IPSWICH – Some good news and some bad news from last week’s wind turbine fire.
The town won’t have to pay for repairs, and it will save a little money after a fire knocked out the turbine last week. However, there may be some additional costs due to lost credits in the electricity market.
In a statement released on Friday afternoon, Ipswich Electric Light Department manager Jon Blair said, “Financially speaking, this is of little consequence to the ELD and its ratepayers.”
His comments came after consulting earlier this week with the management of Ipswich Wind Independence, or “Wind 2.”
Regarding the now off-line turbine, Blair said, there is enough diversity “to prevent these types of isolated events from shocking the system.”
The town is contractually obligated to buy power from owners of the privately owned Wind 2 turbine.
But that electricity, at $116/MWh, is twice the cost of the ELD’s averaged portolio, Blair said. And it is three times as much as wholesale power bought in the day-ahead market, he added.
“Therefore, if anything, the rates will experience some very limited relief from this event,” Blair noted.
The contract calls for Wind 2 rates to drop to $70/MWh in 2023, “so it is somewhat more desirable to experience an extended outage like this now, [rather] than during the period of lower rates,” he added.
Although the power is generated by renewable energy, the town gets no Renewable Energy Credits (RECs), Blair said.
“Therefore, this event has no real impact on our position as it relates to renewable energy. In practice, we have considered Wind 2 among our carbon-free sources when assessing the ELD’s power portfolio, with regard to greenhouse gas emissions,” he added.
“However, that assessment is for informational purposes only and has no regulatory or legislative standing,” Blair said.
Since the town doesn’t own the RECs, it doesn’t have the option of selling them. “Therefore, there is no concern about lost revenue from REC sales,” he added.
Blair described Wind 2 as “an intermittent resource” that provides some very small capacity credits to Ipswich via monthly auctions with the ISO-NE.
Wikipedia said ISO-NE “oversees the operation of New England’s bulk electric power system and transmission lines.”
“Based on the historically poor reliability of this turbine and the variability of this market, the impact is less than $15,000 for this fiscal year. This equates to ~0.5% of our capacity costs for the year,” Blair said.
The town and the ELD won’t be called upon to repair Wind 2 and is only obliged to purchase power whenever it is produced, he added. “If no power is produced, no costs are incurred and no invoice is rendered,” Blair said.
If the turbine is damaged beyond repair, the power purchase agreement with the town requires the owners to restore the site to pre-construction conditions, he added.
“They are contractually obligated to provide us with restoration estimates and timelines; I fully intend to hold them accountable to this requirement,” Blair added.