All the insiders knew the electricity prices for New England’s first major offshore wind farm would be good. But not this good.
New contracts between Vineyard Wind and the three electric utilities in Massachusetts have been the talk of the energy industry since they became public this month. The prices are at least less than half of what we’ve seen for other offshore wind contracts in the US. Remember Cape Wind? That failed project had contracts to sell electricity for roughly three times as much -- and it would have been closer to shore, making it easier to build.
A Bloomberg NEF analyst issued a report saying that the contracts with Vineyard Wind -- owned by Avangrid and Copenhagen Infrastructure Partners -- show that cheap offshore wind power can be found outside of Europe now. Even Associated Industries of Massachusetts, a fierce Cape Wind foe, meted out praise. It’s hard to precisely predict the ratepayer impact, but the Baker administration sees potential for modest savings.
So what gives? Competition, for one thing. Cape Wind was the only show in town a decade ago. Three bidding teams badly wanted these contracts. So they sharpened their pencils. The Vineyard Wind crew was further along in permitting, allowing it to capitalize on a soon-to-expire federal tax credit.
Then there’s the march of technology. Cape Wind’s turbines would have been 3.6 megawatts, considered cutting edge at the time. But now, the trend is for larger windmills that can spit out up to 12 megawatts. (Vineyard Wind turbines’ capacity will be either 8 or 10 MW.) More electricity per tower, for sure. Also, these turbines can go in deeper seas, where they can harness more powerful winds.
Vineyard Wind’s 100 turbines will be built nearly 15 miles south of Martha’s Vineyard. That’s another advantage over Cape Wind. Fewer views to be interrupted. (However, fishermen are again raising concerns, and many Yarmouth residents oppose a proposed mainland connection.) Cape Wind, it turned out, was too early in the game.