Federal energy regulators have denied a complaint by a Newport, Rhode Island city councilor against state regulators' approval of a power purchase agreement for an offshore wind project off Block Island.
At issue is Deepwater Wind Block Island, LLC's small-scale 30-megawatt offshore wind project located near Rhode Island's Block Island. The project sells its output to utility Narragansett Electric Company, Inc. d/b/a National Grid (National Grid), pursuant to a power purchase agreement approved by the Rhode Island Public Utilities Commission on August 16, 2010.
On June 7, 2018, Ms. Kathryn E. Leonard filed a complaint to the Federal Energy Regulatory Commission, alleging that the implementation of the power purchase agreement violated various federal laws, including the Federal Power Act, Public Utility Regulatory Policies Act of 1978 (PURPA), and the Supremacy and Interstate Commerce Clauses of the U.S. Constitution.
On April 24, 2019, the Commission issued its order denying Ms. Leonard's complaint. In the seventeen-page order, the Commission noted that the complainant provided no evidence in support of her assertion that the power purchase agreement was entered into pursuant to Rhode Island's implementation of PURPA. Instead, the Commission found that the Rhode Island Public Utilities Commission's approval of the contract was pursuant to state law, not pursuant to its PURPA regulations -- but that even if it were pursuant to PURPA, federal regulations governing sales by qualifying facilities to electric utilities explicitly permit negotiated rates.
The Commission similarly found that the complainant failed to show that the contract or its pricing was unjust and unreasonable under the Federal Power Act, and to provide sufficient support for its constitutional claims. The Commission also distinguished the Block Island PPA from contracts it previously invalidated in another case, Hughes v. Talen, which involved contracts for differences and an explicit requirement of participation in the capacity market. For these reasons, the Commission denied the complaint.
The Block Island project is the first commercially-operating offshore wind project in the United States. A number of other projects are currently under development, and several states in the Northeast have enacted laws requiring utility procurement of offshore wind energy. According to a 2016 analysis by the U.S. Department of Energy, U.S. offshore wind has a technical resource potential of more than 2,000
gigawatts of capacity, or 7,200 terawatt-hours of generation per year -- nearly twice the nation’s current electricity use.
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Showing posts with label deepwater wind. Show all posts
Showing posts with label deepwater wind. Show all posts
Deepwater Wind proposes offshore wind, battery storage for MA RFP
Friday, August 4, 2017
Massachusetts energy regulators are reviewing bids to supply clean energy from new sources -- including a combined offshore wind and energy storage project proposed by developer Deepwater Wind.
Rhode Island-based Deepwater Wind is the developer of America's first commercial offshore wind project, the 30 MW Block Island Wind Farm which began commercial operations in December 2016. Other projects in early-stage development by the company include the 90 MW South Fork Wind Farm serving Long Island and the 120 MW Skipjack Wind Farm serving Maryland.
Earlier this year, prompted by 2016 state legislation, the Massachusetts electric distribution companies, in coordination with the Massachusetts Department of Energy Resources, issued a Request for Proposals for Long-term Contracts for Clean Energy Projects pursuant to Section 83D. Through the RFP, the Massachusetts utilities solicited proposals for clean energy generation in an amount roughly equal to 9,450,000 MWh.
According to Deepwater Wind, it responded to the Massachusetts clean energy RFP by proposing the Revolution Wind farm, paired with a battery storage system. The company's prime proposal features 144 MW of wind generation, coupled with a 40 MWh battery system, which it says will "help to defer the need to construct costly new peaking generating facilities and controversial transmission lines." The project would be sited on the Outer Continental Shelf off Massachusetts, about 30 miles from the mainland and about 12 miles off Martha's Vineyard, under a lease from the federal government. It would be adjacent to Deepwater Wind’s South Fork Wind Farm. Emphasizing flexibility and scalability, as well as the ability to complete construction in one season, alternative bids submitted by the company envisioned a larger 288 MW version of Revolution Wind and a smaller 96 MW version.
Deepwater Wind says it also intends to submit an offshore wind proposal under a separate solicitation process under way in under Section 83C of Massachusetts law, with bids due by December 2018.
Rhode Island-based Deepwater Wind is the developer of America's first commercial offshore wind project, the 30 MW Block Island Wind Farm which began commercial operations in December 2016. Other projects in early-stage development by the company include the 90 MW South Fork Wind Farm serving Long Island and the 120 MW Skipjack Wind Farm serving Maryland.
Earlier this year, prompted by 2016 state legislation, the Massachusetts electric distribution companies, in coordination with the Massachusetts Department of Energy Resources, issued a Request for Proposals for Long-term Contracts for Clean Energy Projects pursuant to Section 83D. Through the RFP, the Massachusetts utilities solicited proposals for clean energy generation in an amount roughly equal to 9,450,000 MWh.
According to Deepwater Wind, it responded to the Massachusetts clean energy RFP by proposing the Revolution Wind farm, paired with a battery storage system. The company's prime proposal features 144 MW of wind generation, coupled with a 40 MWh battery system, which it says will "help to defer the need to construct costly new peaking generating facilities and controversial transmission lines." The project would be sited on the Outer Continental Shelf off Massachusetts, about 30 miles from the mainland and about 12 miles off Martha's Vineyard, under a lease from the federal government. It would be adjacent to Deepwater Wind’s South Fork Wind Farm. Emphasizing flexibility and scalability, as well as the ability to complete construction in one season, alternative bids submitted by the company envisioned a larger 288 MW version of Revolution Wind and a smaller 96 MW version.
Deepwater Wind says it also intends to submit an offshore wind proposal under a separate solicitation process under way in under Section 83C of Massachusetts law, with bids due by December 2018.
Maryland considers offshore wind applications
Tuesday, December 6, 2016
Maryland moves closer to offshore wind development, as the state Public Service Commission reviews two applications for offshore wind projects.
The Maryland Offshore Energy Act of 2013 contains a number of provisions that would benefit a “qualified offshore wind project” that
On November 22, the Commission's consultant announced that two offshore wind project applications were submitted, found to be administratively complete, and found to have met the minimum threshold criteria. The applicants are (i) US Wind, Inc., a subsidiary of Toto Holding SpA, and (ii) Skipjack Offshore Wind, LLC, a subsidiary of Deepwater Wind Holdings, LLC.
The Commission then opened a docketed proceeding (Case Number 9431) to conduct a multi-part review to evaluate and compare the proposed offshore wind project applications submitted by US Wind and Skipjack. Petitions to intervene in that proceeding are due by Monday, December 12, 2016.
The Maryland Offshore Energy Act of 2013 contains a number of provisions that would benefit a “qualified offshore wind project” that
- is located on the outer continental shelf, between 10 and 30 miles off the Maryland coast, in an area that is designated for leasing by the Bureau of Ocean Energy Management within the U.S. Department of the Interior,
- interconnects to the PJM Interconnection grid at a point located on the Delmarva peninsula, and
- is approved by the Public Service Commission.
On November 22, the Commission's consultant announced that two offshore wind project applications were submitted, found to be administratively complete, and found to have met the minimum threshold criteria. The applicants are (i) US Wind, Inc., a subsidiary of Toto Holding SpA, and (ii) Skipjack Offshore Wind, LLC, a subsidiary of Deepwater Wind Holdings, LLC.
The Commission then opened a docketed proceeding (Case Number 9431) to conduct a multi-part review to evaluate and compare the proposed offshore wind project applications submitted by US Wind and Skipjack. Petitions to intervene in that proceeding are due by Monday, December 12, 2016.
US releases new offshore wind strategy
Monday, September 12, 2016
U.S. executive branch agencies have released an updated report presenting a national strategy to facilitate the domestic development of offshore wind energy. According to the administration, the strategy could enable 86 gigawatts of U.S. offshore wind by 2050.
The new strategy document, "National Offshore Wind Strategy: Facilitating the Development of the Offshore Wind Industry in the United States", was prepared by the U.S. Department of Energy's Wind Energy Technologies Office and the Department of the Interior's Bureau of Ocean Energy Management. It builds on previous efforts, including the first national strategy for offshore wind released in 2011.
Consistent with previous Obama administration approaches, the revised U.S. offshore wind strategy rests on the premise that offshore wind energy can provide significant economic and environmental benefits. Estimates suggest the nation's total offshore wind energy technical potential is roughly twice as large as our demand for electricity, and almost 80% of U.S. electricity demand is located in coastal states. Offshore wind provides a low-carbon, fuel-free energy resource; if projects can produce power at low, long-term fixed costs, they can provide a hedge against fossil fuel volatility.
The new U.S. offshore wind strategy is designed to realize these benefits by overcoming challenges in three strategic themes: reducing costs and risks, supporting effective stewardship of U.S waters, and improving market conditions for offshore wind investment:
As noted in the report's introductory message, "There has never been a more exciting time for offshore wind in the United States." States and some utilities are increasingly interested in procuring offshore wind energy. In recent years, BOEM has awarded 11 commercial leases for offshore wind development that could support a total of 14.6 gigawatts of capacity. Earlier this summer, Deepwater Wind completed construction of its 30-megawatt Block Island wind project, the nation's first offshore commercial wind farm. That project is expected to enter commercial operation later this year.
The new strategy document, "National Offshore Wind Strategy: Facilitating the Development of the Offshore Wind Industry in the United States", was prepared by the U.S. Department of Energy's Wind Energy Technologies Office and the Department of the Interior's Bureau of Ocean Energy Management. It builds on previous efforts, including the first national strategy for offshore wind released in 2011.
Consistent with previous Obama administration approaches, the revised U.S. offshore wind strategy rests on the premise that offshore wind energy can provide significant economic and environmental benefits. Estimates suggest the nation's total offshore wind energy technical potential is roughly twice as large as our demand for electricity, and almost 80% of U.S. electricity demand is located in coastal states. Offshore wind provides a low-carbon, fuel-free energy resource; if projects can produce power at low, long-term fixed costs, they can provide a hedge against fossil fuel volatility.
The new U.S. offshore wind strategy is designed to realize these benefits by overcoming challenges in three strategic themes: reducing costs and risks, supporting effective stewardship of U.S waters, and improving market conditions for offshore wind investment:
First, to be competitive in electricity markets, offshore wind costs and U.S.-specific technology risks need to be reduced. Second, environmental and regulatory uncertainties need to be addressed to reduce permitting risks and ensure effective stewardship of the OCS. Third, to increase understanding of the benefits of offshore wind to support near-term deployment, the full spectrum of the electricity system and other economic, social, and environmental costs and benefits of offshore wind need to be quantified and communicated to policymakers and stakeholders.The report further describes seven action areas, and 34 specific actions, that the Energy and Interior Departments can take to support offshore wind development.
As noted in the report's introductory message, "There has never been a more exciting time for offshore wind in the United States." States and some utilities are increasingly interested in procuring offshore wind energy. In recent years, BOEM has awarded 11 commercial leases for offshore wind development that could support a total of 14.6 gigawatts of capacity. Earlier this summer, Deepwater Wind completed construction of its 30-megawatt Block Island wind project, the nation's first offshore commercial wind farm. That project is expected to enter commercial operation later this year.
Block Island offshore wind celebrated, challenged
Thursday, August 20, 2015
U.S. and Rhode Island officials recently celebrated the start of construction on the Block Island Wind Farm, which is on track to be the first commercial offshore wind farm in the U.S. The five-turbine, 30-megawatt project under development by Deepwater Wind is scheduled to come online in 2016; turbine foundation construction and other "steel in the water" activities are underway. As a pioneer in U.S. offshore wind development, the Block Island project has survived years of permitting uncertainty and repeated legal challenges by project opponents. But another such lawsuit was filed this week in federal court. What does the future hold for the Block Island Wind Farm?
Project developer Deepwater Wind is owned principally by an entity of the D.E. Shaw group. Its Block Island project is currently under construction in Rhode Island state waters about three nautical miles southeast of Block Island. The project will feed power directly to consumers on Block Island, but also includes a 25-mile bi-directional submerged transmission cable between Block Island and the mainland. The project's finances rest in part on a power purchase agreement through which Deepwater Wind will sell power to utility National Grid.
That power purchase agreement, or PPA, has been the subject of several legal challenges. Those challenges often cite the deal's cost: pricing for the Block Island power starts as high as 24.4 cents per kilowatt-hour, and escalates 3.5 percent annually. These prices are more than double the typical Rhode Island energy price, for an estimated $497 million in above-market costs over the 20-year deal.
In 2009 and early 2010, the Rhode Island Public Utilities Commission rejected proposals by Deepwater Wind and National Grid, largely over cost. The parties then returned with a revised proposal. In 2010, TransCanada Power Marketing Ltd. unsuccessfully argued that the Rhode Island commission shouldn't consider that proposal due to constitutional infirmities in the Rhode Island law favoring renewable power contracts with in-state projects. On August 16, 2010, the Commission issued its order approving the PPA. After that order was appealed to the state Supreme Court, the Supreme Court issued a written opinion upholding the Commission's Order on July 1, 2011. In 2012 and in 2015, project opponents petitioned the Federal Energy Regulatory Commission to invalidate the Rhode Island commission's action, which FERC declined to do. Through all this, the project moved forward and ultimately began local construction earlier this year.
But the project is not yet completely out of stormy seas. On August 14, 2015, plaintiffs with a history of engagement in some of these earlier challenges filed a lawsuit in U.S. District Court in Rhode Island. As in previous challenges, this complaint argues that the Rhode Island Public Utilities Commission violated federal laws in approving the Block Island deal because only the Federal Energy Regulatory Commission may regulate wholesale electricity sales. While it is possible that this case could be swiftly dismissed, if it lingers it could add uncertainty to the project until its resolution. Last year a federal court invalidated a FERC ruling on the grounds that it impermissibly tread on state rights to set retail electricity rates. That case, Electric Power Supply Association v. Federal Energy Regulatory Commission, has been appealed to the U.S. Supreme Court.
With construction underway, the Block Island project now has significant inertia behind it. What impact will the recently filed lawsuit have? Will it affect Deepwater Wind's position as "first in the water" in the race for U.S. commercial offshore wind development?
Project developer Deepwater Wind is owned principally by an entity of the D.E. Shaw group. Its Block Island project is currently under construction in Rhode Island state waters about three nautical miles southeast of Block Island. The project will feed power directly to consumers on Block Island, but also includes a 25-mile bi-directional submerged transmission cable between Block Island and the mainland. The project's finances rest in part on a power purchase agreement through which Deepwater Wind will sell power to utility National Grid.
That power purchase agreement, or PPA, has been the subject of several legal challenges. Those challenges often cite the deal's cost: pricing for the Block Island power starts as high as 24.4 cents per kilowatt-hour, and escalates 3.5 percent annually. These prices are more than double the typical Rhode Island energy price, for an estimated $497 million in above-market costs over the 20-year deal.
In 2009 and early 2010, the Rhode Island Public Utilities Commission rejected proposals by Deepwater Wind and National Grid, largely over cost. The parties then returned with a revised proposal. In 2010, TransCanada Power Marketing Ltd. unsuccessfully argued that the Rhode Island commission shouldn't consider that proposal due to constitutional infirmities in the Rhode Island law favoring renewable power contracts with in-state projects. On August 16, 2010, the Commission issued its order approving the PPA. After that order was appealed to the state Supreme Court, the Supreme Court issued a written opinion upholding the Commission's Order on July 1, 2011. In 2012 and in 2015, project opponents petitioned the Federal Energy Regulatory Commission to invalidate the Rhode Island commission's action, which FERC declined to do. Through all this, the project moved forward and ultimately began local construction earlier this year.
But the project is not yet completely out of stormy seas. On August 14, 2015, plaintiffs with a history of engagement in some of these earlier challenges filed a lawsuit in U.S. District Court in Rhode Island. As in previous challenges, this complaint argues that the Rhode Island Public Utilities Commission violated federal laws in approving the Block Island deal because only the Federal Energy Regulatory Commission may regulate wholesale electricity sales. While it is possible that this case could be swiftly dismissed, if it lingers it could add uncertainty to the project until its resolution. Last year a federal court invalidated a FERC ruling on the grounds that it impermissibly tread on state rights to set retail electricity rates. That case, Electric Power Supply Association v. Federal Energy Regulatory Commission, has been appealed to the U.S. Supreme Court.
With construction underway, the Block Island project now has significant inertia behind it. What impact will the recently filed lawsuit have? Will it affect Deepwater Wind's position as "first in the water" in the race for U.S. commercial offshore wind development?
Rhode Island offshore transmission line
Thursday, November 20, 2014
Federal regulators have granted a right-of-way in federal waters for an electric transmission line connecting to the proposed Block Island offshore wind farm off Rhode Island. The Bureau of Ocean Energy Management describes the grant as the first right-of-way grant offered in federal waters for renewable energy transmission.
Proposed by Deepwater Wind, the Block Island Wind Farm is a 30-megawatt offshore wind farm to be located approximately three miles southeast of Block Island. Located entirely in Rhode Island state waters, the 5-turbine project is expected to generate over 125,000 megawatt hours annually. The project received its final required permit in September 2014, and in 2010 secured a 20-year power purchase agreement with Narragansett Electric Co.
Block Island is about 13 miles off the mainland coast, and is not connected to the mainland by a power cable or road. While the island's population does consume some electricity, most of the wind farm's power will be exported to the mainland electric grid via a newly built 21-mile submarine cable. Because the proposed Block Island Transmission System is bi-directional, it would also transmit power from the existing onshore transmission grid on the mainland to Block Island, stabilizing supplies of electricity available to islanders.
The Block Island Transmission System is proposed to make landfall in Narragansett, Rhode Island. Rhode Island's territorial waters extend 3 miles seaward from shore. To reach the mainland, the submerged transmission line must cross about 8 nautical miles of federal waters.
The Bureau of Ocean Energy Management regulates the use of federally controlled Outer Continental Shelf sites for energy production. In 2012, Deepwater Wind applied to the BOEM for a right-of-way about eight nautical miles long and 200 feet wide. Before reviewing this application, BOEM was required to determine whether there are other developers interested in constructing transmission facilities in the same area. Therefore, BOEM published a Commercial Renewable Energy Transmission on the Outer Continental Shelf (OCS) Offshore Rhode Island, Notice of Proposed Grant Area and Request for Competitive Interest (RFCI) in the Area of the Deepwater Wind Block Island Transmission System Proposal in the Federal Register on May 23, 2012 under Docket ID BOEM-2012-0009. BOEM also solicited public comment on site conditions and multiple uses within the right-of-way grant area.
Following the public comment period, BOEM determined there was no overlapping competitive interest in the proposed right-of-way grant area off Rhode Island and published a "Notice of Determination of No Competitive Interest" in the Federal Register on August 7, 2012 under Docket ID: BOEM-2012-0068.
Because most of the activities and permanent structures related to the entire wind farm project will be sited in state waters and on state lands, the U.S. Army Corps of Engineers is the lead federal agency for analyzing the potential environmental effects of the project under the National Environmental Policy Act. In September 2014, the Corps completed its Environmental Assessment (EA) for the wind farm and transmission system, and issued a Finding of No Significant Impact (FONSI). BOEM subsequently adopted the Corps EA after conducting an independent review that found no reasonably foreseeable significant impacts are expected to occur as the result of the preferred alternative, or any of the alternatives contemplated by the EA. On October 27, 2014, BOEM issued a FONSI for the issuance of a ROW grant, and approval of the General Activities Plan (GAP), with modifications.
On November 17, 2014, BOEM announced the agency offered the ROW grant to Deepwater Wind for the Block Island Transmission System.
Proposed by Deepwater Wind, the Block Island Wind Farm is a 30-megawatt offshore wind farm to be located approximately three miles southeast of Block Island. Located entirely in Rhode Island state waters, the 5-turbine project is expected to generate over 125,000 megawatt hours annually. The project received its final required permit in September 2014, and in 2010 secured a 20-year power purchase agreement with Narragansett Electric Co.
Block Island is about 13 miles off the mainland coast, and is not connected to the mainland by a power cable or road. While the island's population does consume some electricity, most of the wind farm's power will be exported to the mainland electric grid via a newly built 21-mile submarine cable. Because the proposed Block Island Transmission System is bi-directional, it would also transmit power from the existing onshore transmission grid on the mainland to Block Island, stabilizing supplies of electricity available to islanders.
The Block Island Transmission System is proposed to make landfall in Narragansett, Rhode Island. Rhode Island's territorial waters extend 3 miles seaward from shore. To reach the mainland, the submerged transmission line must cross about 8 nautical miles of federal waters.
The Bureau of Ocean Energy Management regulates the use of federally controlled Outer Continental Shelf sites for energy production. In 2012, Deepwater Wind applied to the BOEM for a right-of-way about eight nautical miles long and 200 feet wide. Before reviewing this application, BOEM was required to determine whether there are other developers interested in constructing transmission facilities in the same area. Therefore, BOEM published a Commercial Renewable Energy Transmission on the Outer Continental Shelf (OCS) Offshore Rhode Island, Notice of Proposed Grant Area and Request for Competitive Interest (RFCI) in the Area of the Deepwater Wind Block Island Transmission System Proposal in the Federal Register on May 23, 2012 under Docket ID BOEM-2012-0009. BOEM also solicited public comment on site conditions and multiple uses within the right-of-way grant area.
Following the public comment period, BOEM determined there was no overlapping competitive interest in the proposed right-of-way grant area off Rhode Island and published a "Notice of Determination of No Competitive Interest" in the Federal Register on August 7, 2012 under Docket ID: BOEM-2012-0068.
Because most of the activities and permanent structures related to the entire wind farm project will be sited in state waters and on state lands, the U.S. Army Corps of Engineers is the lead federal agency for analyzing the potential environmental effects of the project under the National Environmental Policy Act. In September 2014, the Corps completed its Environmental Assessment (EA) for the wind farm and transmission system, and issued a Finding of No Significant Impact (FONSI). BOEM subsequently adopted the Corps EA after conducting an independent review that found no reasonably foreseeable significant impacts are expected to occur as the result of the preferred alternative, or any of the alternatives contemplated by the EA. On October 27, 2014, BOEM issued a FONSI for the issuance of a ROW grant, and approval of the General Activities Plan (GAP), with modifications.
On November 17, 2014, BOEM announced the agency offered the ROW grant to Deepwater Wind for the Block Island Transmission System.
Feds to auction Maryland offshore wind sites
Monday, August 11, 2014
On August 19, the U.S. Department of the Interior's Bureau of Ocean Energy Management will auction off rights to lease sites off the Maryland coast for offshore wind. Through the auction, which will represent the third auction for offshore wind sites in federal waters since July 2013, the Bureau hopes it will award leases to two areas covering approximately 80,000 acres about
10 nautical miles east of the Ocean City coastline.
Last year, the Department of the Interior held its first offshore wind site auction for sites off Massachusetts and Rhode Island; Deepwater Wind won that auction with a bid of $3.8 million. The second auction, held for Virginia on September 4, covered approximately 112,799 acres about 23.5 nautical miles from the Virginia Beach coastline; Dominion Virginia Power won that auction with a bid of $1.6 million.
The Maryland auction later this month will follow procedures similar to those used in the previous two auctions. Based on previous expressions of interest and qualifications, BOEM has determined that sixteen companies are eligible to bid on the Maryland sites:
Offshore wind project developers must coordinate regulatory, financial, and engineering efforts. Securing a site for a project is a major step forward, but is only one of many important steps necessary to build an operating offshore wind project -- something the U.S. still lacks. How much interest will the Maryland auction draw? Who will win the right to lease the two parcels in the Maryland wind energy area, and how much will they pay? Will the auction winners actually build offshore wind projects? Some of these questions will be answered when the auction closes on August 19.
Last year, the Department of the Interior held its first offshore wind site auction for sites off Massachusetts and Rhode Island; Deepwater Wind won that auction with a bid of $3.8 million. The second auction, held for Virginia on September 4, covered approximately 112,799 acres about 23.5 nautical miles from the Virginia Beach coastline; Dominion Virginia Power won that auction with a bid of $1.6 million.
The Maryland auction later this month will follow procedures similar to those used in the previous two auctions. Based on previous expressions of interest and qualifications, BOEM has determined that sixteen companies are eligible to bid on the Maryland sites:
- Apex Offshore Maryland, LLC
- Bluewater Wind Maryland LLC
- Convalt Energy LLC
- Dominion Wind Development, LLC
- EDF Renewable Development, Inc.
- Energy Management, Inc.
- Fishermen’s Energy, LLC
- Green Sail Energy LLC
- IBERDROLA RENEWABLES, Inc.
- Maryland Offshore Wind LLC
- Orisol Energy US, Inc.
- RES America Developments Inc.
- SCS Maryland Energy LLC
- Sea Breeze Energy LLC
- Seawind Renewable Energy Corporation LLC
- US Wind Inc.
Offshore wind project developers must coordinate regulatory, financial, and engineering efforts. Securing a site for a project is a major step forward, but is only one of many important steps necessary to build an operating offshore wind project -- something the U.S. still lacks. How much interest will the Maryland auction draw? Who will win the right to lease the two parcels in the Maryland wind energy area, and how much will they pay? Will the auction winners actually build offshore wind projects? Some of these questions will be answered when the auction closes on August 19.
US holds first offshore wind site lease auction
Thursday, August 1, 2013
Yesterday the U.S. Department of the Interior held its first competitive lease sale for renewable energy on the Outer Continental Shelf. With a total bid of about $3.8 million, Deepwater Wind New England, LLC won the rights to lease two parcels covering 164,750 acres offshore Rhode Island and Massachusetts. What do the auction results mean?
Consistent with President Obama's climate action plan, the Interior Department is promoting the use of federal lands for the production of renewable electricity. Yesterday's auction represents the first competitive auction for leases for offshore wind sites in federal waters. Following significant stakeholder process, the Interior Department identified and refined the parcels off Rhode Island and Massachusetts, and solicited interest in leasing sites. In June, the Interior Department announced that nine companies were legally, technically, and financially qualified to participate in the auction.
The auction took place in two phases in late July. First, a panel met to consider non-monetary factors, including whether any bidders held agreements that could make their project a more realistic success. For example, bidders demonstrating a power purchase agreement or joint development agreement could score bonus points enabling them to compete against higher monetary bids. Deepwater Wind's joint development agreement with the State of Rhode Island thus gave it an advantage in the second round held on July 31. This round took a more traditional auction format, with bidders placing a series of increasing bids until only one bidder remained for each parcel.
Three bidders participated in the auction: Deepwater Wind New England, LLC, Sea Breeze Energy, LLC, and US Wind Inc. After 4 rounds, Deepwater Wind had won the south parcel for $94,153, and only one other company remained in the competition for the north parcel. By round 11, Deepwater Wind had won the north parcel with a bid of $3,744,135.
With the auction completed, Deepwater Wind has 10 days to execute the lease agreements. Its first rent under the leases will be due in 45 days. Lease fees for the sites will be charged at $3 per acre, and if Deepwater Wind develops an operating project, it will also pay an annual fee roughly equal to 2% of its wholesale energy market revenues.
Building on this first auction, the Department of the Interior plans to hold a second auction for sites off Virginia in September. Eight bidders have been deemed qualified to participate in the Virginia auction. How many bidders will actually participate in the auction? How much competitive interest will arise? For what price will the parcels' lease rights sell? Will the leases - whether off Rhode Island and Massachusetts, or off Virginia - lead to operating offshore wind projects? Time will tell how the 2013 offshore wind lease auctions affect U.S. energy development.
Consistent with President Obama's climate action plan, the Interior Department is promoting the use of federal lands for the production of renewable electricity. Yesterday's auction represents the first competitive auction for leases for offshore wind sites in federal waters. Following significant stakeholder process, the Interior Department identified and refined the parcels off Rhode Island and Massachusetts, and solicited interest in leasing sites. In June, the Interior Department announced that nine companies were legally, technically, and financially qualified to participate in the auction.
The auction took place in two phases in late July. First, a panel met to consider non-monetary factors, including whether any bidders held agreements that could make their project a more realistic success. For example, bidders demonstrating a power purchase agreement or joint development agreement could score bonus points enabling them to compete against higher monetary bids. Deepwater Wind's joint development agreement with the State of Rhode Island thus gave it an advantage in the second round held on July 31. This round took a more traditional auction format, with bidders placing a series of increasing bids until only one bidder remained for each parcel.
Three bidders participated in the auction: Deepwater Wind New England, LLC, Sea Breeze Energy, LLC, and US Wind Inc. After 4 rounds, Deepwater Wind had won the south parcel for $94,153, and only one other company remained in the competition for the north parcel. By round 11, Deepwater Wind had won the north parcel with a bid of $3,744,135.
With the auction completed, Deepwater Wind has 10 days to execute the lease agreements. Its first rent under the leases will be due in 45 days. Lease fees for the sites will be charged at $3 per acre, and if Deepwater Wind develops an operating project, it will also pay an annual fee roughly equal to 2% of its wholesale energy market revenues.
Building on this first auction, the Department of the Interior plans to hold a second auction for sites off Virginia in September. Eight bidders have been deemed qualified to participate in the Virginia auction. How many bidders will actually participate in the auction? How much competitive interest will arise? For what price will the parcels' lease rights sell? Will the leases - whether off Rhode Island and Massachusetts, or off Virginia - lead to operating offshore wind projects? Time will tell how the 2013 offshore wind lease auctions affect U.S. energy development.
Feds to hold first offshore wind auction
Wednesday, June 5, 2013
The U.S. Department of the Interior has announced plans to hold a competitive lease sale for renewable energy on the Outer Continental Shelf offshore Rhode Island and Massachusetts. According to a Final Sale Notice published in today's Federal Register, the auction, scheduled to be held by the Bureau of Ocean Energy Management on July 31, will be the first auction of its type for offshore wind site leases in U.S. waters.
The auction will cover about 164,750 acres of sea space in a
previously defined Wind Energy Area located 9.2 nautical miles south of
the Rhode
Island shore. For leasing purposes, the BOEM has divided the area into two leases. The North Lease Area
(Lease OCS-A0486) consists of about 97,500 acres, and is estimated to
have the potential for an installed capacity of 1,955 megawatts of
electric generation. The South Lease Area
(Lease OCS-A0487) covers about 67,250 acres, and is estimated to have
the potential for an installed capacity of 1,440 megawatts.
Based on a review by the National Renewable Energy Laboratory, the Bureau of Ocean Energy Management has concluded that the North and South Lease Areas have significantly dissimilar attributes that make the North Lease area "a more competitive and cost effective area for near term commercial development." The Bureau thus set the minimum bid for the North Lease Area will be $2 per acre, or $194,996, while the minimum bid for the South Lease Area will be $1 per acre, or $67,252.
BOEM has pre-screened and approved nine companies as bidders in the auction:
BOEM has described the auction as the "first-ever competitive lease sale for renewable energy on the U.S. Outer Continental Shelf." How the auction runs -- and its results -- will be informative as to the future of offshore wind in U.S. waters.
 |
| Map of the Rhode Island and Massachusetts Lease Areas, courtesy of BOEM. |
Based on a review by the National Renewable Energy Laboratory, the Bureau of Ocean Energy Management has concluded that the North and South Lease Areas have significantly dissimilar attributes that make the North Lease area "a more competitive and cost effective area for near term commercial development." The Bureau thus set the minimum bid for the North Lease Area will be $2 per acre, or $194,996, while the minimum bid for the South Lease Area will be $1 per acre, or $67,252.
BOEM has pre-screened and approved nine companies as bidders in the auction:
- Deepwater Wind New England, LLC
- EDF Renewable Development, Inc.
- Energy Management, Inc.
- Fishermen’s Energy, LLC
- IBERDROLA RENEWABLES, Inc.
- Neptune Wind, LLC
- Sea Breeze Energy, LLC
- U.S. Mainstream Renewable Power (Offshore) Inc.
- US Wind Inc.
BOEM has described the auction as the "first-ever competitive lease sale for renewable energy on the U.S. Outer Continental Shelf." How the auction runs -- and its results -- will be informative as to the future of offshore wind in U.S. waters.
2013: a look ahead
Thursday, January 3, 2013
With the new year upon us, here is a preview of several energy-related issues and events we will likely see this year:
Expansion of natural gas production, transmission and distribution. The spread of hydraulic fracturing or fracking as a technique to produce natural gas from previously-uneconomic sources appears to be the largest revolution in the U.S. energy landscape in decades. Natural gas will continue to displace coal and oil as an energy source in 2013, particularly for the generation of electricity. The availability of cheap natural gas will also lead to the development of more local distribution company pipelines, enabling more businesses and homes to connect to natural gas supplies. 2013 will likely also bring proposed new natural gas transmission pipelines, connecting gas sources like the Marcellus and Utica shale fields to consumers across the country.
Offshore wind in U.S. waters. 2013 may see the construction of the first offshore wind projects in United States waters. Cape Wind's project off Massachusetts may start cable work or other construction this year, as may Deepwater Wind's Block Island project off Rhode Island and Fishermen’s Energy's project off Atlantic City, New Jersey. Congress's last-minute extension of the Investment Tax Credit or ITC gives a significant boost to offshore wind projects capable of beginning construction in 2013. Not only was the tax credit's deadline extended by one year, but Congress also changed the trigger from being "placed in service" to commencing construction by December 31, 2013. No offshore wind projects are currently operating or under construction in U.S. waters, so 2013 could be the year the first projects enter the water. The federal Bureau of Ocean Energy Management is expected to continue its leasing program, making more ocean sites available for future offshore wind projects.
Keystone XL pipeline. The Keystone XL pipeline, a $7 billion proposed extension of an existing crude oil pipeline, is slated to connect Alberta, Canada to Texas. In 2011 and 2012, the project faced public scrutiny and failed to secure necessary federal and state approvals. Among other permits, the project faces State Department review because it would enable imports or exports of oil across the national border with Canada. Meanwhile, project lead TransCanada is moving ahead with the construction of some of the domestic legs of the project, and the full project is likely to come back up for review this year.
Energy efficiency continues to grow. Investments in energy efficiency are likely to continue to grow in 2013. Using fuels and energy sources more efficiently saves money for businesses and homeowners capable of making the investment. It can also lower market prices for electricity and fuels by reducing demand, spreading the savings across all consumers. New England regional electric grid operator ISO New England recently revised its load forecast to predict no increases in the demand for electricity through 2021 as a result of increased investment in energy efficiency. This trend is likely to continue nationwide.
With 362 days left in the year, these issues and events are likely to be discussed for some time to come. Will these predictions come true in 2013?
Expansion of natural gas production, transmission and distribution. The spread of hydraulic fracturing or fracking as a technique to produce natural gas from previously-uneconomic sources appears to be the largest revolution in the U.S. energy landscape in decades. Natural gas will continue to displace coal and oil as an energy source in 2013, particularly for the generation of electricity. The availability of cheap natural gas will also lead to the development of more local distribution company pipelines, enabling more businesses and homes to connect to natural gas supplies. 2013 will likely also bring proposed new natural gas transmission pipelines, connecting gas sources like the Marcellus and Utica shale fields to consumers across the country.
Offshore wind in U.S. waters. 2013 may see the construction of the first offshore wind projects in United States waters. Cape Wind's project off Massachusetts may start cable work or other construction this year, as may Deepwater Wind's Block Island project off Rhode Island and Fishermen’s Energy's project off Atlantic City, New Jersey. Congress's last-minute extension of the Investment Tax Credit or ITC gives a significant boost to offshore wind projects capable of beginning construction in 2013. Not only was the tax credit's deadline extended by one year, but Congress also changed the trigger from being "placed in service" to commencing construction by December 31, 2013. No offshore wind projects are currently operating or under construction in U.S. waters, so 2013 could be the year the first projects enter the water. The federal Bureau of Ocean Energy Management is expected to continue its leasing program, making more ocean sites available for future offshore wind projects.
Keystone XL pipeline. The Keystone XL pipeline, a $7 billion proposed extension of an existing crude oil pipeline, is slated to connect Alberta, Canada to Texas. In 2011 and 2012, the project faced public scrutiny and failed to secure necessary federal and state approvals. Among other permits, the project faces State Department review because it would enable imports or exports of oil across the national border with Canada. Meanwhile, project lead TransCanada is moving ahead with the construction of some of the domestic legs of the project, and the full project is likely to come back up for review this year.
Energy efficiency continues to grow. Investments in energy efficiency are likely to continue to grow in 2013. Using fuels and energy sources more efficiently saves money for businesses and homeowners capable of making the investment. It can also lower market prices for electricity and fuels by reducing demand, spreading the savings across all consumers. New England regional electric grid operator ISO New England recently revised its load forecast to predict no increases in the demand for electricity through 2021 as a result of increased investment in energy efficiency. This trend is likely to continue nationwide.
With 362 days left in the year, these issues and events are likely to be discussed for some time to come. Will these predictions come true in 2013?
Maine PUC declines to OK Statoil offshore wind term sheet
Thursday, October 4, 2012
Today the Maine Public Utilities Commission declined to approve a term sheet offered by Statoil North America, Inc. for a long-term power purchase agreement from its proposed Hywind Maine floating offshore wind project.
In 2010, Maine enacted a law designed to support the development of offshore wind and other marine renewable energy projects. Among other features, that law required the state Public Utilities Commission to conduct a competitive solicitation for proposals for deep-water offshore wind energy pilot projects, meaning grid-tied floating wind projects at least 10 nautical miles offshore. The statute gave the commission authority to direct mainland utilities to enter into power purchase agreements with one or more responding developers if certain minimum criteria were met. This authority was discretionary, meaning the commission could choose not to order the utilities to sign a deal even if it met those criteria.
In September 2010, the commission issued its request for proposals under the program. Over the ensuing years, Statoil emerged as the apparent leading respondent, proposing the "Hywind Maine" project, a four-turbine, twelve megawatt project south of Boothbay Harbor. Commission staff and Statoil negotiated the terms of a proposed power purchase agreement, which became public this summer. Among those terms was a proposed energy price of between $290 and $320 per megawatt-hour, escalating annually, for the first 41 gigawatt-hours of energy produced each year.
That term sheet was the subject of deliberations by the Maine commission this morning. After two hours of discussion, two of the three commissioners had stated that they would vote against approving the term sheet. They expressed concerns about the cost of the contract, as well as uncertainty over the deal's benefit to Maine and Maine ratepayers.
The Maine commission's action bears some resemblance to that of the Rhode Island Public Utilities Commission in 2010 when it rejected a proposed contract between utility National Grid and offshore wind developer Deepwater Wind on the grounds that $244 per megawatt-hour was not a "commercially reasonable" price. The Rhode Island commission ultimately approved a renegotiated deal with Deepwater Wind at a comparable price. Similarly, the Maine commission invited Statoil to revise its proposal to offer more benefits to Maine, and to present a renegotiated deal for further deliberation. Will Statoil be able to sweeten its offer and convince the commission that its contract is a good deal for Maine?
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| Sutton Island, Maine, about 80 miles downeast of the proposed Hywind Maine project. |
In September 2010, the commission issued its request for proposals under the program. Over the ensuing years, Statoil emerged as the apparent leading respondent, proposing the "Hywind Maine" project, a four-turbine, twelve megawatt project south of Boothbay Harbor. Commission staff and Statoil negotiated the terms of a proposed power purchase agreement, which became public this summer. Among those terms was a proposed energy price of between $290 and $320 per megawatt-hour, escalating annually, for the first 41 gigawatt-hours of energy produced each year.
That term sheet was the subject of deliberations by the Maine commission this morning. After two hours of discussion, two of the three commissioners had stated that they would vote against approving the term sheet. They expressed concerns about the cost of the contract, as well as uncertainty over the deal's benefit to Maine and Maine ratepayers.
The Maine commission's action bears some resemblance to that of the Rhode Island Public Utilities Commission in 2010 when it rejected a proposed contract between utility National Grid and offshore wind developer Deepwater Wind on the grounds that $244 per megawatt-hour was not a "commercially reasonable" price. The Rhode Island commission ultimately approved a renegotiated deal with Deepwater Wind at a comparable price. Similarly, the Maine commission invited Statoil to revise its proposal to offer more benefits to Maine, and to present a renegotiated deal for further deliberation. Will Statoil be able to sweeten its offer and convince the commission that its contract is a good deal for Maine?
Maine PUC considers offshore wind, tidal
Tuesday, April 24, 2012
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| Petit Manan Light, several miles off the Maine coast. |
In recent years, coastal states have become excited by the possibility of developing offshore wind and tidal energy resources. Proponents hope that technological advances will enable both cost-effective energy production and economic development as the offshore wind sector gains a foothold. In 2010, following record oil prices, the Maine Legislature enacted a law directing the Public Utilities Commission to hold a competitive solicitation for offshore wind proposals. The law, P.L. 2009, ch. 615, requires the PUC to solicit proposals for long-term contracts to supply installed capacity and associated renewable energy and renewable energy credits from one or more deep-water offshore wind energy pilot projects or tidal energy demonstration projects. Projects must employ one or more floating wind energy turbines in the Gulf of Maine, in water at least 300 feet deep and no less than 10 nautical miles offshore, and must be connected to the mainland grid. The program may also include proposals by small-scale tidal power projects for similar long-term power purchase agreements.
In September 2010, the Maine PUC issued a request for proposals under the program. Multiple bidders may have responded, although a subsidiary of Norwegian energy company Statoil may be the only entity to publicly announce its interest in developing a floating offshore wind project off Maine.
The Public Utilities Commission has placed the offshore wind contract docket on its agenda for today's deliberations as "Consideration of Long Term Contract Term Sheet". The Maine PUC has not previously deliberated any long-term power purchase agreements for offshore wind or tidal power, but its past practice for land-based renewable projects suggests a possible procedural path. If the Commission finds the terms of the proposal to be satisfactory and compliant with law, it may approve the term sheet and direct the bidder to negotiate a final contract with one or more Maine utilities. Alternatively, the Commission could reject the term sheet and invite the bidder to negotiate more favorable terms.
Deliberations start at 10:00 a.m. Will the Maine PUC show interest in the deepwater offshore wind or tidal power proposal before it today?
February 24, 2011 - Maine offshore wind research
Thursday, February 24, 2011
Collaboration between academia and industry is key to tackling the significant technical and legal challenges associated with the development of offshore wind potential. This symposium held this week by the University of Maine and the DeepCWind Consortium gives project developers the research results they will need to make more informed bids for offshore wind development in the Gulf of Maine.
The report gives key data useful to any developer of a successful offshore wind project in the Gulf of Maine: data on "met-ocean conditions" (wind and wave data, weather information), the results of seabed characterization studies, electric interconnection and grid data, and information about the impacts of a given project on both the physical environment and stakeholder interests. The compilation of this information entailed a massive undertaking, performed by the University and its research partners through a federal Department of Energy-funded grant.
This report dovetails with the Maine Public Utilities Commission’s request for proposals for long term contracts for deep water offshore wind energy pilot projects. That RFP calls for initial responses from interested developers by May 1, 2011. The RFP solicits proposals to sell renewable energy, capacity, and RECs from one or more floating deepwater offshore wind energy pilot projects, with a possible carveout for tidal projects. Last year's Ocean Energy Task Force bill gives the Maine PUC authority to approve one or more long term contracts for up to 30 megawatts of installed capacity and associated renewable energy and renewable energy credits from such projects.
Who will bid in response to the RFP? Will there be a truly competitive process? What will the responsive projects cost? Will the incentives for developing these pilot projects be sufficient to attract concrete proposals?
The report gives key data useful to any developer of a successful offshore wind project in the Gulf of Maine: data on "met-ocean conditions" (wind and wave data, weather information), the results of seabed characterization studies, electric interconnection and grid data, and information about the impacts of a given project on both the physical environment and stakeholder interests. The compilation of this information entailed a massive undertaking, performed by the University and its research partners through a federal Department of Energy-funded grant.
This report dovetails with the Maine Public Utilities Commission’s request for proposals for long term contracts for deep water offshore wind energy pilot projects. That RFP calls for initial responses from interested developers by May 1, 2011. The RFP solicits proposals to sell renewable energy, capacity, and RECs from one or more floating deepwater offshore wind energy pilot projects, with a possible carveout for tidal projects. Last year's Ocean Energy Task Force bill gives the Maine PUC authority to approve one or more long term contracts for up to 30 megawatts of installed capacity and associated renewable energy and renewable energy credits from such projects.
Who will bid in response to the RFP? Will there be a truly competitive process? What will the responsive projects cost? Will the incentives for developing these pilot projects be sufficient to attract concrete proposals?
December 8, 2010 - Deepwater Wind proposes expansion of Rhode Island Sound project
Wednesday, December 8, 2010
Renewable developer Deepwater Wind has announced today its plans to double the size of its proposed Rhode Island Sound offshore wind project. Under the current proposal, Deepwater's second-generation development will now consist of 200 turbines to be installed in federal waters off Rhode Island and Massachusetts. Deepwater hopes to commence construction of the project in 2014, bringing the first turbines into operation in 2015.
What price will Deepwater get for its power? Looking at other offshore wind projects is illustrative of the kinds of pricing we might expect. For example, Deepwater Wind is also developing a smaller 8-turbine demonstration project in Rhode Island state waters, the Block Island Wind Farm. The developer has already secured one major state approval to construct the project, although this approval is currently being challenged in state Supreme Court. The Rhode Island PUC has approved a contract with utility National Grid establishing a maximum starting price of 24.4 cents per kWh, with 3.5 percent increases over the the 20-year life of the deal.
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| A recent sunset over Maine's Merrymeeting Bay. |
September 8, 2010 - Maine ocean energy RFP
Wednesday, September 8, 2010
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| Backup diesel generators on Mount Desert Island, Maine. "Keeping the lights on" on island communities poses special challenges; diesel generators like these can be used to cover peak loads, or even provide backup power in the event of an outage. Photo courtesy of Drew Landry. |
Of all the feedback I hear from developers of renewable energy projects, one of the most consistent observations is that it is difficult to finance and build a project without a long-term contract for the project's output. Because energy prices are so volatile, and because projects are typically capital-intensive and can have relatively long payback periods, a long-term contract is often viewed as necessary to attract the financing required to build a project. However, many buyers observe that they aren't interested in long-term contracts at the required prices for similar reasons of uncertainty.
To remedy this problem, in its most recent session the Maine Legislature enacted "An Act To Implement the Recommendations of the Governor’s Ocean Energy Task Force", P.L. 2009, ch. 615. The Act directs the Maine PUC to issued an RFP for long-term contracts for deep-water offshore wind energy pilot projects and tidal energy demonstration projects. The RFP was published on September 1, 2010.
Here's a link to the MPUC's website for the RFP.
Here's the RFP itself (Word).
What is the Commission looking for? Up to 30 megawatts of installed capacity (and associated renewable energy and RECs) from deep-water offshore wind energy pilot projects or tidal energy demonstration projects; up to 5 of the megawatts can come from tidal energy demonstration projects.
Initial Proposals for deep-water offshore wind energy pilot projects and tidal energy demonstration projects will be due on or before May 1, 2011.
July 23, 2010 - no Senate energy bill for now; wind gets boosts
Friday, July 23, 2010
A bit of New Meadows eye candy:
Sure enough, the Senate climate bill is dead. Instead, we'll get a weak energy bill addressing the BP oil spill in the Gulf of Mexico, promoting building energy efficiency through the HomeStar program, and promoting the use of natural gas as a fuel for large trucks.
In Maine, the Fort Halifax dam removal saga continues. Prior to removal of this dam on the Sebasticook River, the town of Winslow, Maine and residents had voiced concerns about erosion, and had appealed (without success) the Department of Environmental Protection's orders approving dam removal. After the dam was removed, portions of the former impoundment's banks suffered severe erosion. The town had to spend over $725,000 to demolish six homes on Dallaire Street that were threatened by the newly eroded banks. The affected areas also included the river bank below the historic (mid-1700s) Fort Hill Cemetery, eroding the bank back much closer to the cemetery fence and grave sites. Former dam owner FPL Energy Maine Hydro commissioned a study of why this erosion happened. FPLE's study concluded that the dam removal and drawdown "did not play a significant role"; instead, the study pointed to unstable soils, steep slopes, heavy rain, and an earthquake. Both the town and the state expressed doubts about this conclusion. Now the town has officially asked the DEP to perform its own study, and to enforce the conditions in its dam removal order that require FPLE to monitor and remediate erosion.
The U.S. Senate Appropriations Committee has approved Susan Collins's request for $10 million in funding for the University of Maine's development, deployment and testing of deepwater and offshore wind turbines. The funding must now be approved by the full Senate, but the parallel House bill still lacks such an appropriation.
Wind is big in California too. It looks like Terra-Gen's Alta Wind Energy Center near Tehachapi is going forward, as it has placed an order with Vestas Wind Systems for 190 3 MW turbines. The Alta Wind project represents the largest financing of a North American wind-energy development to date. Part of the financial picture includes a 1,550 MW power purchase agreement with Southern California Edison for part of the project output. The project will have domestic economic benefits as well: Vestas will manufacture the blades in Windsor, Colorado, and most of the towers in Pueblo, CO.
A growing storm in the Gulf of Mexico has put BP's efforts at the oil well site on hold.
Sure enough, the Senate climate bill is dead. Instead, we'll get a weak energy bill addressing the BP oil spill in the Gulf of Mexico, promoting building energy efficiency through the HomeStar program, and promoting the use of natural gas as a fuel for large trucks.
In Maine, the Fort Halifax dam removal saga continues. Prior to removal of this dam on the Sebasticook River, the town of Winslow, Maine and residents had voiced concerns about erosion, and had appealed (without success) the Department of Environmental Protection's orders approving dam removal. After the dam was removed, portions of the former impoundment's banks suffered severe erosion. The town had to spend over $725,000 to demolish six homes on Dallaire Street that were threatened by the newly eroded banks. The affected areas also included the river bank below the historic (mid-1700s) Fort Hill Cemetery, eroding the bank back much closer to the cemetery fence and grave sites. Former dam owner FPL Energy Maine Hydro commissioned a study of why this erosion happened. FPLE's study concluded that the dam removal and drawdown "did not play a significant role"; instead, the study pointed to unstable soils, steep slopes, heavy rain, and an earthquake. Both the town and the state expressed doubts about this conclusion. Now the town has officially asked the DEP to perform its own study, and to enforce the conditions in its dam removal order that require FPLE to monitor and remediate erosion.
The U.S. Senate Appropriations Committee has approved Susan Collins's request for $10 million in funding for the University of Maine's development, deployment and testing of deepwater and offshore wind turbines. The funding must now be approved by the full Senate, but the parallel House bill still lacks such an appropriation.
Wind is big in California too. It looks like Terra-Gen's Alta Wind Energy Center near Tehachapi is going forward, as it has placed an order with Vestas Wind Systems for 190 3 MW turbines. The Alta Wind project represents the largest financing of a North American wind-energy development to date. Part of the financial picture includes a 1,550 MW power purchase agreement with Southern California Edison for part of the project output. The project will have domestic economic benefits as well: Vestas will manufacture the blades in Windsor, Colorado, and most of the towers in Pueblo, CO.
A growing storm in the Gulf of Mexico has put BP's efforts at the oil well site on hold.
June 14, 2010 - Maine roundup: offshore wind, and changes at the PUC
Monday, June 14, 2010
Maine Public Utilities Commission chair Sharon Reishus will be stepping down effective July 12, 2010. Governor Baldacci will name Commissioner Jack Cashman as Acting Commission Chairman. In a press release, the Governor said he expects to nominate a new PUC Commissioner to be confirmed by the Legislature during a Special Session to be held later this summer.
Federal Secretary of Energy Steven Chu is visiting Maine today. He is touring the University of Maine's Advanced Structures and Composites Center, where Habib Dagher and company are design and testing floating deep-water wind turbine platforms. This work will be supported by the $11 million bond Maine voters approved last week.
Federal Secretary of Energy Steven Chu is visiting Maine today. He is touring the University of Maine's Advanced Structures and Composites Center, where Habib Dagher and company are design and testing floating deep-water wind turbine platforms. This work will be supported by the $11 million bond Maine voters approved last week.
5/7/10: Cape Wind at 20.7 cents per kWh?
Friday, May 7, 2010
National Grid, one of the largest public utilities serving Massachusetts customers, has agreed to buy electricity from the 130-turbine Cape Wind near-shore wind project in Nantucket Sound. The Boston Herald reports that National Grid has signed a 15-year contract to pay 20.7 cents per kWh -- more than twice the typical market rate for power in New England. The contract provides that the price will escalate 3.5% annually.
As the offshore (or near-shore) wind market becomes a reality, I'm watching with interest (watching might be too passive a word; perhaps "getting involved" makes more sense) as the market seeks price equilibrium. Remember that just over a month ago, the Rhode Island PUC rejected a proposed contract between NGrid and the proposed Deepwater Wind project off Block Island, largely on the grounds that the contract was too expensive. Admittedly, the proposed Deepwater contract had a higher price tag: 24.4 cents per kWh, escalating 3.5% annually for 20 years to a final price of 48.6 cents per kWh. Even that higher price, which NGrid had asked the PUC to approve, was lower than the original Deepwater proposal that NGrid rejected in October 2009.
It's clear that developing offshore wind still costs significantly more than traditional energy resources, at least under current regulatory regimes and fuel costs. (In fact, offshore wind costs significantly more than some other renewable resources, like hydro and onshore wind.) Just because something costs more doesn't mean that it isn't a good deal, or that customers shouldn't have to pay for it. But on the policy level, how will we decide how much is too much?
As the offshore (or near-shore) wind market becomes a reality, I'm watching with interest (watching might be too passive a word; perhaps "getting involved" makes more sense) as the market seeks price equilibrium. Remember that just over a month ago, the Rhode Island PUC rejected a proposed contract between NGrid and the proposed Deepwater Wind project off Block Island, largely on the grounds that the contract was too expensive. Admittedly, the proposed Deepwater contract had a higher price tag: 24.4 cents per kWh, escalating 3.5% annually for 20 years to a final price of 48.6 cents per kWh. Even that higher price, which NGrid had asked the PUC to approve, was lower than the original Deepwater proposal that NGrid rejected in October 2009.
It's clear that developing offshore wind still costs significantly more than traditional energy resources, at least under current regulatory regimes and fuel costs. (In fact, offshore wind costs significantly more than some other renewable resources, like hydro and onshore wind.) Just because something costs more doesn't mean that it isn't a good deal, or that customers shouldn't have to pay for it. But on the policy level, how will we decide how much is too much?
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