Cape Wind, which wants to build 130 wind turbines off the coast of Cape Cod, and National Grid announced yesterday that they’ve reached an agreement to start charging customers 20.7 cents per kilowatt hour in 2013 - more than double the current rate of electricity from conventional power plants and land-based wind farms.
I suspect it would be a lot cheaper to build more wind farms in the Dakotas and build an HVDC electric power line to transport the electricity to Massachusetts. The political fight about upgrading power grids might be more of a fight about keeping wind power out of existing electric power markets than about subsidizing wind electric power distribution. But either way, if the people of Massachusetts are going to be expected to pay a high price for wind electric power they could probably do better by getting their wind electric from the plains states.
The price of Cape Wind electric power is going to go up at a percentage rate that is probably faster than the overall rate of increase of electric power and from a much higher starting point. The end point is nosebleed level of expensive.
Under the 15-year National Grid contract, the price of Cape Wind’s electricity would increase 3.5 percent each year, pushing the kilowatt price to about 34.7 cents by the time the contract ends.
Note that these are wholesale prices. To put them into perspective, currently the residential customers in Massachusetts are paying about 15.56 cents/kwh and nationally the average is about 10.54 cents/kwh. Those are retail prices, not lower wholesale prices. So Cape Wind electric power seems very expensive to me.
If I was in Massachusetts I'd oppose Cape Wind just on economic grounds without getting into the aesthetic issue.
An HVDC project that runs up the middle of the plains states (and why not Alberta?) and then cuts across a few times to the East Coast would make a much bigger and presumably more efficient market for electric power. I'd provide a way to get much cheaper wind power to the East Coast. Why not do that instead of Cape Wind? That bigger and more efficient market would probably undermine the argument for offshore wind unti such a time that offshore wind costs come way down.
It is also worth noting there's another way that Massachusetts could get very low carbon electricity at a lower price than offshore wind: nuclear power. Even if a nuclear power plant goes way over budget and ends up costing 12 cents/kwh it'd still be much cheaper than offshore wind.
So in a nutshell: I'd prefer nukes or onshore wind with HVDC lines over offshore wind.
Costs to install a turbine at sea are about 4 million euros per megawatt of capacity, said Mortimer Menzel, a partner at the Augusta & Co., a merchant bank. A turbine on land is about 1.5 million euros.
|Share |||Randall Parker, 2010 May 09 05:38 PM Energy Wind|