Well, it certainly appears to be the case, according to the National Wind Watch article: “Real cost of wind”
December 13, 2009
The news that Cape Wind and National Grid, a regional power distributor, will soon negotiate the cost of power from the proposed 130-turbine wind farm in Nantucket Sound sounds like the last act is near.
Perhaps, but it’s likely to be a dramatic one. Consider, if you will, the difficulties of calculating the costs of producing power over let’s say 20 years if you are unsure of the cost and source of capital, the cost and speed of construction, the unknown difficulties of maintaining offshore power production, the uncertainties of the consumer market.
The difficulties were visible in negotiations going on in Rhode Island all fall that now have resulted in an agreement. While the scale is vastly smaller than Cape Wind, the similarities are cautionary.
And yes, the price of the new wind power will be higher — 165 percent higher.
National Grid currently pays 9.2 cents a kilowatt-hour for electricity from coal, natural gas and nuclear generators, which it distributes in Rhode Island. It will pay Deepwater Wind 24.4 cents in the first year of the contract, plus an escalation of 3.5 percent a year for the 20-year term.
Deepwater, a New Jersey firm, expects to provide the power from eight turbines in state waters south of Block Island, and then plans to put a 106-turbine project farther out in federal waters.
Block Island residents, who pay the highest electricity rate in the U.S., were excited that cheaper power might come ashore on the way to the mainland.
On the mainland, however, enthusiasm dimmed when Deepwater submitted its first proposal: 30.7 cents per kWh plus the annual escalation, cable costs not included. National Grid called the proposal “not commercially reasonable.”
But Gov. Donald Carcieri, trying to get 20 percent of the state’s power from renewable sources, wouldn’t let the matter rest there. When Deepwater came back with its 24.4-cent offer, National Grid said that if Rhode Island is determined to have a demonstration project “it will be imperative for customers and the public to understand that they will be paying a significant premium for 20 years… .”
That premium, the governor said, will be $1.35 a month for each typical Rhode Island residential customer (500 kilowatts per month) at the start. That’s not an unreasonable price to pay for kick-starting a new industry.
In Massachusetts, the National Grid wholesale residential rate is 8.6 cents per kWh; Cape Wind’s proposal will certainly be higher than that.
We continue to support renewable energy projects under certain circumstances, but Cape Wind is the wrong project in the wrong place — regardless of the price of the electricity.
Cape Cod Times
13 December 2009