Upon lapse of the Patrick administration, the major electric utilities in Massachusetts quickly bailed out of contracts to buy costly offshore wind-power from Cape Wind, citing lack of agreed progress on the project. Barnstable, the largest town on the Cape, had joined with others, suing to quash agreements they said the Patrick administration coerced utilities into signing. That lawsuit may be moot, but only lawyers stood to profit. Last January, Cape Wind became a legal zombie.
Racing the wind: A national race for offshore wind-power is being won by Deepwater Wind in Rhode Island. This spring, Deepwater began building foundations three miles offshore from Mohegan Bluffs, on the south side of Block Island. Next summer, the company aims to install five turbines. Ironically, the state with the least wind-power capacity in New England looks to become the U.S. pioneer of offshore wind-power.
Writing this spring in the Boston Globe, Derrick Jackson claimed that the apparent success of Deepwater Wind versus Cape Wind had sprung from “thinking smaller,” but he was not looking far beyond the end of his nose. From an initial base of five turbines, Deepwater has plans to install at least five more off Block Island and then to move out into Rhode Island Sound, where it holds federal leases on areas large enough for more than 200 similar turbines. Total power generation could be around three times recent estimates for Cape Wind.
The turbines being manufactured by Alstom of France also mean thinking big. They are nearly twice the size Cape Wind had planned, by peak power ratings, and about three times the size of any land-based turbine in Massachusetts. Rather than use the speed-increasing gearboxes needed with induction generators, they use direct-drive generators, removing a common source of high maintenance costs and turbine disasters. So far, however, offshore wind power has failed to demonstrate any useful economy of scale.
Politics, jobs and prices: Like Cape Wind, Deepwater carefully surveyed wind profiles before bidding on leases and building turbines. Unlike Cape Wind, Deepwater paid good attention to political as well as ocean winds. In contrast to Cape Cod, Block Island lacks a powerful corps of rich people inclined to hire expensive lawyers. Instead, Deepwater was able to appeal to lingering senses of inferiority, promising a leap into high technology.
The appeal that seized former Rhode Island Gov. Carcieri, however, was jobs–good-paying technology jobs in an economy savaged by the 2008 recession. Carcieri helped Deepwater with a land base for operations at Quonset Point, working to haul in over $23 million in federal money for the facility, and he helped to enlist state regulators, ushering Deepwater into the state’s wholesale electricity market.
His successor, former Gov. Chafee, helped to clear a path to permits for Deepwater through state and federal bureaucracies, making it advantageous for the company to build first in state-chartered waters off Block Island and to start the clock running on company operations. Unlike Cape Wind, which never produced any power, by the end of next year Deepwater will be delivering electricity, starting to satisfy contracts.
Deepwater claimed it would employ hundreds of workers from Rhode Island while building the Block Island wind farm. The fine print said something else. According to sworn testimony by a Deepwater representative, after the facility now in progress opened, there would be only six permanent jobs. The price for that employment was huge: nearly four times the average wholesale price for electricity in New England.
Deepwater’s agreement with National Grid calls for an initial wholesale price of $0.244 per kWh. Cape Wind had not been quite so greedy, settling on an initial wholesale price from National Grid of $0.188 per kWh. According to power-pool regulator ISO New England, the region’s average wholesale electricity price, at the busbars of power plants, was $0.0633 per kWh during calendar 2014–considered a fairly high-priced year.
Ripping off customers: Retail customers are paying transmission and distribution charges, too. The U.S. Energy Information Administration found that the average total price paid by New England residential customers during calendar 2014 was $0.179 per kWh. Transmission and distribution combined cost them on average $0.116 per kWh.
If New England residential customers had to buy all their wholesale electricity at Deepwater prices, they would have paid a total of $0.36 per kWh on average during 2014, more than twice the actual average total that year. All the New England states are requiring utilities to get increasing amounts of electricity from renewable sources, but so far utilities have been able to find much lower prices from land-based wind farms and hydroelectric generators.
Luckily for Brookline residents, Deepwater never extracted contracts from Eversource or its predecessors, NStar and Northeast Utilities. National Grid serves nearly all of Rhode Island, tending to make that company far more susceptible to political factors there. As Deepwater grows, its dead weight on Rhode Island customers and on other National Grid customers in northeast, central and southeast Massachusetts will grow apace.
– Craig Bolon, Brookline, MA, July 26, 2015
Diane Cardwell, Offshore wind farm raises hopes of U.S. clean-energy backers, New York Times, July 24, 2015
U.S. regional electricity prices, U.S. Energy Information Administration, July, 2015
Beth Winegarner, Cape Wind deadline halted while Massachusetts mulls extension, Law360 (New York, NY), May 28, 2015
New England’s wholesale electricity and capacity markets were competitive in 2014, ISO New England, May 20, 2015
Derrick Jackson, Wind power’s future depends on thinking smaller, Boston Globe, March 28, 2015
Craig Bolon, New England energy: wobbly progress, Brookline Beacon, January 12, 2015
Alex Elvin, NStar and National Grid sever contracts with Cape Wind, Vineyard Gazette, January 7, 2015
Deepwater Wind (Block Island Wind Farm) summary, U.S. Army Corps of Engineers, New England District, 2014
Block Island wind farm permit, Deepwater Wind, U.S. Army Corps of Engineers, September 4, 2014
Deepwater Wind project, Rhode Island Coastal Resources Management Council staff report, January 24, 2014
Memorandum for record, Block Island wind farm, U.S. Army Corps of Engineers, October, 2013
Mark Drajem and Andrew Herndon, Deepwater wins first auction for U.S. offshore wind lease, Bloomberg News, July 31, 2013
Visual impact assessment, Block Island wind farm, Deepwater Wind, submitted to U.S. Army Corps of Engineers, May, 2012
RI Supreme Count hears anti-Deepwater Wind arguments, Wind Power, May, 2011
National Grid, Power-purchase agreement with Deepwater Wind, June 30, 2010