Bloomberg | Jennifer A Dlouhy | October 1, 2019
For years, the mighty wind blowing off the Massachusetts coast has beckoned developers with visions of clean, emission-free electricity. The latest to be seduced, Vineyard Wind LLC, aims to install 84 Statute of Liberty-size turbines about 15 miles off the state’s shoreline, which would together generate enough electricity to power 400,000 homes as soon as 2022.
The project hit a snag in August, when the U.S. Department of the Interior ordered additional analysis of how the wind farm—and potentially 14 others that have been granted leases across almost 1.7 million acres of Atlantic waters—would affect the $1.4 billion fishing industry along the Eastern seaboard. U.S. regulators had sought to fast-track Vineyard Wind and could still sign off on the project by their self-imposed deadline in March, but the additional review is a blow to the companies behind Vineyard Wind, Avangrid Inc. and Copenhagen Infrastructure Partners, which had hoped to begin construction this year.
While the U.S. is second only to China in onshore wind power capacity—which is neither as reliable nor as efficient as offshore, but a lot cheaper to build—it lags behind China, Germany, the U.K., and other countries in taking advantage of the stronger, steadier gusts at sea. Despite the federal push to get projects off the ground, so far there’s just one offshore wind farm in the U.S.: a small, 30-megawatt facility in state waters near Block Island, R.I., that went online in 2016.
What Europe lacks in real estate, it made up for decades ago by setting ambitious clean-energy goals and subsidizing the large offshore installations that would be necessary to satisfy them. “The European governments footed the bill for the expensive projects early on, and now prices have come down so quickly, it’s opened the doors to new markets,” says Tom Harries, a senior associate with BloombergNEF. Offshore wind is still more expensive than its onshore competition, but prices are plunging globally. Rates for unsubsidized offshore wind power fell 64% from 2012 to 2018, reaching a global average of $89 per megawatt hour, according to BloombergNEF. Vineyard Wind won a contract to sell power to three Massachusetts utilities for $65 per MWh, which is still more costly than the average wholesale power price of $44 per MWh in New England last year. But offshore wind can also be a buffer against winter energy price spikes, as wind speeds tend to be higher during the colder months.
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