Even the rosiest predictions say building a major wind farm off Rhode Island’s coast, such as the one envisioned by Governor Carcieri, could take at least four or five years.
The state itself has decided to delay issuing permits for any such projects for at least a year while regulators figure out how the process would work.
But a handful of Rhode Island cities and towns aren’t waiting for the state. Several communities along Narragansett Bay and the state’s southern shore plan to erect municipally owned wind turbines on land.
The communities, which include Portsmouth, Barrington, Warren, Bristol, Middletown and Westerly, are all exploring wind energy.
The efforts, most of which are still in the planning stages, appear to have few obstacles and wide public support.
Voters in Portsmouth, the community furthest along, passed a referendum allowing the town to borrow $2.6 million for a wind project, with 60 percent voting in favor.
Earlier this month, the town signed a contract with Wind-Smart, a Rhode Island-based turbine developer, and hopes to have a groundbreaking at the high school in June. If all goes according to plan, a wind turbine could be generating power for the town by the end of the year.
“In the big scheme of things, we’re doing our little part of reducing the carbon footprint in the town,” said Rich Talipsy, chairman of the Portsmouth Economic Development Committee. “I don’t think we realized the amount of support we would have, had you asked me when we started this.”
The municipal projects are tiny compared with the massive wind farm that the governor proposed last year. Last month, the governor’s office began seeking proposals from private developers to build, finance and operate an offshore facility to be built south and west of Block Island. Among the requirements is that the project be large enough to supply at least 15 percent of the state’s electricity.
That puts the proposal on the same scale as the Cape Wind proposal off Cape Cod, and could cost $1.5 billion to construct. By contrast, a single wind-turbine land installation, such as those considered by the municipalities, may cost about $3 million.
Nevertheless, the towns say these smaller projects will bring immediate benefits, such as lowering electricity costs for the municipalities. The wind turbines may even become a new source of revenue, if the savings exceed the initial construction and financing costs.
Beyond that, the backers say, are the educational benefits, as many of the generators may be placed next to public schools. And the projects are a source of civic pride, demonstrating a sense of doing the right thing in terms of helping to reduce the use of fossil fuels to make electricity.
“We’re doing our small part to help make the planet a better place,” said James Bride, the chairman of Barrington’s Committee for Renewable Energy. The group says it is hoping to get voter approval for a plan to erect a $2.4-million wind turbine at the town’s high school. The School Committee unanimously approved the plan on Thursday night. It goes to the Financial Town Meeting on May 28.
“It’s a great cost-savings benefit to Barrington High School and the taxpayers in Barrington,” he said.
Interest in wind-turbine projects comes at a time of near-record electricity rates. The retail cost of power provided by National Grid, the state’s dominant utility, through its Standard Offer rate is 15.4 cents per kilowatt-hour, according to calculations by The Journal. A typical customer pays $921 a year for electricity, about 34 percent more than the same customer paid five years ago. Rates could go even higher in 2010, when National Grid’s long-term contracts with suppliers expire.
There are only a handful of communities in Rhode Island where land-based wind turbines would be economically viable, said Lefteris Pavlides, a professor of architecture at Roger Williams University and an advocate for wind energy.
The key determinant is wind speed. With current technology and today’s electricity rates, the wind speed must average at least 6 meters per second for a community to come out ahead, Pavlides said.
Wind turbines provide three economic benefits.
First, electricity produced by the turbine can offset power a community would usually buy from a utility company, so bills would be lower.
Second, excess electricity can be sold back to the regional power grid at a wholesale rate.
And third, wind-turbine owners can sell what are called Renewable Energy Certificates, or RECs. Many states, including Rhode Island, have provisions requiring utility companies to purchase a certain amount of electricity from renewable resources. The companies can fulfill this obligation by buying RECs, which essentially prove that a certain amount of electricity was generated from a renewable source. One REC represents 1 megawatt-hour of electricity and the certificates can be sold or traded.
The enthusiasm for wind energy in Portsmouth is not surprising, given the success of the privately owned wind turbine at Portsmouth Abbey School.
“People just think it’s cool,” said Brother Joseph Byron, who oversees the abbey’s turbine operations.
He said the site has become an unofficial tourist attraction, drawing people to the school’s parking lot, where they sit and watch the blades rotate about once every two seconds.
“It’s unbelievable the number of people coming through asking how they can apply it to their situation,” he said.
In March 2006, the school erected its 240-foot-tall, 660-kilowatt-hour generator. It became –– and still is –– the only commercial-grade wind turbine operating in Rhode Island.
The $1.2-million project was partially paid for by a $450,000 grant from the Rhode Island Renewable Energy Fund, which gets its money from a surcharge on the bills of all the state’s electricity customers. The abbey used its endowment funds to pay for the rest.
Overall, the turbine produces about 40 percent of the school’s electricity. On windy days, when the generator produces more than what’s needed, the excess electricity is sold to National Grid.
In the turbine’s first year of operation, the school sold its extra electricity and renewable energy certificates for about $93,000. In addition, the power generated displaced about $130,000 worth of electricity the school would have otherwise bought from National Grid.
After deducting operating expenses of about $25,000, the net benefit was $198,000. The school took that savings and invested it in conservation measures, such as replacing inefficient light bulbs and replacing an old boiler system, Brother Byron said.
The Town of Portsmouth is counting on a similar success. Its plans call for a turbine that has twice the generating capacity as the one at the abbey, and is expected to cost about $3 million.
The tower will sit at the high school, pending approval by the Federal Aviation Administration. (The FAA rejected one particular site at the high school this month, but has told the town that a lower tower placed nearby would probably pass requirements.)
Voters have already given the town approval to borrow $2.6 million from the federal Clean Renewable Energy Bond program. These bonds, created by the Energy Policy Act of 2005, provide government entities with interest-free loans by giving investors a federal tax credit in lieu of receiving interest payments.
Portsmouth will have 13 years to repay the money. The remaining $400,000 will be borrowed from the state’s renewable energy fund, said Talipsy, at a 2-percent interest rate.
The town commissioned Applied Technology & Management, a coastal, environmental, marine and water resources engineering firm headquartered in Florida, to evaluate whether a wind-turbine project could be self-supporting.
ATM found that not only would the project pay for itself, but that it would bring in extra cash for the town, beginning in the first year of operation.
The revenues from the turbine would repay the loans after 14 years, according to the ATM study. After the loans are paid off, the wind turbine is expected to add from $390,000 to $428,000 each year to the town coffers. It has a life expectancy of 20 years.
So what happens if the wind doesn’t blow as hard as the models predict? What if electricity prices drop, making the power generated by the turbine less valuable?
Gary Gump, a spokesman for the Portsmouth Economic Development Committee, said the consultant the town hired prepared financial projections that took into account a number of different scenarios, including less wind than projected, more wind, lower electricity rates, higher rates and so forth.
“We do not expect, under the circumstances that any of us could foresee, that we would have negative impact on the town’s operating costs,” Gump said.
Talipsy, president of the committee, said the projections were intentionally calculated on the conservative side.
“I didn’t want to, several years from now, come to the witness-protection program because we didn’t make our numbers,” he said. “Unless the earth stops turning and the wind stops blowing, we’re going to make money on this.”
There are at least two pieces of legislation being considered at the State House that could make the economics even better.
One bill expands an existing state law known as “net-metering,” which, today, allows an electricity customer to provide excess power to National Grid, in exchange for a credit on that customer’s electricity bill. In other words, if a wind turbine produces more electricity than a customer can consume at any given time, the customer can direct the excess electricity to the power grid in exchange for a credit on that customer’s bill.
The proposed bill (2008 – S2594) would create “virtual net metering” that would allow a municipality or school to bank those credits, to be carried over for a year. Or the credits could be applied to another municipal electricity account, not just the one to which the wind turbine was connected.
The bill would also raise the limit on the amount of customer-generated electricity National Grid is required to accept. The Senate Corporations Committee is holding the measure for further study.
A second bill would establish a Municipal Renewable Energy Fund to provide grants to cities and towns for renewable-energy projects. Grants up to $500,000 each would be awarded from the fund “to the most competitive and qualified” projects.
The money would come from an existing fee now paid by all electricity customers to promote energy conservation. Half of that conservation money, or at least $1 million, whichever is bigger, would be diverted to the Municipal Energy Fund.
That bill (2008 – H7806) was passed by the House on Wednesday and is now headed to the Senate. Despite the enthusiasm for land-based municipal wind turbines, Lefteris, the Roger Williams professor, said that municipal resources may be better spent by investing in a large, offshore project, such as the one proposed by Carcieri. The governor’s office has suggested that cities and towns may be able to take an ownership stake in the project, or perhaps enter into a long-term contract for electricity with the project developer.
Lefteris said that most of the state’s wind energy –– about 98 percent –– is found above Rhode Island’s coastal waters. In other words, the wind is much stronger and more consistent over water than it is over land.
Because of the way wind turbines work, electricity production goes up exponentially as wind speed increases, he said. A 20-percent increase in wind speed will generate 80 percent more power.
But even with land-based wind turbines, Lefteris said cities and towns pooling their resources at a single site might be more economical.
“What really makes sense,” he said, “is to install 10 to 20 turbines on some windy state-owned land.” The wind farm could be co-owned by the municipalities and they could pay National Grid a transmission fee to bring the power to the communities.
Bride, the Barrington wind-energy committee chairman, said he thought the idea sounded intriguing.
By Timothy C. Barmann
Journal Staff Writer
27 April 2008
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