Last month, Secretary of the Interior Ken Salazar approved the construction of the nation’s first offshore wind farm. He announced, “I am approving the Cape Wind project. This will be the first of many projects up and down the Atlantic coast.” On May 17, The Federal Aviation Administration (FAA) ruled that the Cape Wind Project off the coast of Cape Cod, Massachusetts “would not be a hazard to air navigation”. The $1 billion construction project is expected to start by the end of the year and will include 130 turbines, each 400 feet long and providing 3.6 megaWatts (mW) of capacity. The entire farm will encompass a twenty-five square mile stretch off of the coast, and will be capable of producing up to 468 mW of electricity with an average output of 182 mW, enough to supply 200,000 homes. Cape Wind Associates, LLC, the project developer, expects that the turbines will generate enough power to supply 75% of the electricity demand for Cape Cod, Martha’s Vineyard and Nantucket.
The decision is precedent-setting, with some very important implications for energy markets and the environment. The project will reduce Massachusetts’s carbon emissions from conventional power plants by 700,000 tons per year. Nationwide, there are currently a dozen additional offshore wind projects, representing 2,500 megawatts of green power, in the planning or proposal stages that are now more likely to move forward. Experts agree that Cape Wind and additional wind farms can easily power more than one-fifth of the nation’s electricity grid, and some say that wind farms could be built in Texas, North Dakota, and South Dakota that could potentially power the entire U.S. electricity grid.
While it is likely that Cape Wind Associates and the global climate will benefit from this decision, the outlook for the average electricity consumer may not be so positive. On May 7, Cape Wind Associates announced that it would file a contract with state regulators under which National Grid would begin purchasing half of Cape Wind’s electricity for 20.7 cents per kilowatt-hour in 2013, about three times the price of the average monthly electricity rate for southeastern MA over the past four years. However, this cost figure will include the purchase of Renewable Energy Credits (RECs), which National Grid can sell to generators that need to purchase credits to fulfill their renewable energy portfolio requirements. In addition, the contract price would rise 3.5% per year for the 15-year contract, according to Cape Wind and National Grid. In terms of consumer prices, a homeowner or small business owner that uses 500 kWh per month will see their bill increase by about $1.59 per month, or 2%. However, according to the National Grid president Tom King, this energy price premium will be worthwhile in the medium and long run. He asserted, “We recognize that all renewable energy, be it on or off-shore wind, solar or other sources, has a cost associated with it. However, carbon-based electricity generation creates longer-term costs, impacting our health and our environment.”
Given that no new nuclear plants have been built in decades due to strong opposition and safety concerns, and that clean coal is very much an unproven technology, offshore wind looks promising. However, it is baffling that so many environmentalists oppose such projects. While it’s possible that the view of windmills may offend certain people native to the Bay State, and that the windmills could potentially disrupt some bird migration routes, it is important to step back and examine the bigger picture. When electricity demand is highest, it is not the hydropower and nuclear plants that fire up to supply the additional demand. Rather, natural gas and oil power are frequently the marginal producers, increasing pollution and carbon emissions. Both China and Western Europe are outpacing the United States in expanding their respective wind power capacities. The Cape Wind Project is an important first step in diversifying our energy portfolio, and quickly decreasing the demand on an aging and constrained power grid.
