Block Island, R.I.Residents Fall For Wind Turbine Story Second Time

Comment

Comment by Willem Post on May 20, 2017 at 12:42pm

Frank,

A VERY EXPENSIVE OFFSHORE WIND ENERGY FOLLY IN NEW ENGLAND

 

With big enough wings (subsidies), even pigs can be made to fly. Look at this offshore wind energy folly, right here in New England.

http://www.windtaskforce.org/profiles/blogs/a-very-expensive-offsho...

 

The Block Island Wind Farm, after many years of dithering, became operational in late 2016. It is located 3.8 miles east of Block Island, Rhode Island. It has five wind turbines, each with a capacity of 6 megawatt. Each turbine is about 589 feet tall.

 

The annual wind energy production would be about 105,000 megawatt-hour, at a capacity factor of 0.40. The estimated useful service life is about 25 years. Turnkey project cost is about $290 million, or $9.67 million/MW, which is outrageously high. 

 

Quick Estimate of Energy Cost: If the major costs of 25-year financing, a return on investment, operation and maintenance, and replacements were ignored, the cost of energy production, just to return the capital, would be about $290 million/(20 y x 105,000 MWh/y) = 13.8 cents per kilowatt-hour.

 

If these costs were not ignored, the cost of energy would be at least 20 cents. That would be about the price charged to utilities under a long-term power purchase agreement, PPA. This energy would be variable and intermittent, i.e., no wind, no energy.

 

Other generators, likely gas-fired, would be required to provide supplementary energy on a year-round basis, i.e., do the peaking, filling-in and balancing, which degrades their efficient operation. This efficiency degradation increases as more wind energy is added to the grid.

http://www.windtaskforce.org/profiles/blogs/fuel-and-co2-reductions...

 

Actual Energy Cost: The actual PPA, calls for 24.4 cent the first year, increasing at 3.5% per year for 20 years, i.e., 48.6 c/kWh in the 20th year, plus utility mark up of about 10 c/kWh, plus taxes, surcharges and fees*.

 

* For comparison, the Cape Wind PPA calls for 18.7 cents, increasing at 3.5% per year for 20 years, i.e., 37.2 c/kWh in the 20th year, plus utility mark up of about 10 c/kWh, plus taxes, surcharges and fees. 

 

These numbers are at least triple of any offshore wind energy PPA pricing in Europe. Those are sweetheart deals by any standard. 

 

NOTE: New England wholesale prices have averaged about 5 cents for dispatchable, steady, electricity for the past 5 years, thanks to low-cost, clean, low-CO2 emitting, domestic natural gas and nuclear energy.

http://www.platts.com/latest-news/electric-power/charlottesville-vi...

 

NOTE: These high costs exist despite about 30% of the capital cost (0.3 x 290 = $87 million) being a federal, up-front, cash gift to owners. Such cash gifts are typically used to offset any federal taxes due on other investments. It looks like those owners are making an extremely high return on their investment, all at the expense of other ratepayers and taxpayers.

 

Capital and Electricity Cost of European Offshore Wind: In Europe, the turnkey capital cost of offshore wind turbine plants has been steadily increasing from about $2000/kW in 2000 to about $5500/kW in 2015, and projections are about $5000/kW during the 2015 - 2020 period. At the median installed cost of $5000/kW, and interest rate* at 8%/y, and 20-year life, and 9 m/s wind speed, the generation costs are about $192/MWh. That is about 4 times the US and New England wholesale price of electricity which has been a steady $45 to $50 per MWh for at least the past 5 years.

http://www.windpowermonthly.com/article/1380738/global-costs-analys...

 

* In this case, interest rate is not the interest charge and other financing charges on loans from financial entities, but the net return on investment the owners of the wind turbine plant aim to achieve.

 

Multi-Millionaire Owners: The wind turbine power plant is owned by Deepwater Wind LLC, a part of the D. E. Shaw Group, a global investment and technology firm with $38 billion of invested capital as of July 1, 2016. Multi-millionaires put up the capital and expect high, mostly tax-free returns.

 

The US Congress, under pressure of Wall Street, passed tax laws favorable to wind energy to make such tax-free returns possible.

 

Various government agencies performed studies with dire climate change predictions, and/or gave grants to “independent” entities to make studies with similar predictions, to convince the public the end of the world will be near, unless....

 

Publications, such as the New York Times and Wall Street Journal, write mostly favorable articles about offshore wind. The public is told all of it done to save the world.

 

Warren Buffett, considered one of the outstanding investors of all-time, has stated: “On wind energy, we get a tax credit if we build a lot of wind farms.  That’s the only reason to build them. They don’t make sense without the tax credit.”

 

More Energy From H-Q a Much Better Alternative: There is a much better and less costly alternative. A much larger quantity of energy could be bought from Hydro-Quebec at a cost to utilities of about 7 cents, with adjustments based on New England wholesale energy prices.

 

That energy would have much less CO2 emissions per kilowatt-hour than wind energy, and would be a steady, year-round supply, wind or no wind.

 

A 1,000-megawatt transmission line, costing about $2.0 billion, could supply to Massachusetts and Rhode Island about 6.5 million megawatt-hour of steady, year-round energy, at least sixty times at much as the above wind turbine system, mostly supplied by French and Norwegian contractors.

 

http://www.windtaskforce.org/profiles/blogs/more-energy-from-hydro-...

http://www.windtaskforce.org/profiles/blogs/increased-canadian-hydr...

 

Based on the above, it would be a huge folly to overburden New Englanders and the NE electric grid with such very expensive, low-quality energy.

 

Let us hope so-called policy makers come to their senses before it is too late.