Wednesday, May 02, 2007

Progress on Wind Power in Delaware

Two breaking developments mean that the prospect for wind power in Delaware is looking brighter. First, we have this interesting news from the PSC, via the News Journal:
Delmarva Power should contract with Bluewater Wind to build a smaller wind park than originally proposed, and Conectiv Energy to build a natural gas plant to back it up, according to a Public Service Commission staff report released today.
Bluewater, which wants to build an off-shore wind park, had originally proposed a 600 megawatt facility; the report suggests the PSC instead approve a 200-300 megawatt facility.
Here’s the punchline from the staff report, which is available as a PDF here:
Staff recommends exploration of building additional generation assets in southern Delaware, coupled with development of demand response programs, energy efficiency programs, renewable distributed generation, short- and long-term bilateral contracts, and market purchases. With respect to the bids, Staff recommends that the State Agencies direct Delmarva to negotiate with both Conectiv and Bluewater for a hybrid energy supply that combines a 200-300 MW offshore wind farm with a 150-200 MW synchronous condenser CCGT in Sussex County.
Delmarva has been pushing for the PSC to do nothing about new generating facility in Delaware. Earlier today, I posted a rather technical letter to the PSC on why continuing to rely on three year contracts, as is done now, does not protect consumers from price shocks:
While a long term supply contract creates a risk for the company, purchasing power every three years is not without risk. Specifically, three year purchases of power leaves Delmarva’s customers more exposed to the risk of future price increases—which is precisely the risk that the RFP is intended to ameliorate.
One reason Delmarva has resisted the RFP is that it doesn’t want to be saddled with more generating capacity than it can sell to its regular customers, which may be why the PSC staff are recommending a smaller wind farm.
But concerns about being able to use the full capacity of a wind farm should be ameliorated by the announcment today that the Delaware Municipal Energy Corporation has agreed to buy $200 million to $300 million of electricity from Bluewater Wind over a twenty year period:
The agreement between DEMEC and Bluewater Wind is for the offshore wind energy generator to supply electricity, associated capacity, and related environmental attributes (also called Renewable Energy Credits) to DEMEC for 20 years. The contract is the first in the nation to provide for the purchase and delivery of energy from an offshore wind park and is valued between $200 million and $300 million over the life of the contract.
Taken together, these developments mean that wind power has moved a long way towards adoption. But popular support is as important as ever. Go to the “Choose Wind” page at Delawareliberal to find out how you can help make wind power a reality in Delaware.
In the meanwhile, there's plenty of homework to do on today's developments. Check back for updates.

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