Gov. Dannel P. Malloy’s decision to finance a $1 billion wind farm in Maine will help Connecticut attain its renewable energy goals and support a solar farm development in Lisbon, with minimal impact on ratepayers, according to an administration source.
When the Public Utilities Regulatory Authority on Oct. 23 approved Malloy’s plan to fund a 250 megawatt wind farm in Maine and a 20 megawatt solar farm in Lisbon, the regulators noted the Maine deal didn’t have a specific benefit to Connecticut.
When combined, however, the deals bring down the purchase price of the entire 270 megawatt wind and solar buy, according to a Malloy Administration official.
The result: Connecticut electric utility ratepayers will pay less than 8 cents per kilowatt hour for the wind and solar power over the life of the contracts. That makes the cost closer to grid parity, meaning utility customers won’t have to pay as high a premium for those renewable energy sources. The price of power straight off the electric grid fluctuates greatly, but the average is around 5 cents per kilowatt hour.
The average 8-cent price for the two contracts was only possible because Connecticut is buying a large amount of cheaper power from Maine – probably 6-7 cents per kilowatt hour – that makes the cost of the Connecticut solar power – probably 12-15 cents per kilowatt hour – more affordable on average.
“Most developers would agree that Maine is the best place for a wind farm. That is where they would get the cheapest (renewable) energy possible,” said Bill Whitlock, executive vice president for EDP Renewables North America, which is developing the Number Nine Wind Farm in Maine.
The exact purchase price that utilities Connecticut Light & Power and United Illuminating are paying for the electricity over the life of the wind and solar deals won’t be made public until late November. Malloy did disclose in September that the average purchase price for the 15-year wind contract and 20-year solar contract is less than 8 cents per kilowatt hour.
Keeping cost low, even at grid parity, is important for Connecticut as it reaches the later phases of its goal to have 20 percent of its electricity come from renewable sources by 2020.
As CL&P, UI, and other electricity suppliers try to meet that standard, however, the costs of renewable electricity are increasing. That’s why lower price contracts like the Maine wind deal are important to prevent ratepayers’ costs from getting too burdensome.
Grid parity is the major goal of renewable electricity development.
At grid parity, renewable technologies – like solar, wind, fuel cells, and biomass – can compete with fossil fuel technologies without relying on government subsidies. That would seemingly give renewables a leg up in competing for utility power purchase contracts because they offer cleaner energy with little or no greenhouse gas emissions.
Typically, a utility-scale solar purchase is much higher than 8 cents per kilowatt hour. When the city of Bridgeport and United Illuminating recently proposed a 2.2 megawatt solar farm, for example, they estimated the cost at 12 cents per kilowatt hour.
Connecticut could not have gotten the 8 cents per kilowatt hour price for its 270 megawatt renewable energy deal without Maine wind in the contract. A wind farm in Connecticut wouldn’t generate the same amount of energy because the wind isn’t as strong here. Plus, Connecticut has a ban on wind turbine construction.
Meanwhile, other renewable technologies – solar, fuel cells, biomass – couldn’t come up with the capacity or a purchase price offered by the Maine wind, Lisbon solar deal.
“It would be very difficult to put a large-scale wind farm anywhere in Connecticut,” Whitlock said.
Virginia’s HelioSage Energy, developer of the 20 megawatt Fusion Solar Center in Lisbon, did not return calls for comment.
In approving the deal, PURA noted the Maine wind project held no specific benefit to Connecticut because there is no transmission line directly linking the project in northern Maine to the Nutmeg State. As a result the renewable power wouldn’t be consumed here.
DEEP argues, however, the Maine wind deal will have general environmental benefits for the state. All of the electricity generated in and imported into New England is pooled onto the regional power grid administered by ISO New England. The wind farm’s 250 megawatts, DEEP argues, will replace the need for that electricity to be generated elsewhere in the region – likely an older, inefficient fossil fuel plant.
With the deal now in place, EDP Renewables is moving forward with the wind farm construction, with an anticipated in-service date of Dec. 31, 2016. The $1 billion Connecticut funding is all the project needs to move forward.
The development will put 125 turbines on 56,000 acres in northern Maine near Bridgewater, expecting to generate 960,000 megawatt hours annually over the life of the 15-year contract with Connecticut.
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