Deepwater Wind recently completed construction on the last of five massive, 6 MWe peak capacity wind turbines that make up the 30 MWe Block Island Wind Farm. By the end of 2016, the developer expects that the project will enter commercial operation and begin providing the first electricity from offshore wind turbines to the U.S. electricity grid. It is a development with far-reaching implications and several lessons available to be learned.
This modest-sized installation has been in the works since 2008. Initially, the public utility commission (PUC) rejected the project’s negotiated power purchase agreement (PPA) on the basis of excessive cost. In 2009, the state legislature passed a law supported by Governor Carcieri tasking the PUC to prioritize non-economic project benefits like creating a new industry with local employees and producing clean power.
The project will qualify for the 30% of project cost investment tax credit (ITC) in lieu of the production tax credit (PTC), although, the developer has not yet made it clear how much of those costs will qualify for the credit. Currently, Deepwater Wind’s agreement is with National Grid, which will mix its production with other wholesale power supplies and pass the PPA costs to all of the customers that it serves.
The project has connected the offshore wind turbines to the grid. Block Island will no longer need to generate its electricity by burning high cost, high pollution diesel fuel in locally operated and maintained generators. The new undersea cable allows Block Island Power Company to become a distribution-only utility. It will purchase its power from the New England grid at a much more affordable price than is possible when burning diesel fuel. Once the wind farm is in operation, Deepwater Wind hopes to move on to additional projects, including one that is aiming to serve Long Island, another island with high electricity rates and a power supply system dependent on burning oil.