"I keep reading about how offshore wind farms are the electricity generating method of the future, because they’re so darn inexpensive.
Here’s the New York Times on the subject:
The Biden administration wants up to 2,000 turbines in the water in the next eight and a half years.
Officials recently approved a project near Martha’s Vineyard that languished during the Trump administration and in May announced support for large wind farms off California’s coast.
The $2 trillion infrastructure plan that Mr. Biden proposed in March would also increase incentives for renewable energy.”
The cost of offshore wind turbines has fallen about 80 percent over the last two decades, to as low as $50 a megawatt-hour.
While more expensive per unit of energy than solar and wind farms on land, offshore turbines often make economic sense because of lower transmission costs.
So I thought I’d walk through the costs on one of the few US offshore wind farms, the Block Island Wind Farm.
... Block Island (is) a small island off the coast of Rhode Island, not far from the tip of Long Island, New York.
... it contains five 6-megawatt (MW, or 106 watts) giant wind turbines. Of course, on average they don’t put out 6 megawatts, because sometimes the wind doesn’t blow
… in fact, on average they only put out about a third of that, about 2 megawatts. That works out to about 92 million kilowatt-hours (kWh) per year.
How much is that energy worth?
Well, the nationwide average purchase cost for a kilowatt-hour (kWh) of electricity is around 4 cents … and it’s then resold to the customer at around 13 cents/kWh.
And how much is Rhode Island paying for this “inexpensive” wind energy?
… they’re paying 24.4 cents/kWh, six times the national average, and it’s going up by 3.5% per year … so in ten years it will be 34.4 cents/kWh.
... Because of Rhode Island’s insane “renewables mandate” forcing them to buy “inexpensive” renewable energy, yes, they’re paying the wind farm owners 24.4 cents/kWh to purchase the power
… but the power company still needs to add another ten cents/kWh for transmission and maintenance and profit.
So for this “inexpensive green wind power”, (customers) are paying the wind farm owners about 34 cents per kWh, and in a decade it will be 44 cents/kWh to the consumer.
Oh, plus the surcharge to pay for the transmission cable, as discussed below.
Why is the power cost so high?
Because … the idea that offshore wind power is inexpensive is a total myth.
... Let’s start with the initial costs.
The construction and installation of the wind farm cost $350 million.
The transmission line from Block Island to the mainland was another $114 million, paid for separately by the mainland ratepayers.
Then you have to add in “O&M”, operation and maintenance costs, which are about 1-2 cents per kilowatt-hour generated per year for offshore wind,
conservatively at least another million dollars per year at Block Island, perhaps more.
At an average of 28.6 cents/kWh over the next ten years, power sales will net about $25 million per year
… so the company owning the wind farm won’t even make a profit until 14 or so years down the line
… and that’s not counting the ... unexpected maintenance, or a wind turbine that gets destroyed in a storm, or ...
… in addition to paying $114 million for the transmission cable in the first place, the poor Rhode Island ratepayers
are also on the hook for a portion of the $31 megabucks to pay to re-bury the power cable that got exposed by waves, wind, and currents.
... (and) the owners are saying it will cost more than the original estimate of $31 million to fix it …
... from the Rhode Island “Providence Journal”:
National Grid reaps $46M in excess profits from RI wind surcharge
PROVIDENCE:
More than a decade ago, when policymakers put Rhode Island on the path to hosting the first offshore wind farm in the nation, they made a bargain.
They knew that power from the Block Island Wind Farm would be expensive but were willing to pay the price in the hopes that the project would spur creation of a new clean-energy industry in the state.
What they didn’t bargain for was that the wind farm would become a gold mine for an energy company that already had a dominant presence in Rhode Island:
National Grid, the main electric utility in the state and the owner of the 20-mile undersea transmission cable that brings power generated by the project from a Block Island substation to the mainland power grid.
In the four years since the five wind turbines went into operation, National Grid has made $46 million in excess profits from delivering electricity through the cable, according to filings by the utility in response to questions by state regulators.
That’s money coming into National Grid on top of what was estimated for operations and maintenance of the cable, taxes on it,
and even how much the company calculated it needed to pay off its installation and construction costs over time while still earning a reasonable profit.
And it’s money paid entirely by Rhode Islanders through a surcharge on their electric bills.
... even though a good portion of the money was designated for operations and maintenance of the cable, National Grid never set the profits aside in a reserve fund.
So when the company agreed last year to rebury part of the cable after it became exposed by waves, National Grid decided to capitalize the $31 million in repairs.
That pushed the total cost of the transmission project up to more than $145 million, and, as a result, the company is set to make electric customers pay even more for the cable’s use.
Because the surcharge is based on the value of the cable, the rate is scheduled to increase in May,
essentially rewarding National Grid with more money for fixing a problem that state coastal regulators, long before construction began, warned could arise.
Meanwhile Ørsted, the Danish company that owns the wind farm and the portion of the cable that runs from the turbines to the Block Island substation, is paying out of pocket for its share of the reburial.
And I haven’t even gotten to the decommissioning costs for when the turbines die, and they have to be removed from way out in the middle of the ocean …
So there you have it, folks—cheap, clean, green, inexpensive offshore wind.
What’s not to like?"
