Published on April 19th, 2018 | by Tina Casey0
Cost, Schmost! Energy Dept. Touts Coal-Killing Atlantic Offshore Wind
April 19th, 2018 by Tina Casey
The US offshore wind industry ran into some mighty stiff headwinds under the Obama Administration, but that was then. Now the logjam is breaking, and the Trump Administration is overseeing a burst of activity along the Atlantic Coast. That’s kind of weird, right? After all, President* Trump is not a particular fan of renewable energy. For that matter, he ran his successful 2016 campaign on a pledge to bring back coal jobs. Any significant movement in the offshore wind industry will simply pound another nail into the coal coffin.
Be that as it may, the fact is that the Trump Administration has been actively promoting offshore wind development, and the Energy Department’s Lawrence Berkeley National Lab has just put the spotlight on a fresh angle: the value — not cost, value — of Atlantic offshore wind.
US Offshore Wind: What About The Cost?
For those of you new to the topic, offshore wind in the US can be generally divided by west and east coasts. The Pacific coast is problematic because its deep waters generally prohibit the use of conventional offshore turbine towers. Instead, some type of new floating turbine is required, and that has yet to be. It’s not for lack of trying, but offshore development along the Pacific coast is going to take a while.
The Atlantic coast is a horse of a different color. Its relatively shallow waters could be populated with conventional offshore turbines with relative ease, except for those pesky political headwinds.
In December 2016 the state of Rhode Island finally revved up the first commercial offshore wind farm in the US, and now several other Atlantic coast states are piling on with big plans of their own.
One good example is Massachusetts, which could be on track to hook up a new offshore farm with a massive pumped hydro energy storage project.
You can also expect strong movement in New Jersey. Former Governor Chris Christie blocked offshore wind and other decarbonization initiatives in the state (shocker!) for eight years, but newly seated Governor Phil Murphy is turning things around.
That’s kind of like turning an ocean liner around, though. On January 31 Murphy issued an executive order directing the state’s Board of Public Utility to start complying — finally — with a 2010 legislative mandate for wind power, but as of March the agency was still operating in Christie mode.
Our friends over at NJSpotlight.com have the explainer, including a poke at the political factor:
BPU Commissioner Richard Mroz cautioned about those costs.
“As of this day, we have no foundation to know what offshore wind will cost,” said Mroz, who during a stint as agency president under Christie took no action to push the technology forward, nor the regulations to finance the offshore wind farms. “In the future, we will confront very tough decisions to make.”
Fellow BPU Commissioner Diane Solomon agreed. Referring to offshore wind, Solomon, a fellow Republican, said: “It must be economically competitive and benefit ratepayers. It’s prudent to move ahead cautiously.”
If you caught that thing about cost, you’re on to something. The cost of constructing a wind farm is one thing, but the exclusive focus on cost distracts attention from another important element, the market value of offshore wind. That’s where the new Berkeley Lab study comes in.
It’s no surprise that the issue of cost is raised whenever the topic turns to objections about offshore wind, but that certainly didn’t bother Rhode Island. Anyways, according to that new study from the Berkeley Lab, focusing exclusively on the cost of wind development misses the forest for the trees.
In its new study, titled “Estimating the Value of Offshore Wind Along the United States’ Eastern Coast,” Berkeley Lab makes the case for offshore wind based on value, not cost.
An earlier CleanTechnica piece runs down the study in detail, but for those of you on the go, the gist of it is the answer to this question: “What would the marginal economic value of offshore wind projects along the east coast have been from 2007 to 2016, had any such projects been operating during that time period?”
Good question! The study describes a considerable range of values that closely tracks geographical locations along the coast:
The study finds that the historical ‘market value’ of offshore wind (considering energy, capacity, and REC value) is highest for sites off of New York, Connecticut, Rhode Island, and Massachusetts—i.e., all areas where offshore wind is being actively pursued—and lowest for sites along the southeastern coast…
Population density also comes into play:
The ‘market value’ of offshore wind is found to have exceeded that of land-based wind, due to offshore wind sites being located closer to major population centers and also having a time-varying profile of electricity production that is more-correlated with that of electricity demand.
The bottom line is that the value of Atlantic coast offshore wind power can vary “significantly,” with location being the primary factor and taking into consideration the timing of available wind resources, and the pricing and market rules that govern different power markets.
More Offshore Wind Power!
Berkeley Lab doesn’t just leave things dangling there. The study also suggests some pathways for enhancing the “value proposition” for offshore wind.
One example would be a set of strategies for interconnecting high- and low-cost locations. Energy storage also comes into play.
Here’s the key point:
Whether any of these strategies, and offshore wind more generally, is economically attractive will depend on tradeoffs between value and cost.
Somewhat coyly, the study also mentions that the cost of wind power has dropped significantly in Europe. In other words, if we do what they’re doing, cost will be even less of an issue.
As for the rest of the Energy Department’s other promotional activities for wind power, the CleanTechnica archives are stuffed with examples from last year. Some of them seem deliberately timed to undercut the Commander-in-Chief’s coal messaging, but that’s a whole ‘nother can of worms.
So far this year the activity seems to have slowed down somewhat, though the agency did toot the US wind energy horn in an obscure blog post in January.
It’s also noteworthy that Interior Secretary Ryan Zinke personally made a vigorous case for Atlantic offshore wind at a conference last month, but that, too, is a whole ‘nother can.
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