Deepwater Wind has completed attaching blades to the last of five massive, 6 MWe peak capacity wind turbines that make up the 30 MWe Block Island Wind Farm. That is one of the final steps in the process of installing and commissioning the facility.
By the end of 2016, the developer expects that the project will enter commercial operation and begin providing the first electricity from offshore wind turbines to the US electricity grid. It is a development with far reaching implications and several lessons available to be learned.
Consistently Powerful Political Support Is A Key Component
This modest-sized installation has been in the works since 2008. In April of that year, Rhode Island issued a request for proposals. Eight organizations submitted bids. In September, a five person panel appointed by the Gov. Donald Carcieri Administration selected Deepwater Wind LLC, a then-new entity from New Jersey without prior wind installation experience, to be the project developer.
Initially, the public utility commission (PUC) rejected the project’s negotiated power purchase agreement (PPA) on the basis of excessive cost. In 2009, the state legislature passed a law supported by the Carcieri Administration tasking the PUC to prioritize project benefits like creating a new industry with local employees and producing clean power that are not strictly economic.
The final PPA starts with an electricity price of $244 per MWh. During the next 20 years, National Grid will purchase the full output of the facility at a price that increases by 3.5% every year. In year 20 of the agreement, the price paid for Block Island Wind Farm power will be $479/MWh.
In September 2010, Deepwater Wind hired Jeff Grybowski, Donald Carcieri’s former Chief of Staff as its chief administrative officer and senior Vice President for strategy and external affairs. Mr. Grybowski has since been promoted to to company CEO while developing a strong reputation in the offshore wind industry as a policy guru.
Here is a quote from promotional material published by his alma mater, Brown University, in advance of his giving an invited talk there in the fall of 2015.
Deepwater Wind is now installing the first offshore wind farm in the United States off the coast of Rhode Island, the Block Island Wind Farm. Moving this pioneering project forward has required overcoming unique and complex financial, environmental permitting, contractual, regulatory, and construction hurdles. Jeff Grybowski, Deepwater Wind’s CEO, will discuss this success and what it means for the development of clean energy in the United States.
Grybowski has been at the forefront of shaping the federal and state policies supporting offshore wind in the US, including playing key roles in the development of federal rules governing the leasing and permitting of offshore wind projects, federal tax policies supporting renewables, and policies at the state level throughout the northeast for offshore wind, transmission, and renewables.
The project has overcome a number of challenges and schedule modifications; in an October 2012 issue of North American Windpower it was described as a $205 million project with an expected completion date before December 31, 2012.
It will only miss the initial date by slightly less than four years. That’s not too bad for a first-of-a-kind project developed during trying times in the energy market.
The current tally for the complete project is $451 million, which includes $225 million for equipment, construction and installation, $118 million for design, legal and permitting, and $108 million for the undersea cable needed to connect the facility to the established mainland grid.
Though the project will qualify for the 30% of project cost investment tax credit (ITC) in lieu of the production tax credit (PTC), the developer has not yet made it clear how much of those costs will qualify for the credit.
The undersea cable is an integral part of the project’s operation and economics; though Block Island residents are the customers most often mentioned, the Island’s peak power demand during the height of tourist season is only 5 MWe.
Instead of supplying that small amount of power directly to Block Island, Deepwater Wind’s agreement is with National Grid. That large utility will mix its production with other wholesale power supplies and pass the PPA costs to all of the customers that it serves. Individual homeowners served by the utility will thus pay about $1.35 per month for the small amount of expensive power.
Avoiding NIMBYism With Substantial Local Benefits
One way that the project developers proactively dispelled local objections to the wind facility was to carefully design and package the system so that it provided substantial benefits for island occupants and visitors. It then worked diligently to ensure that people understood how the project would directly improve their lives.
Because the wind farm is only 3 miles off of the southeast coast of Block Island, the island is a good location for the required electrical substation to combine the output of the five turbines and send it to shore. After decades of discussion and dreaming, the island could be connected to the grid and no longer need to generate its electricity by burning high cost, high pollution diesel fuel in locally operated and maintained generators.
Electricity for both commercial and retail customers on the island has cost as much as $600 per MWh (60 cents per kWh) in recent years, with a fuel adjustment surcharge accounting for up to 75% of the total cost.
The new undersea cable allows Block Island Power Company to become a distribution-only utility. It will purchase its power from the New England grid at a much more affordable price than is possible when burning diesel fuel. The undersea cable is robust and fault tolerant; the backup power concept in the remote case of failure will become portable generators transported to the island by barge.
Another pleasant benefit for island residents and visitors will be vastly improved communications capability via the six strand fiber optic cable that was included in the package.
I spoke with Whitney Kneisley of the Storm Trysail Club, which hosts the annual Block Island Race Week. Ms. Kneisley told me that the club’s members — like most sailors — are strong supporters of clean energy projects. They are excited about the Block Island Wind Farm, especially since the five turbine installation does not interfere with the normal routes taken during the round the island race that they sponsor.
State Of The Art Turbines
The project’s wind turbines will be Haliade 150’s, a new design from GE’s recently acquired Alstom division. The nacelles are mounted on towers that are 100 m tall above the water; the height from water surface to the highest swept point is 180 m.
Deepwater Wind announced the contract signing for this cutting edge design in February 2014. The first unit of the new design had completed initial installation in November 2013; the design completed its final type certification in January 2015. (Details from 4Coffshore.com)
Clean Energy Jobs
Some parts of the towers were fabricated by 14 newly hired employees at Specialty Diving Services in a large hanger type building at the Quonset (Rhode Island) Business Park; the turbines and blades were manufactured by Alstom in France; the 20 mile long undersea cable was fabricated in South Korea; and the steel jacket foundations anchoring the towers to the seabed were manufactured in Louisiana by Gulf Island Fabrications, a company with experience building foundations for offshore oil and gas drilling rigs.
Approximately 330 temporary construction and electrical workers were involved in the actual tower, turbine and cable installation.
Once the wind farm is in operation, Deepwater Wind hopes to move on to additional projects, including one that is aiming to serve Long Island, another island with high electricity rates and a power supply system dependent on burning oil.
Note: A version of the above first appeared on Forbes.com under the headline of Is Offshore Wind Finally Ready To Serve U.S. Power Needs?`