UPDATE 4/25: The New Bedford City Council briefly threatened to turn an easy touchdown into a fumble, but they managed to approve the contract.
A proposed wind power contract for New Bedford isn’t just feel-good – it’s look-at-this-giant-pile-of-money-we’re-saving-taxpayers.
As Ariel Wittenberg reports in the Standard-Times, the New Bedford City Council will soon consider a proposal to buy power from a planned wind farm in Plymouth after a subcommittee approved the plan that would save the city somewhere around 30 percent on energy costs:
The proposal, made by Mayor Jon Mitchell’s office, would enter the city into a power purchase agreement with Future Generation Wind LLC to buy wind-generated electricity at 10.8 cents per kilowatt hour for the next 20 years. […]
Scott Durkee, director of the city’s energy office, noted that the power purchase agreement will also save the city money. Currently, he said, the city’s lowest costing energy contracts are 11 to 13 cents per kilowatt hour, with the city paying closer to 15 to 17 cents per kilowatt hour on most contracts. Signing with Future Generation LLC is predicted to save New Bedford upwards of $20 million over the life of the contract.
Additionally, Future Generation LLC is offering to pay the city $250,000 in a sort of signing bonus meant to help further New Bedford’s efforts to become a premier port for offshore wind. Future Generation owner Keith Mann said he is also considering using New Bedford as the receiving port for his turbines.
It’s hard to overstate what a bargain this is – the best energy at the lowest price.
For some context, 28 states paid more than 10.8 cents is About per kilowatt hour for their electricity in February. And most of those states were sending the money out of state to buy coal and natural gas that polluted their air and added fuel to our climate crisis.
On top of all the benefits of cleaner air and climate protection, an extra million dollars a year is a huge deal in a city whose entire budget for FY2014 is $263 million. That’s an extra dozen or more police officers or teachers or city bus drivers. And on top of that, New Bedford businesses would get the boost from turbine construction.
Cross-posted from The Green Miles
Some context:
1. This project is 6 MW. Cape Wind is 468 MW. And, Cape Wind’s turbines will generate more energy (MWh) per MW installed because the location is windier.
2. Comparing the 10.8 cents annual, over 20 years, to what 28 states paid in February 2014 isn’t a sensible comparison. February generally has an above-average price; 2014 was extremely expensive due to the extended Polar Vortex cold snap. LMPs in 2013 and 2012 were significantly lower in many states.
3. The cities aren’t (so far as I can tell) buying the RECs; they’re just buying the energy. This is a bit wonky, but here’ goes: the municipalities are not buying wind energy. They’re buying energy. The “wind” portion — the REC — will be sold to someone else, probably a utility buying RECs to comply with public policy requirements (the RPS). This isn’t a bad thing at all, but it’s important to note: the “green” quality of the electricity is being sold, and not to the municipality, so that city or town has no (moral / rational / academic) right to claim that their energy is green.
The appropriate context is that munis right now sign contracts for electricity at about 15 cents per kWh; this deal is 10.8 cents. That’s all you need to know — the electricity is about 25% cheaper than their other deals. $1,000,000 a year is real money. Wind power lets it happen, we’re creating local construction and operations jobs, it’s a great deal for lots of folks. Kudos\, and more please!
in an email from Carlos Pineda, advisor to Keith Mann, that the project is 8MW, and is less expensive per MW than Cape Wind since it’s land-based.
8 is greater than 6. I’m glad it’s bigger than I thought.
On the other hand, price per MW is a lousy comparison, as they will have different capacity factors, different generation profiles, different O&M costs, etc. The pissy “less expensive per MW than Cape Wind” is just a circular firing squad — someone working in the wind generator business should know better than to use that lame comparison.
To be clear, this project is almost certainly cheaper than Cape Wind on a levelized cost of electricity (LCOE) basis. They’re both going after long term contracts, and the price per MWh for this Plymouth project is well below the contracts signed under 83 with Cape Wind. But (1) that’s irrelevant — both projects are great deals in the context of climate change and long term pricing, and (2) the grid relies on generators with a variety of properties to work in harmony. Off-shore wind provides certain things (ELCC/MW, generation profile more compatible with PV) better than on-shore wind. On-shore wind provides certain things ($/MWh) better than off-shore wind. Again, S’OK. There’s plenty of room for both, no need to be pissy.
Congratulations – you just won today’s Captain Obvious award!:)
with “greater” meaning both larger and better, midshipman.
Didn’t pick up on that.
I always pictured Captain Obvious as a superhero*. Didn’t know he was in the Navy.
* A superhero making regular appearances on Whose Line Is It Anyway?
Not to be contrary – but why not hydro Quebec much cheaper per kwh – visiting my friend in Montreal – he heats with electricity.
To figure the true cost of wind kwh – you have to add in the 2.3Khw tax credit – and the loss of revenue to local cities and towns as I believe solar and wind is exempt from property taxes.
A few bits:
1. Wind and solar typically ends up signing PILOTs, so the tax exempt issue is far more grey. Unless the wind project in your town closes down some other generator in your town, there’s no actual loss of tax revenue for the town anyway.
2. There’s also economic activity associated with the construction of wind and solar — far more per kWh than a fossil plant or a transmission project. Employees pay income tax, sales tax, etc.
3. Hydro Quebec requires a major transmission investment. It turns out that many of our fine friends in New Hampshire don’t want those large poles and mowed down right-of-way running through their communities.
4. You claim it’s “much cheaper” without any sources. Your friend in Montreal happens to live far closer to Hydro Quebec than we do — and, being a Canadian, is subject to an entirely different set of rules, regulations, and taxes.
I don’t know if a major expansion of Canadian Hydro for New England is an economic idea. I don’t know the environmental impacts either — there is some carbon emissions associated with hydro (due to vegetation being decimated where the storage pond is developed and growing and rotting plants due to varying levels in the pond), and of course there are local ecologic impacts as well. Of course, there’s also terrible environmental consequences to oil, gas, and coal. What I do know is that Canadian Hydro is on the minds of policy makers and the managers of the grid, and that Hydro Quebec has an office in Hartford, CT precisely to ensure that movers and shakers in New England are aware of all of the benefits HQ could offer.
I also know this: even if we built five times the transmission being proposed under Northern Pass (1,200 MW capacity), there’d still be plenty of room for more renewable projects to be built in New England. After all, today’s load is expected to peak at 14,550 MW — twelve times the proposed capacity of the Northern Pass transmission project designed to bring Hydro Quebec into New England.
I know when conventional power plants go off-line – they are responsible for replacement power at pretty high rates – does the same rules hold true for wind ?
I think land based wind can work – but it should work without tax incentives.
Coal, oil, gas & nuclear all get taxpayer subsidies and Congress refuses to roll them back. Why shouldn’t clean energy get the same help?
big difference.
Calling oil and gas deductions for manufacturing is entirely different than getting a credit for generating electricity.
We should not call manufacturing costs a subsidy, wind and solar is certainly entitled to the same “subsidies” that oil and gas get – they may not get the same “subsidy” in Massachusetts because they are not paying property taxes.
“Back charges?” While different ISOs have different rules, loosely speaking, it works like this: if (a) you bid on the capacity market and clear, and (b) if there is a peak load situation, and (c) if you don’t have prior “permission” to go off-line, and (d) assuming that there are no market manipulation shenanigans going on, and (e) if the power plant doesn’t sign a contract with a generator or generators who didn’t clear the capacity market to be available during the outage, and (f) if you’re not providing the capacity that cleared the market, then you may have to return your capacity payment or pay a penalty. The details of this rule are in flux right now, with a so-called FERC jump ball decision coming one of these days. How often does this apply to wind (a) – (f) inclusive? Not often it turns out.
I know the reliable base line sources (nukes and gas now) are very worried about getting knocked off-line and paying large penalties. But we obviously cannot depend on just wind and solar (we don’t have the storage and will never build another pumped storage facility) – so it seems to me wind and solar should be selling at a significant discount on the ISO market. Getting back to the original post – this cost per Kwh seems awfully expensive and not cheap – and even more so for Cape Wind.
There are NE ISO markets for capacity, energy, various ancillary services, and then some. Wind and solar make their money on the energy market — not the capacity market. The energy market doesn’t pay for reliability. You can think of it as paying to avoid using (and paying for) natural gas generation.
As far as dependability, there is nothing upon which we can or should depend on 100% of the time. Fossil plants break or, in the case of gas, haven’t acquired sufficient pipeline capacity to ensure that they stay on during cold winters (such as Jan-Mar 2014 in New England). Nuclear plants have outages, not just planned (refueling) but also, for example, when their intake water is too warm, which just so happens to coincide with unseasonably hot summer days and very high AC load. Because nothing is 100% reliable, we use a technique called effective load carrying capacity (ELCC) which calculates, in a systematic and not anecdotal way, what the capacity value of any given resource is to the system — including nuclear, fossils, and intermittent renewables.
As for what seems “awfully expensive and not cheap”… to me, the cost of asthma, COPD, nervous system damage due to mercury, and other health impacts of fossil plants seems awfully expensive and not cheap. The loss of mountaintops seems awfully expensive and not cheap. The damage due to hydrofracking seems awfully expensive and not cheap. Climate change seems awfully expensive and not cheap. The pricetag of new nuclear power plants seem awfully expensive and not cheap. When looking through that lens, the cost of new wind, solar, and where necessary new transmission seems cheap by comparison.
Along with other charitable donations and employees. But my larger point is there are 5 nuclear plants under construction, 2 in GA, 2 in SC, and 1 in TN. 24 other proposed plants are mostly in the south. Oh, all are 100% American-made materials, can’t say that about many turbines and solar panels.
Massachusetts needs to get in the game and incentivize Entergy to build Pilgrim II. Consistent 24/7 reliable power with virtually no CO2 output must be a priority of the next governor. Relying on the weather to supply our energy needs, while laudable, is laughable given the economic competition in other states.
How many billions in taxpayer incentivizing are we talking?
2 super-safe plants will be online in about 2 years. That’s a bargain! How much did we take a bath on the GM bailout? $500 million wasted on Solyindra. At least these loans will be paid back in full with interest.
Dan, nuclear is projected to cost 10.84 cents/kwh in 2018. This project is 10.8 cents/kwh & the price of onshore wind is projected to fall to 8.66 cents/kwh by 2018. Why would we give nuclear a dime?
Government Turns Bailout Profit Despite GM Loss – Liberal hippies at the Wall Street Journal
Pilgrim I supplies 14% of the regions electricity and the plant won’t last forever. With the controversy with fracking for gas, I am afraid, as Charlie has mentioned, that natural gas prices can spike and/or go way up down the road.
I am not against some wind programs, but am against Cape Wind due to its power generating cost, I think 19 cents/kwh. It’s not why should taxpayers give a dime to nuclear power, we already are. So lets get in the game, create an economic construction boom, clean green energy which pays millions in real estate taxes and has hundreds of jobs.
The tarp money turned a profit b/c of CitiCorp and Bank of America. We, the taxpayers, lost $10 Billion on GM and $15 Billion on Chrysler and GM Financial.so lets get some of that money we helped Ohio and Michigan, and have their taxpayers subsidize a loan for Pilgrim II.
Nuclear power operators don’t pay for insurance — the Feds cover that. They also don’t have a financial plan to take care of 100% of their waste until it is inert — the Feds will help with that too.
Stomv, as you probably know Vogtle is being built with CWIP, which makes the loan guarantees almost like double dipping.
The telling point to me is that none of the private nuclear investors have been willing to put up a nickle of their own money. It’s all from ratepayers & taxpayers.
I doubt very much that Entergy will be paying taxes for even a tiny portion of that period. This is also the company that operates the leaking Vermont Yankee plant.
There is always Yucca Mountain.
bluemassgroup.com/2013/07/know-nukes-plymouth-approves-dry-cast-storage-for-pilgrim-nuclear-plant/
The dirty hippies at Forbes magazine say Nuclear Waste Will Never Be Laid To Rest At Yucca Mountain:
Perhaps future generations will dive down through the waves to visit the Plymouth nuclear waste dump.
> 5 under construction.
TRUE!
> 24 other proposed plants are mostly in the south.
And there’s no evidence that a single one of them will be built, because they’re so expensive that even pro-business groups like the Florida legislature is now actively opposing ratepayer-backed construction. Oh, did I not mention that? In all cases, the utility won’t build the nuclear plant unless the commission pre-emptively puts the ratepayers on the hook for all the costs, even if the thing goes way over budget and doesn’t work.
> Oh, all are 100% American-made materials
Nope.The containment vessel is manufactured in Japan because their steel skills are superior. The fuel, BTW, typically comes from Australia, and almost certainly won’t come from tUSA.
> Consistent 24/7 reliable power with virtually no CO2 output must be a priority of the next governor.
First of all, no generator, including nuclear, operates 24/7. Nuclear capacity factor is about 92% — meaning that about 1 hour out of every 12, it isn’t operating. Those hours are lumped together, occurring every 12, 18, or 24 months, for a re-fuel. Now, here’s the other bit: it turns out that electric demand isn’t constant, which makes nuclear problematic because it is inflexible.