Wednesday, March 05, 2008

"They may beat us to the punch."

So says University of Delaware professor Jeremy Firestone in today's News Journal:
Jeremy Firestone, an associate professor in the College of Marine and Earth Studies at the University of Delaware, said the fact that New Jersey is actively seeking an offshore wind farm is an indication that Delaware's on the right track. But, he added: "They may beat us to the punch."
Three companies, including Bluewater Wind have submitted proposals to build offshore wind in New Jersey. The article points out some of the ways in which the New Jersey deal would be differently structured. First, New Jersey is offering a direct subsidy to help build an offshore wind farm. Second, a power purchase agreement (PPA) is not required, though the companies are seeking long term buyers for the power they would generate:
Unlike Delaware, New Jersey does not offer a long-term power purchase agreement with a utility, meaning the bidders would have to seek power purchase contracts on their own, or sell the power on the day-to-day open market.
I think it's unlikely that a wind farm of this size would be built without a PPA of some sort. Investors in a power plant of any sort want to see a revenue stream before putting their money down. Delmarva Power is seizing on the lack of a required PPA as a reason to kill the Bluewater Wind project in Delaware, even though it's a common tool in financing power plants.
So let's talk about the PPA. Delmarva Power doesn't like it. As a customer, I do like it. I like the long term prices stability Bluewater's PPA would provide.

The opponents of offshore wind in Delaware have tried to paint the PPA as a burden, saying it should be imposed or should be spread over a larger customer base. But if fossil fuel prices continue to climb, then the customers "locked in" will reap a benefit over the 25 years.
I want that benefit. Delmarva Power doesn't want to provide it. But then Delmarva Power doesn't represent me. The General Assembly does.

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