Library filed under Taxes & Subsidies from Rhode Island
Before we become too hopeful about the prospects of using offshore wind power as a fuel source of the future, let’s not forget that government data shows that offshore wind power cannot survive in a competitive environment without huge taxpayer subsidies.
With the focus on project completion, Grybowski says the company's top priority is ensuring that Deepwater is able to satisfy the 5% safe-harbor provision to qualify for the investment tax credit. Among other requirements, developers must incur 5% of the project's cost by Dec. 31 to be eligible for the tax incentive. To satisfy the U.S. Treasury's 5% spend threshold, Deepwater plans to use a combination of "historical expenditures" and contracts signed with vendors until the end of the year.
The case being pursued by the Division of Public Utilities and Carriers could have far-reaching implications for clean energy in Rhode Island. Portsmouth could be asked to accept a lower price for its electricity. And for other municipalities that are trying to follow that town's lead it could mean that investing in green power will not be as financially attractive as once thought.
In a Jan. 3 memo to the Council, Town Administrator Bruce Keiser said his discussions with several consultants confirm that "the bridge may create turbulence that will influence power production to some unknown degree. This variable was not accounted for in the wind feasibility study but must be evaluated." The memo also notes that "the town's consultant to the Wind Energy Committee had proposed that on-site wind measurements should be taken.
TransCanada argues that the Rhode Island law governing renewable-power contracts violates the Commerce Clause in the U.S. Constitution because it favors in-state projects. The law, enacted a year ago, discriminates against out-of-state energy producers and thereby restricts interstate commerce, says TransCanada.
National Grid has agreed to pay Deepwater Wind the same price previously negotiated for electricity from a wind farm planned in waters off Block Island but, in a new contract proposal filed with state regulators on Wednesday, the two sides left open the possibility of a lower price.
Deepwater Wind is planning an eight-turbine project in Rhode Island state waters, near Block Island. The company reached a power purchase agreement last month with National Grid - the utility agreed to pay 24.4 cents per kilowatt hour for electricity from the wind farm. ...William Short told the Public Utilities Commission that the proposed wind farm was too small to be commercially viable.
"The data for other offshore wind projects are sparse," said a consultant for National Grid in testimony prepared for the Rhode Island Public Utilities Commission. Nevertheless he dug up what cost data he could about offshore wind farms, mostly in Europe. The bottom line is that the prices in the Deepwater Wind/National Grid contract, announced last week by Gov. Donald Carcieri, are apparently the highest in the world for offshore power.
The main point of contention in the contract talks between National Grid and Deepwater Wind is the price of electricity generated by the proposed wind farm off Block Island. Deepwater has quoted a price of between 20 and 25 cents per kilowatt-hour. National Grid has calculated the cost, with adjustments over time, to be closer to 30.7 cents per kilowatt hour. Either price is much higher than the 9.2 cents per kilowatt-hour that National Grid pays for power mainly from natural gas plants. So far, the utility has refused to pay the higher cost for wind energy, saying it's simply too much.
An amendment to a state renewable energy law is expected to encourage wind and solar power by making it easier for projects to be paid when they produce more electricity than they use. The amendment, signed by Governor Carcieri this month, reduces restrictions on a law enacted last year that for the first time in Rhode Island allowed "net metering." The law was designed to compensate green energy producers for surplus electricity they pump back into the power grid.
PORTSMOUTH — The town has received approval to borrow up to $2.6 million in Clean Renewable Energy Bonds to finance the proposed purchase and installation of one or two wind turbines at the public middle and high schools to offset their use of electricity.
PORTSMOUTH — The town has received approval to borrow up to $2.6 million in Clean Renewable Energy Bonds to finance the proposed purchase and installation of one or two wind turbines at the public middle and high schools to offset their use of electricity. The town received permission last week from the Internal Revenue Service to issue the interest-free bonds as part of a program created under the federal Energy Tax Incentives Act of 2005. The IRS has approved the borrowing of $800 million in bonds by 610 renewable energy projects across the country.
...the MEA Report can be used to estimate the value (avoided emissions) of Renewable Energy Certificates (REC) by providing both REC suppliers and stakeholders with information that can be used to communicate the environmental benefits of RECs and works to enhance the overall REC marketplace. Editor's Note: As noted below under Methodology [emphasis added], this report appears to substantiate the point that wind energy would not backdown "baseload" generation.