March 8, 2011 - Maryland's long-term contracting for offshore wind

Tuesday, March 8, 2011

Offshore wind development in the mid-Atlantic states is moving forward - what will it cost?  The Maryland legislature is considering a plan by Governor Martin O'Malley to kickstart offshore wind development.  The Governor has said that offshore wind projects are a critical part of how Maryland can meet the state's renewable energy goal of sourcing 20 percent of its electricity from renewable sources by 2022, but without long-term contracts, it is unclear whether enough (or any) projects would be built.  To get over this hurdle, Governor O'Malley's plan would require Maryland utilities to sign long-term contracts to buy offshore wind power at prices above the current market rate.  Project developers view the contracts, lasting up to 25 years, as essential to getting the projects financed and built. 
So how much will this cost?  Figures diverge by a factor of more than sixfold.  Governor O'Malley's estimates are that the plan will cost the average ratepayer $1.44 per month, but that figure has been called into question by other more recent analyses.  The Maryland legislature's budget analyst's has concluded that the monthly cost to average ratepayers will be $3.61, while Maryland's Public Service Commission has predicted a range of monthly costs between $2.16 and $8.70.

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