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Sunday, January 22, 2012

Deepwater Wind moving

Deepwater Wind Farm Slowly Pushes Ahead

By TIM FAULKNER/ News staff
The Deepwater Wind project cleared some major hurdles in 2011. The offshore wind farmer had its controversial electricity purchase deal with National Grid upheld in state Supreme Court. The state Public Utilities Commission also brushed aside an appeal of the price agreement in November.

This year, Deepwater Wind has dozens more permits and approvals to secure before beginning construction on the five-turbine, 30-megawatt wind farm off Block Island. If completed by 2013 or 2014, it would likely be the first water-based wind project in the United States.

But the bureaucratic hurdles are numerous. Approval is needed from the Army Corps of Engineers, the Bureau of Ocean Energy Management, the state Department of Environmental Management (DEM), the Federal Aviation Administration and several planning and zoning boards and commissions on Block Island and South County — just to name a few.
Even with a mountain of compliance to overcome, Jeffrey Grybowski, chief administration officer for Deepwater Wind, doesn't expect significant delays. "We foresee approval of our applications. We don't see any flaws in the project as it relates to permitting," he said.
Hearings recently commenced on Block Island regarding the construction of a proposed substation on property owned by the Block Island Power Co. Permitting also will resume for an undersea cable, which requires meetings with the Coastal Resources Management Council (CRMC) and a fishermen's advisory board, as well as public forums with commercial fishermen and the community.
Disruption to sea life and commercial fishing is expected to be minimal, Grybowski said. But more studies will be done to limit potential harm to sea life. "The bottom line is there will be some temporary interruption of fishing activity during the construction phase of the wind farm and the (power) line," he said. "But we don't expect there will be any long-term impacts on commercial or recreational fishing."
Hearings also are planned in Narragansett to address the undersea cable's mainland connection at Narragansett Pier, as well as the cable's path to a transmission station in Wakefield.
Last month, a Deepwater Wind project off Delaware was suspended over funding issues. Part of its demise was blamed on the termination of federal loan and funding programs for offshore wind development.
Yet, investors are still interested in putting money into the company's $250 million Block Island wind farm project, Grybowski said. Investors include utility companies, private equity funds, hedge funds and manufacturing companies, he noted. "They aren't only going to be local partners, they are going to be global partners."
Typically, investors receive a stream of income throughout the 20-year period of the power contract. Deepwater Wind will receive 24.4 cents per kilowatt-hour for its electricity, with an increase of 3.5 cents per year. 
William Ferguson, director of The Energy Council of Rhode Island (TEC-RI), an alliance of big-energy users such as Brown University and Hasbro, said the price, which is ultimately paid through increases in utility bills, is far too high.
A 2007 report authorized by former Gov. Donald Carcieri estimated the power purchase price to be 9.5 cents per kilowatt-hour. Costs estimates, however, have gone up as natural gas drop. Currently, standard electric rates cost about 7 cents per kilowatt-hour.
The 2007 report also promised a reduction in domestic use of foreign oil. "That's already been done," said Ferguson, referring to the dramatic increase in domestic natural gas drilling. "The other reason for offshore wind was price stability, but the opposite has happened."
As natural gas supplants oil and coal power, carbon emissions have dropped, lessening the urgency for switching to renewable energy systems, according to Ferguson.
As other renewable energy projects move ahead, he's telling politicians and policy makers that TEC-RI still favors wind projects, but only those based on land. The 13 cents per kilowatt-hour set last year by the state is reasonable, he said. But offshore wind power from Deepwater Wind and Cape Wind are too expensive for ratepayers, Ferguson said.
"Maybe in time wind will make sense, but it doesn't make sense now or in the immediate future," Ferguson said.
Nevertheless, Deepwater Wind has it sights on a 200-turbine offshore project, dubbed the Wind Energy Center, in waters shared by Rhode Island and Massachusetts. Currently, Deepwater Wind is looking for approval from the Department of Interior to lease a portion of federal water zoned for such projects. Another slew of approvals would be needed from Massachusetts and Rhode Island before construction could begin in 2014 or 2015.
The Block Island project, however, will have some notable benefits, according to Grybowski, such as shutting down Block Island's diesel-powered generators. Switching to wind will not only slash power costs for utility customers on the island from the current rate of 40 to 60 cents per kilowatt-hour, but harmful diesel emissions will be eliminated, he said.
"From the larger regional perspective, one of the primary benefits is the environmental benefit, taking those — what are probably the dirtiest generators in Rhode Island — offline," Grybowski said.