On a frigid winter night, about seventy citizens gathered at Narragansett Town Hall to weigh in on Deepwater Wind’s proposal to build wind turbines off the coast of Block Island. The state Department of Environmental Management was seeking comment on Deepwater’s request for a modification to its state dredge permit and for a water quality certificate. But most came to speak globally about the project. And their views ping-ponged wildly between two extremes: an Alaskan-sized folly or an environmental and economic boon of similarly monumental proportions.
The truth will take some time in coming. The DEM permit is only one of several the project needs. Next up will be approvals from the Coastal Resources Management Council, the United States Army Corps of Engineers and the United States Department of Interior to address the environmental impact. Nonetheless, Deepwater hopes to complete the permitting process this year.
The thirty-megawatt five-turbine demonstration project, located about three miles southeast of Block Island, will generate more than 125,000 megawatt hours annually. Wind power will be transmitted from the turbines to the grid along a twenty-one-mile transmission cable, buried under the ocean floor, making landfall north of Scarborough Beach’s recreation area on Ocean Road in Narragansett. The system will connect New Shoreham, for the first time, to the grid and allow it to quit the diesel generators, which power the island. But the per-kilowatt-hour price will be high: 24.4 cents, compared to the market average of about 14.5 cents. Power generated by the wind farm will rise by 3.5 percent for each of the twenty years of the agreement.
Deepwater CEO Jeffrey Grybowski says that the price escalates, in part, to provide stability in pricing over time and incentives for the company to keep its turbines in good working order over their lifetimes.
“It’s apples and oranges to compare fossil-fuel energy prices from a more mature industry with more mature technologies to the cost of a clean-energy source that has to lock in its prices for twenty years,” he says. “The Block Island project is at the very leading edge of this industry.”
The opposition is prepared to assert that wind farms are visual blights and environmental disturbances. But Deepwater’s adversaries believe that the high cost of this particular type of green energy is their strongest argument. A stack of handouts by the door to the Narragansett Town Council chambers raised the alarm. They proclaimed: “Wind Power Invasion Coming Soon,” and warned of a “predatory development,” and “a risky venture,” doomed to fail, while guaranteeing “huge profits” to Deepwater Wind.
“Deepwater is going to charge so much for the electricity — $600 million over twenty years. That is outrageous, far beyond what any other wind farm is going to charge. The price of wind power can be as little as 9 cents per kilowatt-hour,” says Robert Shields, co-chair of Deepwater Resistance, a new political action committee with thirty active members.
The resisters celebrated a victory in August, when they persuaded the Narragansett Town Council to reject Deepwater’s proposal for transmission lines coming ashore near the town beach. But it was short-lived. Deepwater switched the landing site to state property. In December, the State Properties Committee approved the easements for construction of the switchyard, and the new landing site.
“The key thing is to have the political process reenergized, to change the law and prevent Deepwater Wind from building the wind farm,” says Shields.
Deepwater Resistance might have a model in the saga of Cape Wind, a proposal to build 130 turbines in Nantucket Sound. The multimillion-dollar battle, now in its thirteenth year, has pitted entrepreneur Jim Gordon against deep-pocketed billionaire fossil fuels magnate William I. Koch, who also happens to own shoreline property with a view of the proposed wind farm, and politically formidable adversaries like the late Senator Ted Kennedy.
The opposition here has called a few politicos to its cause: State Senator Dawson Hodgson and former Attorneys General Jim O’Neill, Arlene Violet and Patrick Lynch. In 2010, the latter, along with two private businesses and the Conservation Law Foundation, challenged the power purchase agreement, what Lynch called an “insider deal,” before the Rhode Island Supreme Court.
But unlike Cape Wind, an entirely private venture, Deepwater Wind has largely had the backing of the state. In 2008, a committee chose Deepwater over six other bidders as the preferred developer. In 2010, after the Public Utilities Commission (PUC) turned down the power-purchase agreement between Deepwater and National Grid as commercially unreasonable, the General Assembly passed legislation redefining “commercially reasonable,” and allowed the parties a chance to re-file the agreement. The PUC approved it, and in 2011, incoming Attorney General Peter Kilmartin dropped the state from the appeal. The Rhode Island Supreme Court later upheld the legality of the purchase power agreement.
“The contract has been approved, and the project is moving forward,” says Marion Gold of the state’s Office of Energy Resources. “We hope it will pave the way for future offshore wind that will be lower cost.”
The project also has powerful allies in the environmental community and labor groups, who argue that focusing on the per-kilowatt-hour cost is too narrow a lens. For one, the demonstration project will only provide 1 percent of the state’s total energy needs, bumping the typical residential user’s monthly bill in the first year by about $1.37. It will substantially lower electric bills on Block Island, where customers pay more than 50 cents per kilowatt-hour — the highest in the state.
Second, the wind farm is expected to boost the state’s economy. Levitan and Associates, a consultant hired by the Rhode Island Economic Development Corporation, estimated that the state would reap $100 million in economic activity and 200 jobs.
As part of its agreement with the state, Deepwater plans to locate its manufacturing and construction operations at Quonset Point. Already, the proposal has prompted the Hawaii-based Navatek to open a regional office in Peace Dale. The renewable energy technology firm will collaborate with the University of Rhode Island in researching plasma actuators, which improve the energy output and lifespan of wind turbines.
In July, Deepwater won the federal government’s first auction to lease two offshore wind farms. This next project — a utility-scale wind farm providing energy regionally with up to 200 turbines located seventeen miles south of Rhode Island — could generate nearly $1 billion in direct and indirect economic activity, Levitan forecasted.
Elias Hinckley, a Washington, D.C., lawyer who specializes in clean energy financing, says that whoever builds the first wind farm has the potential to become the nation’s wind power manufacturing and shipping hub — “a multi-billion-dollar economic growth engine for decades.” But, he notes, it requires substantial upfront risk and cost.
The opponents’ gamble is the proponents’ investment.
Jerry Elmer of the Conservation Law Foundation says, “It’s worth the additional money.” The foundation supports the project, even though it challenged the power purchase agreement on procedural grounds. “Deepwater has been not merely a good partner, it’s been an excellent partner on environmental issues.”
“There are so many hidden costs from our dependence on fossil fuels, like air pollution and global warming,” says Channing Jones of Environment Rhode Island.
Advocates like Lew Milford, president of the Vermont-based Clean Energy Group, acknowledge that “offshore wind is still too expensive.” In Europe, where offshore wind first appeared in 1991 and generates about 6,040 megawatts, “it’s looked at as a serious source of clean energy and it’s beginning to get some serious scale to it,” he says. “If there is one lesson, it’s this: It’s not a short-term kind of opportunity. It’s a long-term strategy, and you have to put a lot of pieces into place to get there.”
As Rhode Islanders total up all the pieces in determining the worth or worthlessness of an offshore wind farm, we’ll have to think about regional energy policies, the environmental impacts of fossil fuel versus turbines, the effect on the state economy and diversifying our green energy portfolio. The price of a kilowatt-hour may be the least of it.
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