Source: Boston Globe | Ann Berwick
The mood was optimistic at the 2016 US Offshore Wind Leadership Conference in Boston on February 29 and March 1. The event , hosted by the advocacy organization OffshoreWind: Massachusetts, brought together some 300 developers, experts, and legislators. And while Matthew Beaton, the state’s secretary of energy and environmental affairs, said wind needs more study, others were less guarded. “Offshore wind is poised to take off in the United States,” US Senator Ed Markey said in his keynote address. Two days later, after meeting with developers, Massachusetts House Speaker Robert DeLeo told the Greater Boston Chamber of Commerce that the state has “the opportunity to launch a new industry that is successful in other parts of the world, right here at home.”
But when it comes to any discussion of wind energy here, the 400-foot turbine in the room is always Cape Wind, the long-embattled project that is virtually synonymous with offshore wind in the United States, sometimes for the better, often for the worse. So let’s start — but not stop — there.
Cape Wind is the baby of Jim Gordon, who first proposed erecting 170 wind turbines in Nantucket Sound 15 years ago (the plan was later changed to 130). He has spent most of the years since then in permitting struggles and litigation. That’s because even though his chosen site is in a number of ways ideal — a shallow shoal close to some of the country’s largest electrical load — it is in other ways terrible. Nantucket Sound is a busy place for recreational boating, commercial fishing, and air and ferry traffic. Even worse, the site is 5 miles from Cape Cod and 9 miles from Martha’s Vineyard, then in view of powerful residents like the late Ted Kennedy and Walter Cronkite. Many of their wealthy neighbors, including billionaire Bill Koch, helped fund the Alliance to Protect Nantucket Sound to stop the project.
Over the years, Cape Wind has defended against more than 20 lawsuits (it won almost all of them, with several still pending). It was also criticized because it would produce electricity that is more expensive than power generated by fossil fuels, though the sides marshaled competing claims on the actual costs to customers. The Alliance to Protect Nantucket Sound said that, based on Cape Wind’s contract with NStar, it would amount to a $3 billion rate hike to Massachusetts over the life of the project; Cape Wind said its analysis in fact showed $7 billion in savings to the New England wholesale electrical market over those 25 years. (The Massachusetts Department of Public Utilities, which I chaired at the time of approval of the contracts, found that the National Grid contract would have increased the bills of residential customers by about 1.5 percent.)
However, progress on Cape Wind stalled more than a year ago, when Gordon missed an important financing deadline and National Grid and NStar (now Eversource) walked away from their contracts to buy three-fourths of the project’s power. Gordon is still fighting for Cape Wind — he says he “eagerly anticipates” competing with other offshore wind companies — but the outlook remains uncertain at best.
In light of Cape Wind’s contentious history, it might seem ridiculous to suggest that Massachusetts could be on the verge of finally building an offshore wind industry — or that it would want to. But the industry has come a long way, and now is the time to get behind it.
In recent years, generating electricity using offshore wind has become wildly successful in Europe. At the end of 2015, it had 3,230 offshore wind turbines in a total of 84 farms, providing enough electricity to power more than 7 million homes.
This experience (and improvements in technology) is also bringing down costs. By the mid-2020s, experts forecast that prices in Europe for electricity generated by offshore wind will be about 40 percent less than the starting price proposed by Cape Wind. By then, international energy giant Danish Oil and Natural Gas wants its wind farms’ electricity prices to be competitive with natural gas.
Meanwhile, federal law in the United States has become more hospitable, too. In 2009, the Bureau of Ocean Energy Management issued regulations that, in part, govern planning, site assessment, and leasing of offshore wind areas. The bureau has now leased hundreds of thousands of acres off Massachusetts and Rhode Island — an area of persistent gusts that has been called the Saudi Arabia of offshore wind — to commercial developers. The wind turbines closest to shore would still be about 15 miles away, three times farther out than Cape Wind , making them barely visible in good weather and removed from heavy commercial activity.
Rhode Island’s Deepwater Wind won an auction to lease 165,000 acres in 2013, with an eye on constructing as many as 200 turbines. The company says those could produce up to 1,200 megawatts of electricity, enough to power roughly 350,000 homes. Deepwater Wind is already building the nation’s first offshore wind farm, a five-turbine pilot facility off Block Island, scheduled to start generating electricity at the end of the year.
Two other leases are now held by companies looking to build on more than 350,000 acres off Massachusetts. Those projects could generate more than 2,000 megawatts of clean energy, enough to power some 700,000 homes. (The Pilgrim nuclear power plant in Plymouth has only a third of that capacity — just 680 megawatts.) Together, says Bureau of Ocean Energy Management director Abigail Ross Hopper, they put Massachusetts “at the forefront of offshore wind development in the US.”
One of the companies, New Jersey-based OffshoreMW, has an experienced backer in private equity titan Blackstone Group, which funded a major wind farm in the North Sea and is planning several more projects. OffshoreMW says it’s committed to building here, but is waiting to announce specific plans until the Massachusetts Legislature weighs in on offshore wind, expected to happen this spring.
The other company, Danish Oil and Natural Gas, has an even more impressive track record, having built 14 offshore wind farms in Europe, including the world’s largest: the 175-turbine London Array. Its project planned for the waters off Massachusetts would be its first in North America. Bay State Wind, as it’s called, could include up to 100 turbines generating as much as 1,000 megawatts of electricity, more than double Cape Wind’s proposal.
Offshore wind developers are certainly set on Massachusetts. And there are many reasons why it’s time to capitalize on their renewed interest.
OVER TIME, THIS REGION has become worryingly dependent on natural gas. In 2000, New England used natural gas for 15 percent of its electricity generation. It’s now 49 percent — and rising. Though low at the moment, natural gas prices historically have been extremely volatile, and overdependence on one fuel is risky from a both a price and reliability perspective.
In addition, the Pilgrim nuclear plant is scheduled to close within the next few years. When it does, the state will lose more than 80 percent of its carbon-free electricity. State law requires Massachusetts to reduce its use of fossil fuels by significant amounts by 2020, and even more thereafter, and it will need all of its renewable resources to comply. Offshore wind is one of the region’s largest potential sources of clean energy, together with solar and hydroelectric power.
And because Massachusetts doesn’t have coal, oil, or natural gas — the fossil fuels that generate most of our electricity — the state sends the greater part of its annual energy dollars ($21 billion in 2013) elsewhere. The companies looking to do business here argue that offshore wind will help change that by creating local jobs — building and maintaining wind farms, of course, but also manufacturing, transportation, and a range of support services. The European industry, albeit much larger than the burgeoning New England one, had provided 75,000 jobs by 2014, according to the European Wind Energy Association.
Massachusetts is missing just a single piece of policy to truly launch offshore wind: a state law that would require electric utilities to buy a specified amount of power from wind farms, even if it comes at a premium. Because new types of generation usually cost more than conventional resources, this kind of measure is necessary until experience and economies of scale have a chance to bring the price down. And, of course, the price does not fully reflect the health and environmental costs that come with conventional resources.
An omnibus Massachusetts energy bill expected to soon come up for debate in the state Legislature might include such a provision and probably will also address hydroelectricity, wind, and natural gas. Among the measures being considered is a requirement that Massachusetts purchase 2,000 megawatts of offshore generating capacity over ten years. That’s enough to jump-start a new industry, Ocean Energy Management’s Hopper says, not just a one-off project.
It’s at that scale that cost savings can kick in. A new study by the University of Delaware determined that a 2,000-megawatt commitment by Massachusetts, together with advances in technology, could lower costs over the next decade and a half by as much as 55 percent. “The key is making a firm commitment to scale, so the market can do its work,” reported lead author Willett Kempton. “By providing market visibility — the state’s commitment to a pipeline of projects over a set period — the offshore wind industry in the US can deliver energy costs on the kind of downward trajectory seen in Europe.”
There are too many potential benefits to offshore wind to ignore. It can create an entire industry and the jobs that go with it. It can replace the clean energy from Pilgrim many times over. It can decrease dependence on natural gas and other fossil fuels. Its cost is coming down. So even though the conversation about offshore wind in Massachusetts started with Cape Wind, it shouldn’t end there.