Library filed under Impact on Economy from Rhode Island
Some of Rhode Island's largest users of electricity have come out for the first time in opposition to a proposed power-purchase agreement between National Grid and the developer of an eight-turbine wind farm in waters off Block Island. ..."We have concluded that this contract includes a price that is so high that it more than negates any other potential attractive features."
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.
Energy expert William Short submitted this testimony to the Rhode Island Public Utilities Commission in reference to the State's review of a power purchase agreement negotiated between Deepwater Wind Block Island, LLC and the utility Narragansett Electric Company. Deepwater Wind proposed a pilot offshore wind project with initial energy costs of 24.4 cents a kilowatt hour ($244 a megawatt hour). Mr. Short explains in detail how energy costs far exceed the project's claimed monetary benefits. His conclusion is excerpted below. The full testimony, including exhibits, can be downloaded via the links at the bottom of the page. The PUC voted to disapprove the agreement.
I noticed the other week that Deepwater Wind is looking to renegotiate its contract to supply power from its proposed phase one offshore-wind project. As a veteran developer of wind projects and one who worked on an alternative bid to the Deepwater project, all I want to say is I told you so.
After two months of talks, National Grid Plc said Wednesday it still has not agreed on a contract to purchase electricity from the first of Deepwater Wind LLC's two proposed offshore wind farms. Although it was the second time in recent weeks the state's dominant utility rejected an offer from Hoboken, N.J.-based Deepwater, an executive with the company said the filing with the R.I. Public Utilities Commission (PUC) may not stop the project from moving forward.
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.
Council is poised to hire Richard La Capra of La Capra Associates to serve as consultant regarding Deepwater Wind's proposed wind farm installations near Block Island and its potential effects on island electricity ratepayers. The council will take a formal vote on a contract at its Tuesday meeting, First Warden Kim Gaffett said Wednedsay. La Capra's scope of service will also be outlined at that meeting.
A portion of the wind energy generated from newly installed wind turbines located in PEI was wheeled through PEI and New Brunswick and sold to the New England Power Pool (NEPOOL) via the international interconnection node in Keswick, N.B. The renewable energy certificates (RECs) that were generated from this transmission were sold separately to independent buyers located in the NEPOOL.