In the previous couple of weeks, New York and Massachusetts introduced that they’ve contracted for about 2,500 megawatts of offshore wind capacity–some of the primary offshore wind farms within the nation. What does this imply for the Southeast? Not lots proper now, however prospects for offshore wind are trying higher and higher for our area.
Chris Carnevale | November 21, 2019
A couple of weeks in the past, New York introduced that it had finalized contracts for about 1,700 megawatts (MW) of offshore wind capability at about $83.36 per megawatt-hour! Then per week later, Massachusetts announced that it had signed a contract for about 800 MW, additionally at traditionally low costs.
While Europe has a 28-year historical past of offshore wind, with about 18,000 MW of offshore wind power in operation, there is only one offshore wind farm in operation within the U.S, rated at 30 MW. Therefore, till the final couple years, estimating the worth for main offshore wind tasks within the United States was pretty speculative.
As a few of the first business-scale offshore wind tasks within the U.S. with buy contracts signed, the New York and Massachusetts contracts present a few of the first information factors of how a lot offshore wind power really prices within the U.S. and so they ship a promising sign. While the New York worth level of $83 per megawatt-hour (MWh) is far larger than the costs that utilities sometimes pay for wholesale power within the Southeast, it’s a stage that’s far beneath what individuals anticipated offshore wind within the United States to price even only a couple years in the past.
The information is encouraging as a result of it helps to indicate a development of unexpectedly low-worth offshore wind power contracts. Last 12 months, the Vineyard Wind project in Massachusetts surprised individuals with a worth of $98 per MWh (estimated) for 800 MW, which was then lowered even additional via tax credit and different income. Then, the Revolution Wind project signed contracts with Connecticut and Rhode Island for $94 (to Connecticut) and $98.43 (to Rhode Island) per MWh for a mixed 600 MW. And now, New York’s contracts are available in at $83 per MWh for about 1,700 MW and whereas the precise pricing of Massachusetts’ new 800 MW contract shouldn’t be but publicly recognized, it’s required by regulation to be decrease than final 12 months’s Vineyard Wind contract.
The latest wave of developments towards offshore wind growth seem to blunt the lengthy held suspicion that the price of offshore wind power growth within the nascent United States market can be considerably larger than what it prices throughout the Atlantic within the extra mature European market. The National Renewable Energy Laboratory’s analysis of the Vineyard Wind contract discovered its worth in keeping with European pricing, and we now know that Vineyard Wind’s pricing was not an outlier however relatively the start of a development.
So what does this all imply for the Southeast? Not lots proper now, however they present promise for an business to return. The Northeast tasks have had benefits that don’t exist within the Southeast, comparable to comparatively larger power costs to compete with (so $83/MWh doesn’t appear fairly as excessive as compared), state mandates for offshore wind (for instance, as I write this weblog publish, New Jersey Governor Patrick Murphy simply announced doubling NJ’s offshore wind purpose to 7,500 MW), and state-stage incentives to convey down the fee. But the price of offshore wind energy is anticipated to say no considerably over the subsequent decade–to perhaps $50 per MWh for tasks on-line in 2030. Offshore wind generators generate energy extra constantly than onshore wind generators. Therefore offshore wind technology can offset more expensive power technology assets like fuel peaker crops and assist meet winter peak demand. Offshore wind technology due to this fact has the potential for excessive worth electrical energy, even when it’s not the most cost effective power in the marketplace. Add to that the excessive capability issue of contemporary wind generators (i.e. a 63% capability issue for the announced Haliade-X generators), and we’re some severe renewable energy potential within the not-too-distant future.