Wind energy could get cheaper with newer, bigger projects

Source: By Jon Chesto, Boston Globe • Posted: Sunday, March 20, 2016

The offshore wind industry’s efforts to distance itself from Cape Wind continued this week as the University of Delaware released a report showing offshore wind energy in New England would be far less costly under projects that are newer and bigger than Cape Wind.

The report, conducted by the university’s Special Initiative on Offshore Wind, found that prices for electricity purchased from large-scale offshore wind farms could be 33 percent less than previous offshore wind contracts in New England by 2023. That differential could drop to as much as 55 percent by 2029 as the infrastructure to support the industry is developed here.

“The prices get lower than we expected at that end point,” said Willett Kempton, an author of the study.

The potential savings would come because newer wind farms would rely on larger, more cost efficient turbines than those proposed for Cape Wind. Though not yet built, that project is permitted for an older kind of turbine.

The report’s authors used previous long-term contracts signed by two big utilities for Cape Wind’s power as a primary reference point, along with a contract to buy power from a five-turbine wind farm off Block Island. Cape Wind, a 130-turbine project planned for Nantucket Sound, lost its contracts early in 2015 and remains stuck in the financing stage, while the smaller Block Island project is already under construction.

Meanwhile, three wind farm developers with rights to sections of the ocean south of New England hope the state Legislature approves a bill that will spur utilities to enter into new long-term contracts for offshore wind. Cape Wind president Jim Gordon is also waiting to see if his project can be revived under the new legislation. House Speaker Robert DeLeo’s leadership team is expected to include language for the offshore wind industry in an energy bill that will be released within the next month.

The new report, funded by the John Merck Fund and the Rockefeller Brothers Fund, was released to coincide with this debate on Beacon Hill. The University of Delaware’s offshore wind project, and the foundations that back it, also funded a $38,000 trip for a group of Massachusetts legislators last year to check out Denmark’s offshore wind industry.

There’s no way to know what overall electricity prices will be more than a decade from now. Rate stability — the ability to lock in power prices through long-term contracts with wind farm owners — will be one of the selling points that pro-wind lobbyists will use to argue why the industry needs special legislation.

Then there are the environmental benefits. Jack Clarke, director of government relations for the Massachusetts Audubon Society, said offshore wind’s environmental and health benefits outweigh the upfront costs.

“They may cost more per kilowatt hour now,” Clarke said. “But in the long run, they save money in terms of cleaner air … and addressing climate change issues.”

Jon Chesto can be reached at Follow him on Twitter @jonchesto.