. Kelley Drye & Warren partner David Frulla represented the fishermen. Several anti–Cape Wind complaints are pending and have been consolidated into two federal suits.

The announcement of the most recent settlement comes some two years after Cape Wind became the first offshore wind developer to sign a lease with the Interior Department. Since then, the company has struck deals with local utilities NStar and National Grid to sell most of its output. With its 28-year federal lease in hand, Cape Wind has turned its attention to financing and hopes to start construction next year, according to spokesman Mark Rodgers. In April the company hired three contractors—Flatiron Construction Corp., Cal Dive International, Inc., and Cashman Equipment Corp.—to begin work on the job, which Rogers estimates will take about two and a half years to complete.

Offshore Wind Development Coalition president Lanard hopes the Smart from the Start program will make things easier for those who follow in Cape Wind’s path by offering other would-be ocean-based wind farmers clearer guidelines, quicker feedback, and closer coordination between the various entities involved in the permitting process. He warns, however, “these efficiencies will only be achieved if BOEM does a great deal of preparatory work.”

Maureen Bornholdt, a program manager at the bureau, says that is indeed the plan. Local, state, tribal, and federal officials confer early on to vet potential wind areas. In the case of the Martha’s Vineyard site, for example, the bureau suggested an area for leasing, then whittled it down after factoring in commercial fishing interests.

New projects will also be built farther from shore than Cape Wind, putting them out of view for potentially litigious seaside homeowners.

That, Dickstein’s Lehfeldt says, doesn’t mean lawsuits won’t still arise, as they often do with major infrastructure developments: “I’ve been involved in very few projects in my career that didn’t involve litigation. Litigation will continue to exist, but that’s normal.”

And it will at least mean offshore wind is beginning to take flight.