Join 3,556 readers in helping fund MetaFilter (Hide)


Deepwater
December 19, 2010 9:06 PM   Subscribe

Two years ago, Deepwater Wind proposed a wind farm off the shore of Block Island, Rhode Island which would have been the country's first offshore wind farm. Ever since, one legal battle after another has brought the project all the way to the Rhode Island Supreme Court.

Rhode Islanders have had mixed feelings about the project. The main bone of contention: Deepwater's rates - an increase from 9.5 cents per kilowatt hour to 24.4 cents.
Many legislators argued that the project would put Rhode Island on a path to energy independence and prove a long-term financial boon to the state. Some, however, expressed concern that the legislation would place an onerous burden on taxpayers to the benefit of a single entity — Deepwater Wind.
Deepwater counters that in the long run, electricity rates will drop - wind farms have high capital expenses but no fuel costs, which could bring rates down over time. But just weeks ago, the Conservation Law Foundation - currently working with state Attorney General Patrick Lynch, challenging the legality of the deal, told reporters:
"CLF supports renewable energy in general, and especially supports offshore wind for Block Island. But renewable energy is so important for our state that it must be done right — with fair rules, known in advance, that apply to all renewable energy developers equally. The Deepwater contract in this case was a backroom deal that benefits one developer only but does not help us get a strong renewable energy future."
Nonetheless, Deepwater applied to federal authorities earlier this month to expand the project, and Rhode Island Governor-elect Lincoln D. Chafee remains cautious.
posted by Marisa Stole the Precious Thing (26 comments total) 2 users marked this as a favorite

 
This changes the picture, somewhat:
Since the Block Island project is small – eight turbines at most – it will only be providing 1 percent of the state's electricity, so 99 percent of Rhode Island's electricity will still be coming from cheaper sources, like natural gas and nuclear power, even when the wind farm is up and running. The Deepwater contract will increase the typical monthly residential bill for electricity by $1.35, or $16.20 per year, according to National Grid. That's for a household that uses 500 kilowatt-hours of electricity per month.
I pay for 100% wind (via land turbines in Appalachia) and it's 15c versus 10c for coal. I know off-shore costs more to install, but it also generates more electricity and thus costs less in the long term.
posted by stbalbach at 9:32 PM on December 19, 2010


My family spends a lot of time each summer at Block Island, and the talk about it seems to usually boil down to them being an eyesore and making an idyllic view slightly less idyllic.
posted by QuarterlyProphet at 9:38 PM on December 19, 2010


No fuel costs but those turbines are exposed to salt water and weather. What's the maintenance cost for these things. Also seems like the project suffers from the thing that gets in the way of many green projects, that is the scale is too small so the costs don't work out.
posted by humanfont at 9:47 PM on December 19, 2010


> What's the maintenance cost for these things.

Europe has been building massive offshore windpower for the last decade. If it didn't work they wouldn't be building ever-bigger projects, so I assume the economics can work.

> the scale is too small so the costs don't work out.

It sorta works. They are mixing the wind power with other fuels and charging the end-user a blended rate. No end user is buying 100% wind, all are buying 1% wind and 99% coal/nuclear/gas. Over time as the technology improves, as scales get bigger, the costs come down and the mix is changed to more and more green.
posted by stbalbach at 11:41 PM on December 19, 2010


Ugh, NIMBY morons.
posted by delmoi at 11:45 PM on December 19, 2010 [3 favorites]


While Republican, Chafee is a generally smart, fair and honest person with a strong progressive record for a right-winger — perhaps a stronger track record of support for progressive issues, including renewable energy, than most Democrats.

If he has reviewed the project and is cautiously optimistic about it, odds are that it's probably a good thing.
posted by Blazecock Pileon at 12:13 AM on December 20, 2010


While Republican, Chafee is a generally smart, fair and honest person with a strong progressive record for a right-winger — perhaps a stronger track record of support for progressive issues, including renewable energy, than most Democrats.

He's actually an Independent, but the rest of your sentence is exactly why I voted for him.
posted by CitrusFreak12 at 12:17 AM on December 20, 2010 [1 favorite]


This isn't a "is offshore windpower good or bad" issue it's a "shitty private-public infrastructure deal" issue. Ignore what it is they are proposing to build. We could build something at size X that will have costs y, and require us to ask for tariff z, and that allows us to generate a return for our investors that we think is acceptable. So in the case of cape wind its 18.7 cents a Mwh, but because Deepwater is so much smaller its 24.4 cents an hour. So why is deepwater smaller? it sounds like its smaller because the developer is capital constrained. If wind were not a subsidized power source you would never even contemplate a project like this, but because of how the system works basically the developer gets to minimize his risk while ensuring himself a reasonable return. So really Rhode Island should be demanding they upsize the project or abandon it. I may not be explaining this well, but basically its bankers pulling one over on people again.

The point about wind getting cheaper over time is true, but that doesn't mean this project will get cheaper. The capital costs are what the capital costs are. Its future projects that benefit from the experience of building new projects. If deepwater were building out a bigger farm and using this as a first stage, and promising much lower pricing on the next stages then the math is more interesting. But it doesn't sound like this is the case.
posted by JPD at 1:30 AM on December 20, 2010 [2 favorites]


Basically RI needs to make the tariff on the BI project dependent upon completion of the much bigger project proposed for further offshore. Although I don't really understand the point of the smaller project.
posted by JPD at 1:50 AM on December 20, 2010


Ugh, NIMBY morons.

Is this post mandatory in every wind power thread, regardless of the OP's tack?
posted by fairmettle at 3:37 AM on December 20, 2010 [2 favorites]


Is this post mandatory in every wind power thread, regardless of the OP's tack?

Yes. Because that is the motivation of anti-wind people.
posted by gjc at 4:18 AM on December 20, 2010 [2 favorites]


I just wonder if it might make more sense to underwrite a bigger project, or simply redirect the funds to conservation and efficiency programs (eg replace bulbs, appliances and weatherize).
posted by humanfont at 4:23 AM on December 20, 2010


> If wind were not a subsidized power source

There are sources which aren't?
posted by scruss at 4:29 AM on December 20, 2010 [1 favorite]



There are sources which aren't?


oh please - aren't you in the wind business? you know exactly what I meant by that, and nothing in my comment could possibly be construed as anti-wind. It's an example of someone taking advantage of a well intentioned subsidy regime. I'm not objecting to the subsidy Indeed my point was a bigger windfarm is better.
posted by JPD at 4:58 AM on December 20, 2010


The main bone of contention: Deepwater's rates - an increase from 9.5 cents per kilowatt hour to 24.4 cents

What's the going rate for Rhode Island Supreme Court, nowadays?
posted by StickyCarpet at 5:43 AM on December 20, 2010


>>Is this post mandatory in every wind power thread, regardless of the OP's tack?

>Yes. Because that is the motivation of anti-wind people.


It is funny how there are a lot of people who are super environmental and super pro-renewable energy... right up until they might have to look at it.
posted by Forktine at 5:50 AM on December 20, 2010


Good god I'd actually pay someone to put a wind generator somewhere I could see it out my window, the big ones are gorgeous! (Not that Queens is a hotbed of wind activity but still).
posted by Skorgu at 6:58 AM on December 20, 2010


I'm with Skorgu. I'm sure in 50 years, the windfarm calendars will be right next to the windmill calendars (in the same row with the lighthouse calendars). Assuming we still use paper calendars other than the little Far-Side-a-day ones.
posted by Eideteker at 7:38 AM on December 20, 2010


It sounds to me like the local government may have come up with the wrong upfront mechanism to defray the initial high capital costs of offshore wind. Since offshore wind will potentially provide a significant public good (energy without CO2, possibly at comparatively low prices at some future date and with inproved security of supply) then there is a case for subsidy. However, a key lesson of the RE policy experience is that the right mechanism must be applied at the right time to drive deployment and that it must take into account the cost AND value to the public purse. There is a lot of evidence that the tariff mechanism is the cheapest way to drive forward expansion of RE capacity, with a body of evidence that it is cheaper than the main alternative, the quota or RPS mechanism used across the US and in some EU states. This evidence in favour of the tariff is convincing enough that even the IEA buys into it. However, this mechanism is proven at the level of near commercial technology; there remains an argument that technologies not at that stage of commercial maturity (and in North America offshore wind is less commercially mature) that support might more effectively be applied via other routes. Offshore wind costs more to build anywhere than a similar onshore wind farm. Since this would have been the first US offshore wind farm then there is added risk attached to its development since it is not possible to accurately estimate the actual costs. This added risk justifies added support since it will further drive up capital costs. (Identification of real costs can also be regarded as one of the policy goals of providing support for an early stage offshore wind far, it allows for design of better policy instruments with less scope for overor underpayment.) This provides a real additional benefit and provides a public benefit justification for additional support.

Since the bulk of the additional costs will tend to accrue at the construction phase then there is a strong argument that they might be better (ie more cost effectively) delivered through one off capital grants with a lower rather than a long term enhanced tariff. This will effectively mean the government is helping to reduce the upfront debt rather than providing long term assistance in treating the debt. So extra support is justified but it may be (you would need figures to know) that this was not the right way to provide it.


Yes. Because that is the motivation of anti-wind people.

I disagree, the motivations of anti-wind protestors tend to be mixed and it is in the interests of those trying to develop wind to make an effort to understand these motivations in order to better engage with concerns and develop capacity such that it enjoys the more widespread support of a greater representation of society. Too often NIMBY is a pejorative term applied to shut down the debate as to the value of landscape. It is far better to have a policy of engaging with local populations to talk about local benefit than it is to go in slinging mud. There is a fair amount fo research laying out the argument for this, unfortunately most of it behind pay walls, but try this.
posted by biffa at 8:31 AM on December 20, 2010


The Deepwater Plan has been increased to 1 GW, which is not a small windfarm, in fact a large windfarm, about the same size as a nuclear power plant. It would be 30 or 40 miles offshore and thus not visible from land. So a bunch of the arguments in this thread seem moot?
posted by stbalbach at 9:29 AM on December 20, 2010


The Deepwater Plan has been increased to 1 GW, which is not a small windfarm, in fact a large windfarm, about the same size as a nuclear power plant. It would be 30 or 40 miles offshore and thus not visible from land. So a bunch of the arguments in this thread seem moot?


It isn't clear from the post if we are talking about the larger, further offshore farm, or the closer in sub-scale farm. I think there are still two installations planned.
posted by JPD at 9:34 AM on December 20, 2010


JPD: "It isn't clear from the post if we are talking about the larger, further offshore farm, or the closer in sub-scale farm."

It's actually in the "to expand the project" link.
posted by Marisa Stole the Precious Thing at 12:37 PM on December 20, 2010


Yes but is the debate in RI about the larger project or the BI project. As I understand it there are still two projects.

(it would seem building the larger project is the way to go, and not wasting ratepayers money on the smaller project)

Deepwater is also considering using larger turbines in a demonstration project the company is developing in state waters off Block Island, said Moore. Instead of the originally proposed eight turbines, the company is now looking at installing only five turbines as part of the wind farm planned about three miles southeast of the island.

That project is scheduled to go on line in 2012. It is still awaiting approvals from Rhode Island authorities. Although state regulators signed off on an agreement Deepwater reached with utility National Grid for the sale of power from the wind farm, the contract has been appealed to the state Supreme Court. Objectors have questioned the contract’s high price of power, which is more than double what National Grid pays for energy from conventional sources.

The Deepwater Wind Energy Center would be more cost-effective than the Block Island wind farm, said Moore. That is expected to translate into prices that would be a third lower than the rate of 24.4 cents per kilowatt-hour that National Grid agreed to pay for power from the Block Island project, he said.


posted by JPD at 1:09 PM on December 20, 2010


Ugh, NIMBY morons.

Yes, and no. I'm all for wind power, but damn are the farms ugly and always in a great spot where generations of people have invested their livelihoods. It's no different than having power lines installed in front of your home.
posted by jsavimbi at 1:40 PM on December 20, 2010


> nothing in my comment could possibly be construed as anti-wind

Except, y'know, the "shitty private-public infrastructure deal" bit. There aren't many wind farms being built with public money — more's the pity — and I dislike sole source private deals immensely. But RI should've been sharper on the details of the deal before it signed it. At any rate, the 9.5¢ would be barely workable on land.

It's pretty common to build a small pilot project slightly inshore of a planned larger project. Sounds like they're planning to use new(ish) machines and novel foundation technology. There's no way in hell anyone — public or private — would fund the large project without knowing that the basic tech was good. And really, the only way to do that is have a few years of operational data.
posted by scruss at 7:00 PM on December 21, 2010


You utterly missed the point of that comment if you think it was a commentary on wind in general as a bad public private investment. If this were a toll road or a parking garage the argument would be exactly the same. But you know don't get your own evangelism get in the way of actually reading what I said.. The last thing in the world your industry needs is people doing bad deals that 10 years from now anti-alternative energy people can use to argue against developing new incentive regimes.

90% of the wind farm developers I've met (and granted there is very meaningful sample bias in that # for reasons that I won't go into - but it does include the largest developers in the US) were guys who cut their teeth doing gas fired IPP deals for Enron and Dynegy -- a cohort that has the moral scruples of a rabid squirrel so naturally I always operate under the assumption they are trying to get something over on people.
posted by JPD at 5:05 AM on December 22, 2010


« Older A 3 hour podcast interview (part 2 here) with Brit...  |  Right Wing astroturfing... Newer »


This thread has been archived and is closed to new comments