Cape Wind Power Will Cost Twice As Much, But Opens Door to Other Projects

In a sign of the uphill battle offshore wind power has in winning over skeptics, electricity from the nation’s first wind farm off Cape Cod is expected to cost twice as much as that from conventional sources.

But at the same time, approval of the 130 turbine Cape Wind project has upped the prospects of 11 other offshore wind projects around the country, a new report says.

Twice as much, at least to start

National Grid, the first utility to agree to buy electricity from Cape Wind, will pay 20.1 cents per kilowatt hour, about double what utility customers now pay.

That does not mean rates will double. In fact, the utility says that adding Cape Wind’s renewable energy will only add $1.59 to the average customer’s bill. Nonetheless, the stark difference in pricing has handed critics a stick with which to whack away at the 468 megawatt project.

Audra Parker, president of the Alliance to Protect Nantucket Sound, which opposes the wind project, told the Boston Globe, “we now know that Cape Wind energy will not be cost effective for National Grid customers.” The Alliance has also hung on news that rates could go even higher if Cape Wind does not received federal renewable energy tax credits.

But Governor Deval Patrick of Massachusetts defended the price gap, telling the Boston Herald the Bay State needs a variety of clean-energy fuels. “We need it all,” said Patrick.

Cape Wind developers have recently been in talks with another utility, NStar, although neither would comment.

Looking for scale

Renewable energy like wind and solar typically falls in price as economies of scale develop, but those economies can only develop as more projects are built.

According to a report from SBI Energy, a research firm, there are 11 offshore wind projects in various stages of development around the United States. By 2012 the offshore wind market should reach $62 billion in the US, rising to $78 in 2015, according to the report.

The Huffington Post has a nice slide show of future wind developments, both off-shore and on.

According to a report from IHS Emerging Energy Research, the US wind power market is expected to grow more slowly in 2010 compared to last year. The report predicts an 6,300 to 7,100 megawatts of wind power capacity will be added in 2010, compared to a record-breaking 9,800 Mw added in 2009.

BC (Ben) Upham is a freelance writer based in Los Angeles. He has written for the New York Times, and was a writer and editor for News Communications, Inc., a local paper consortium serving Manhattan. When he's not blogging on green issues -- and especially renewable energy -- he's hiking in the Angeles Mountains or hanging out at El Matador.