Vineyard Wind paid for guaranteeing future electricity production?
The nation’s first major offshore wind farm, the under-construction Vineyard Wind off Massachusetts, has shown up in an important, if obscure, location.
The project is one of more than 900 energy providers of various types who won bids to receive payments in the annual forward capacity auction, which is used by ISO-New England to ensure that there will be enough electricity to meet regional demand in three years. Bidders receive payments in return for guaranteeing they can produce a certain amount of power on demand.
Vineyard Wind isn’t the first offshore wind farm to be in New England’s capacity auction; Block Island Wind off Rhode Island has been in the program for several years. But when its construction is finished, probably this year, Vineyard Wind will be more than 25 times the size of Block Island, marking America’s long-overdue entry into the global offshore-wind industry.
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Comment by Willem Post on February 24, 2024 at 10:38am
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APPENDIX 1
Floating Offshore Wind Systems in the Impoverished State of Maine
https://www.windtaskforce.org/profiles/blogs/floating-offshore-wind...
World Offshore Wind Capacity Placed on Operation in 2021
During 2021, worldwide offshore wind capacity placed in operation was 17,398 MW, of which China 13,790 MW, and the rest of the world 3,608 MW, of which UK 1,855 MW; Vietnam 643 MW; Denmark 604 MW; Netherlands 402 MW; Taiwan 109 MW
Of the 17,398 MW, just 57.1 MW was floating, about 1/3%
At end of 2021, 50,623 MW was in operation, of which just 123.4 MW was floating, about 1/4%
https://www.energy.gov/eere/wind/articles/offshore-wind-market-repo...
Despite the meager floating offshore MW in the world, pro-wind politicians, bureaucrats, etc., aided and abetted by the lapdog Main Media and "academia/think tanks", in the impoverished State of Maine, continue to fantasize about building 3,000 MW of 850-ft-tall floating offshore wind turbines by 2040!!
Maine government bureaucrats, etc., in a world of their own climate-fighting fantasies, want to have about 3,000 MW of floating wind turbines by 2040; a most expensive, totally unrealistic goal, that would further impoverish the already-poor State of Maine for many decades.
Those bureaucrats, etc., would help fatten the lucrative, 20-y, tax-shelters of mostly out-of-state, multi-millionaire, wind-subsidy chasers, who likely have minimal regard for:
1) Impacts on the environment and the fishing and tourist industries of Maine, and
2) Already-overstressed, over-taxed, over-regulated Maine ratepayers and taxpayers, who are trying to make ends meet in a near-zero, real-growth economy.
Those fishery-destroying, 850-ft-tall floaters, with 24/7/365 strobe lights, visible 30 miles from any shore, would cost at least $7,500/ installed kW, or at least $22.5 billion, if built in 2023 (more after 2023)
See below Norwegian floating offshore cost of $8,300/installed kW
Almost the entire supply of the Maine projects would be designed and made in Europe, then transported across the Atlantic Ocean, in European specialized ships, then unloaded at a new, $450-million Maine storage/pre-assembly/staging area, then barged to European specialized erection ships, for erection of the floating turbines. The financing will be mostly by European pension funds.
About 300 Maine people would have pre-assembly/staging/erection/barging jobs, during the erection phase
The other erection jobs would be by specialized European people, mostly on cranes and ships
About 100 Maine people would have long-term O&M jobs, using European spare parts, during the 20-y electricity production phase.
https://www.maine.gov/governor/mills/news/governor-mills-signs-bill...
The Maine woke bureaucrats are falling over each other to prove their “greenness”, offering $millions of this and that for free, but all their primping and preening efforts has resulted in no floating offshore bids from European companies
The Maine people have much greater burdens to look forward to for the next 20 years, courtesy of the Governor Mills incompetent, woke bureaucracy that has infested the state government
The Maine people need to finally wake up, and put an end to all the climate scare-mongering, which aims to subjugate and further impoverish them, by voting the entire Democrat woke cabal out and replace it with rational Republicans in 2024
The present course leads to financial disaster for the impoverished State of Maine and its people.
The purposely-kept-ignorant Maine people do not deserve such maltreatment
Electricity Cost: Assume a $750 million, 100 MW project consists of foundations, wind turbines, cabling to shore, and installation at $7,500/kW.
Production 100 MW x 8766 h/y x 0.40, CF = 350,640,000 kWh/y
Amortize bank loan for $525 million, 70% of project, at 6.5%/y for 20 years, 13.396 c/kWh.
Owner return on $225 million, 30% of project, at 10%/y for 20 years, 7.431 c/kWh
Offshore O&M, about 30 miles out to sea, 8 c/kWh.
Supply chain, special ships, and ocean transport, 3 c/kWh
All other items, 4 c/kWh
Total cost 13.396 + 7.431 + 8 + 3 + 4 = 35.827 c/kWh
Less 50% subsidies (ITC, 5-y depreciation, interest deduction on borrowed funds) 17.913 c/kWh
Owner sells to utility at 17.913 c/kWh
NOTE: If li-ion battery systems were contemplated, they would add 30 to 50 c/kWh to the cost of any electricity passing through them, during their about 15-y useful service lives! See Part 1 of URL
https://www.windtaskforce.org/profiles/blogs/battery-system-capital-costs-losses-and-agingNOTE: The above prices compare with the average New England wholesale price of about 5 c/kWh, during the 2009 - 2022 period, 13 years, courtesy of:
Gas-fueled CCGT plants, with low-cost, low-CO2, very-low particulate/kWh
Nuclear plants, with low-cost, near-zero CO2, zero particulate/kWh
Hydro plants, with low-cost, near-zero-CO2, zero particulate/kWh
Cabling to Shore Plus $Billions for Additional Gridwork on Shore
A high voltage cable would be hanging from each unit, until it reaches bottom, say about 200 to 500 feet.
The cables would need some type of flexible support systemThere would be about 5 cables, each connected to sixty, 10 MW wind turbines, making landfall on the Maine shore, for connection to 5 substations (each having a 600 MW capacity, requiring several acres of equipment), then to connect to the New England high voltage grid.
The onshore grid will need $billions for expansion/reinforcement to transmit electricity to load centers, mostly in southern New England.
Floating Offshore a Major Financial Burden on Maine People
Rich Norwegian people can afford to dabble in such expensive demonstration follies (See Appendix 2), but the over-taxed, over-regulated, impoverished Maine people would buckle under such a heavy burden, while trying to make ends meet in the near-zero, real-growth Maine economy.
Maine folks need lower energy bills, not higher energy bills.
APPENDIX 2
Floating Offshore Wind in Norway
Equinor, a Norwegian company, put in operation, 11 Hywind, floating offshore wind turbines, each 8 MW, for a total of 88 MW, in the North Sea. The wind turbines are supplied by Siemens, a German company
Production will be about 88 x 8766 x 0.5, claimed lifetime capacity factor = 385,704 MWh/y, which is about 35% of the electricity used by 2 nearby Norwegian oil rigs, which cost at least $1.0 billion each.
On an annual basis, the existing diesel and gas-turbine generators on the rigs, designed to provide 100% of the rigs electricity requirements, 24/7/365, will provide only 65%, i.e., the wind turbines have 100% back up.
The generators will counteract the up/down output of the wind turbines, on a less-than-minute-by-minute basis, 24/7/365
The generators will provide almost all the electricity during low-wind periods, and 100% during high-wind periods, when rotors are feathered and locked.
The capital cost of the entire project was about 8 billion Norwegian Kroner, or about $730 million, as of August 2023, when all 11 units were placed in operation, or $730 million/88 MW = $8,300/kW. See URL
That cost was much higher than the estimated 5 billion NOK in 2019, i.e., 60% higher
The project is located about 70 miles from Norway, which means minimal transport costs of the entire supply to the erection sites
https://www.offshore-mag.com/regional-reports/north-sea-europe/arti...
https://en.wikipedia.org/wiki/Floating_wind_turbine
The project would produce electricity at about 42 c/kWh, no subsidies, at about 21 c/kWh, with 50% subsidies
In Norway, all work associated with oil rigs is very expensive.
Three shifts of workers are on the rigs for 6 weeks, work 60 h/week, and get 6 weeks off with pay, and are paid well over $150,000/y, plus benefits.
If Norwegian units were used in Maine, the production costs would be even higher in Maine, because of the additional cost of transport of almost the entire supply, including specialized ships and cranes, across the Atlantic Ocean, plus
A high voltage cable would be hanging from each unit, until it reaches bottom, say about 200 to 500 feet.
The cables would need some type of flexible support system
The cables would be combined into several cables to run horizontally to shore, for at least 25 to 30 miles, to several onshore substations, to the New England high voltage grid..
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APPENDIX 3
Offshore Wind in US and UK
Most folks, seeing only part of the picture, write about wind energy issues that only partially cover the offshore wind situation, which caused major declines of the stock prices of Siemens, Oersted, etc., starting at the end of 2020; the smart money got out
All this well before the Ukraine events, which started in February 2022. See costs/kWh in below articleWorld’s Largest Offshore Wind System Developer Abandons Two Major US Projects as Wind/Solar Bust Continues
https://www.windtaskforce.org/profiles/blogs/world-s-largest-offsho...US/UK Governments Offshore Wind Goals
1) 30,000 MW of offshore by 2030, by the cabal of climate extremists in the US government
2) 36,000 MW of offshore by 2030, and 40,000 MW by 2040, by the disconnected-from-markets UK governmentThose US/UK goals were physically unachievable, even if there were abundant, low-cost financing, and low inflation, and low-cost energy, materials, labor, and a robust, smooth-running supply chain, to place in service about 9500 MW of offshore during each of the next 7 years, from start 2024 to end 2030, which has never been done before in such a short time. See article
US/UK 66,000 MW OF OFFSHORE WIND BY 2030; AN EXPENSIVE FANTASY
https://www.windtaskforce.org/profiles/blogs/biden-30-000-mw-of-off...NOTE: During an interview, a commentator was reported to say” “renewables are not always reliable”
That shows the types of ignorami driving the bus
The commentator should have said: Wind and solar are never, ever reliableUS Offshore Wind Electricity Production and Cost
Electricity production about 30,000 MW x 8766 h/y x 0.40, lifetime capacity factor = 105,192,000 MWh, or 105.2 TWh. The production would be about 100 x 105.2/4000 = 2.63% of the annual electricity loaded onto US grids.
Electricity Cost, c/kWh: Assume a $550 million, 100 MW project consists of foundations, wind turbines, cabling to shore, and installation, at $5,500/kW.
Production 100 MW x 8766 h/y x 0.40, CF = 350,640,000 kWh/y
Amortize bank loan for $385 million, 70% of project, at 6.5%/y for 20 y, 9.824 c/kWh.
Owner return on $165 million, 30% of project, at 10%/y for 20 y, 5.449 c/kWh
Offshore O&M, about 30 miles out to sea, 8 c/kWh.
Supply chain, special ships, ocean transport, 3 c/kWh
All other items, 4 c/kWh
Total cost 9.824 + 5.449 + 8 + 3 + 4 = 30.273 c/kWh
Less 50% subsidies (ITC, 5-y depreciation, interest deduction on borrowed funds) 15.137 c/kWh
Owner sells to utility at 15.137 c/kWh; developers in NY state, etc., want much more. See Above.
Not included: At a future 30% wind/solar penetration on the grid:
Cost of onshore grid expansion/reinforcement, about 2 c/kWh
Cost of a fleet of plants for counteracting/balancing, 24/7/365, about 2.0 c/kWh
In the UK, in 2020, it was 1.9 c/kWh at 28% wind/solar loaded onto the grid
Cost of curtailments, 2.0 c/kWh
Cost of decommissioning, i.e., disassembly at sea, reprocessing and storing at hazardous waste sites
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If the wind is blowing steady enough, an Owner of a 100 MW system may offer 25 MWh of capacity for 2 hours, and get paid, but if he fails, ISO-NE will get another owner, likely of a traditional plant, to make up the shortfalls
That cost gets deducted from the wind owner payment, plus a penalty gets deducted, to ensure the wind owner does not overbid the next time
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Comment by Dan McKay on February 22, 2024 at 10:24am
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There must be some sort of understanding that ISO-NE will never call on wind power in cases of an emergency moment of need when the wind isn't blowing, so is wind or solar really "obligated capacity resources"? ISO-NE considers their historical production numbers and makes capacity payments using that number.( i.e. a 100 MW nameplate capacity wind project with a 30% capacity factor is allotted 30 Megawatts for capacity)
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ISO -NE will charge that cost, with mark up, to NE utilities, which will charge it, with mark up, to users, but it will be not identified, so YOU will never know
Maine as Third World Country:
CMP Transmission Rate Skyrockets 19.6% Due to Wind Power
Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.
Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT
******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********
(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/
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Hannah Pingree on the Maine expedited wind law
Hannah Pingree - Director of Maine's Office of Innovation and the Future
"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."
https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/
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