Wind-energy projects are starting to pop up in New Hampshire, but people hoping to see off-shore wind farms are still treading water.
And if coastal development ever does ever occur, it will come with a sizable price tag. Projects proposed in Massachusetts and Rhode Island are expected to cost billions of dollars to build, as do coal and nuclear plants located across the country.
Under current law, including a tax package approved by Congress last week, U.S. taxpayers would be providing a federal investment tax credit – or the cash equivalent – of 30 percent toward much of the capital costs.
“I think we’re going to see offshore wind in many locations before we see it in New Hampshire because other locations are easier to get to. They have more favorable (ocean) depths,” said Martin Wosnik, associate director of the Center for Ocean Renewable Energy at the University of New Hampshire.
Tax incentives are intended to encourage projects, both on a residential and commercial scale.
Deepwater Wind, based in Providence, R.I., has proposed building a wind farm of 200 turbines off the southern Rhode Island coast to serve several states and power the homes of 350,000 people. The total cost is estimated between $4 billion and $5 billion, according to Chief Executive Officer William Moore.
The federal investment tax credit covering 30 percent of most capital costs is expected to save investors at least $900 million.
One advocate for wind power criticized the American Recovery and Reinvestment Act for allowing investors in wind projects to receive a cash payout rather than a production tax credit, given once a project is producing power.
“The problem with that cash program is there’s no requirement on the developer to produce a kilowatt of energy to get the money,” said Lisa Linowes, executive director of the Industrial Wind Action Group, a New Hampshire advocacy group that focuses on the proper siting of wind energy projects.
The question of cost
Whether wind energy costs are worth paying is a matter of opinion.
Wosnik cautioned about comparing electricity prices when looking at various sources of energy.
“You really have to ask yourself not just how much cents per kilowatt hour do I have to pay. Even that is a bit diffuse at that point. We’re not accurately accounting for hidden costs and subsides of traditional electric energy sources such as coal,” Wosnik said.
But under one measurement, building and running an offshore wind farm is nearly twice as expensive as the costs involved in using coal.
Coal carries an estimated cost of $100.40 for every megawatt hour of electricity for a new plant entering service in 2016, compared with $191.10 for offshore wind, according to the U.S. Energy Information Administration.
Those costs include building, financing, fueling and running the plant. Any state and federal tax credits weren’t included in the calculations.
A wind farm would need 750 five-megawatt wind turbines to offer the same energy production as the Seabrook nuclear power plant running at traditional capacity loads, Wosnik said.
“We have to be realistic and honest about how much and at what cost each technology can contribute to our energy portfolio,” Wosnik said.
Several New England states offer renewable energy credits that help with the costs, Moore said.
“I think most people are prepared to pay slightly extra for clean power and to start to move us away from fossil fuels,” Moore said. “The question is how much is reasonable.”
Jack Ruderman, who heads the sustainable energy division at the New Hampshire Public Utilities Commission, said power producers using wind technology can sell power to the regional pool and also receive renewable energy credits that they also can sell to other utilities. State law requires utilities to use a percentage of renewable energy or to purchase credits, he said.
No matter how it’s paid for, offshore wind power won’t be a “silver bullet” but rather one piece of America’s energy puzzle for keeping the lights on in people’s homes, Wosnik said.
“We’ll have to gradually scale back our fossil energy use,” Wosnik said. “It will take a little bit of wind, a little bit of biomass. It will take a bigger chunk of solar.”
Wosnik said offshore wind makes sense, but “it needs to overcome its cost problems.”
“You simply have to be realistic and assess how much we can get out of that,” Wosnik said. “It is completely unrealistic to say we will one day power everything with offshore wind. It is a piece of the puzzle.”
A report released by the National Wildlife Federation this month said proposed offshore wind projects could provide electricity to 1.5 million homes along the entire East Coast.
Jessica O’Hare, program associate with Environment New Hampshire, a report co-sponsor, called on the federal government to take action.
“By harnessing the vast, untapped wind resources off our coast, we can create local good-paying jobs, reduce our dependence upon fossil fuels and take a big step forward combating global warming,” O’Hare said after the report’s release.
Setting up a wind farm in ocean waters is no easy feat.
UNH had been working on a project to set up a test turbine south of the Isle of Shoals. But a $700,000 funding cut scuttled that, he said.
Companies need to figure out where best to site these projects. Winds farther away from shore are better for turbines, but the costs to send that power back to land increases, Wosnik said.
“It’s a difficult trade-off,” he said, estimating an offshore wind farm might need to be located about 30 miles offshore.
Moore said the wind project off of the southern Rhode Island coast will barely be visible from land. Some who oppose such wind farms argue they spoil coastal views.
He said the wind turbines have a design life of about 20 years and a “survival rate of about 150 mph,” twice the speed of a minimal hurricane.
“In the case of a major gale, you pitch the blades where they’re not creating any lift at all in the direction of the wind,” Moore said.
Published reports said European turbine blades come with an expected 20-year lifespan.
Wosnik said he’s heard where some turbine parts need more frequent maintenance than expected.
Power generated from the Deepwater Wind farm would be sold to the regional power pool. Moore envisioned the first turbines to be producing electricity in 2014 or 2015. Deepwater Wind is developing a regional offshore transmission network that would allow the wind farm to send power to multiple states in the region.
The U.S. Department of the Interior is currently reviewing the project’s request to lease the ocean site where it plans to locate Deepwater Wind. Its application will be subject to federal and state review, and if a lease is awarded, the project will undergo extensive permitting reviews and public comment, according to Deepwater Wind.
More if by land
Linowes, the director of Industrial Wind Action Group and a Lyman resident, said land-based projects should be put in placed where they won’t harm wildlife or property values.
A state program provides rebates up to $6,000 for solar or wind generation, which makes up about 8 percent of all rebates, Ruderman said.
And more than one-third of New Hampshire communities provide local property exemptions for people adding wind, solar or biomass projects to their land.
Eric Steltzer, energy policy analyst at the state Office of Energy and Planning, said more than 500 people had taken advantage of the program as of last year.
“The idea for the property tax exemption is to remove the disincentives of putting renewable energy in,” said Steltzer, who’s involved in the site evaluation of a wind farm project in the town of Groton.
Some towns will exempt the cost of the project from a property evaluation, so a home assessed at $200,000 would remain at that rate, despite adding a $20,000 wind turbine. Other communities deduct the $20,000 from the $200,000, so property owners get a further break.
“There was a large inconsistency across the state on how the tax exemption was being applied,” Steltzer said.
People typically would be eligible for the 30 percent federal tax credit as well.
“Those have been very successful in encouraging further development of renewable energy in the state,” he said.
Richard Louff said the tax credit made his North Hampton project more inviting financially.
This month, a 55-foot wind turbine between the first and 10th fairways at the Sagamore-Hampton Golf Club began producing electricity.
Louff, a co-owner of the course, said he hopes to recoup within the next five to seven years the $16,000 to $17,000 it cost to purchase and install.
Wind projects often attract neighborhood opposition.
“It’s a very much of a not-in-my-backyard attitude,” Wosnik said. “People don’t want to see wind turbines offshore, but they’re conveniently ignoring other high-impact events for energy. If you strip mine a mountain, that’s not low impact.”
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