The project itself isn’t that big — five turbines, 30 megawatts, enough to power 17,000 homes — and it won’t reach full capacity until about Thanksgiving. But it is, backers hope, a harbinger of a much bigger offshore-wind industry to come.
The fight to get offshore wind off the ground (ahem) in the US has been long and fraught. Cape Wind, a 468 MW project, was proposed for Nantucket Sound off the coast of Massachusetts way back in 2001. After a seemingly endless series of battles in court and public opinion, the project appears dead for good.
Block Island went much smaller, in an area with much less public resistance. It was developed by Deepwater Wind, whose CEO Jeff Grybowski used to be chief of staff to then-Rhode Island Gov. Donald Carcieri (R), so political connections were smoother. The project was backed by President Barack Obama, the state’s Congressional delegation, current Gov. Gina Raimondo, environmental groups, and a range of Rhode Island notables.
Deepwater Wind won the federal government’s first competitive offshore wind energy lease auction in July 2013, with a bid of $3.8 million. In November 2014, the feds officially granted Deepwater Wind right-of-way for its $30 million project.
The project had to overcome resistance from environmentalists concerned about whales, residents concerned about property values, and a fishing community concerned about interference. Most eventually came around.
The company brokered a 20-year deal to sell National Grid wind power at 24.4 cents per kilowatt hour ― more than twice the price the utility pays for energy now. What’s more, the deal is written to allow a price increase of 3.5 percent per year. By the time the agreement expires, National Grid will be paying a rate of 50 cents per kilowatt hour to Deepwater Wind, a cost likely to be passed on to ratepayers in the state as a price increase.
For Deepwater Wind and its chief investor, that means a handsome payday. The project could generate more than $900 million in profit, according to calculations by Forbes, and that’s before you factor in $100 million in federal tax credits allotted to clean energy projects.
“It is a legally guaranteed, risk-free money machine,” Forbes reporter Christopher Helman concluded.
Kicking off the industry with an extremely expensive, highly subsidized project is not ideal, to say the least.
But like any industry, costs will fall and get more predictable as scale increases.
Deepwater Wind has won competitive auctions for two more sites off the coast of Rhode Island and Massachusetts, where it will build the Deepwater Wind Energy Center, a huge, 1,000 MW wind farm.
In Massachusetts, Republican Gov. Charlie Baker recently signed a bill that would, among other things, have the state procure 1,500 MW of offshore wind energy. New York is also aggressively looking into offshore wind.
In September, the Departments of Energy and Interior released a National Offshore Wind Strategy, in which they vowed to work together to “facilitate the development of a robust and sustainable offshore wind industry in the United States.”
The Department of Interior has issued 11 commercial leases for offshore wind development and more are in the works. DOE’s Wind Vision report estimates there could be up to 86,000 MW of offshore wind projects in the US by 2050.
Funny side note: Long ago, when dinosaurs roamed the Earth, I wrote a piece for Popular Science on the Atlantic Wind Connection. It is a planned underground DC transmission backbone along the Atlantic coast, to be built in phases over 10 years by transmission company Trans-Elect. The company says it could support the development of 6,000 MW of new offshore wind development.
Who knows if it will ever get built. People have been claiming great things for offshore wind in the US for 15 years now, without much to show for it. But momentum finally seems to be building.
Five turbines is a cute little wind farm. In Europe, they connected 114 offshore wind turbines to the grid in just the first quarter of this year. In 2015, they connected 419 — a total of 3,019 MW. At the end of 2015, Europe had a total of 3,230 offshore turbines installed and grid-connected, adding up to 11,027 MW of total capacity.
The US has a long way to go to catch up. But if nothing else, at least now there are turbines in the water, generating electricity. It’s a start.