Citizens' Task Force on Wind Power - Maine
Rhode Island Energy-SouthCoast Wind PPA # 6
Rhode Island Energy, for the fifth time since 2023, has a goal of a PPA, an offshore wind power purchase agreement, by November 1, 2025. A sixth date has not been set yet.
- Power purchase agreements (PPA) enable the purchase of clean energy from a power generation facility directly, in this case, SouthCoast Wind.
Why announce the project power agreement completion dates, and at what point do the postponements become an embarrassment for everyone, including the news media?
The agreement is one in which SouthCoast Wind installs, owns, and operates an energy system and then sells its electric output to RI Energy for a predetermined period. PPAs are advantageous because they allow customers to receive stable and low-cost electricity with no upfront cost, and they enable the energy system’s owner to take advantage of "tax credits" while also receiving income from the electricity.
The World Economic Forum reported that power purchasing agreements rose 35 percent in 2024. The reason given is the need for power in the tech industry and advances in artificial intelligence.
Supply chain & inflation: Wind turbines and battery storage have increased due to global supply chain disruptions and general inflation. These higher development costs are passed on to the buyer through higher PPA prices.
Political policy uncertainty: Shifting political policies, tariffs, and changes to tax credits create a risk premium for developers. To hedge against this uncertainty, they need to raise PPA prices, and those costs are reflected in the postponed contracts.
An antique electric grid constraint. The existing transmission infrastructure is not ready to handle large-scale offshore wind renewable energy projects. For example, the cost of ocean wind submarine cables, onshore infrastructure, battery backup, and electric substations outweighs the turbine purchase price.
In 2023, Massachusetts allowed SouthCoast Wind to walk away from the signed PPA contracts. The Massachusetts Department of Public Utilities required SouthCoast to pay 60 million in termination fees. Those remain postponed with a due date of December 2025.
Past power purchase agreements suggest that the era of saving customers money through PPAs may be coming to an end.
With each announcement of a new power purchase agreement date, these agreements face higher costs. The only way to achieve an agreement today is with government credits, which looks doubtful in the current political climate
A utility company that relies on these higher-cost agreements impacts their bottom line, which ends up on Jill and Joe's electric bill.
Willem Post
Low-cost offshore wind electricity has never been true.
The price/kWh has always been much higher than existing traditional fossil, and reservoir hydro, and nuclear, and burning trees.
Then you have to add all the costs of dealing with the variable electricity output on shore, which is about 11 c/kWh from wind system to hazardous waste landfill.
21 hours ago