Thursday, May 08, 2008

Delmarva Power Won't Tell Us Much about Onshore Wind Bids

The News Journal has the story on Delmarva Power's latest announcement on its plan to buy onshore wind power from out of state in an effort to head off signing the agreement with Bluewater wind:
Delmarva Power says it hopes to sign long-term contracts with six developers of new land-based wind farms.
But Delmarva officials declined to publicly release the bids, citing competitive confidentiality.
So Delmarva Power has a great deal, but it won't tell us much about it. All we have from Delmarva Power is a one page press release claiming that the bids for out of state onshore wind power are better than the Bluewater Wind project, which has been the focus of intense public scrutiny for more than a year.
The press release quotes Gary Stockbridge, "The dollars saved are a true, all-in comparison to the offshore proposal." But since we don't have the numbers, I guess we are going to have to take his word for it.
I can think of several reasons why we should be wary of Delmarva's claims about onshore wind being a better deal. The company is proposing shorter contract lengths, which means less price stability. The transmission costs are not spelled out. We don't even know if and when the wind turbines have or will be built.
Perhaps most significantly, we don't know enough about the reliability of the onshore wind projects to make a meaningful comparison. All kilowatts are not created equal. Price is related to reliability. A kilowatt is more valuable if I have a better idea when it will show up on the grid.
For instance, the Bluewater Wind agreement would sell Delmarva Power up to 300 MWs, even though the turbines will be able to produce 450 MWs. This enhances the reliability of Bluewater's output, which makes its output a better product.
What Delmarva Power's assertions about the relative costs of its onshore wind bids have in common with its inflated claims about the cost of offshore wind is that none of these numbers have been confirmed by any experts outside the company, and haven't been reviewed by the Public Service Commission.
Given Delmarva Power's record on using numbers at variance with PSC findings, we have reason to be skeptical about the company's claims about onshore wind.


Anonymous Anonymous said...

Doesn't the resolution/law stipulate that the additional power be locally generated? How does Delmarva justify their refusal to meet this mandate?

6:11 PM, May 09, 2008  
Blogger Tom Noyes said...

Yes it does. The law is HB 6 or Electric Utility Retail Customer Supply Act of 2006. The relevant section reads:

DP&L shall file on or before August 1, 2006 a proposal to obtain long-term contracts. The application shall contain a proposed form of request for proposals (“RFP”) for the construction of new generation resources within Delaware for the purpose of serving its customers taking Standard offer Service.

6:21 PM, May 09, 2008  

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