LIPA About to Level Major Blow on Clean Energy in New York

2007

Sep

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The Long Island Power Authority’s (“LIPA”) 140 megawatt, $811 million Offshore Wind Park project - one of the New York City metropolitan area’s most controversial projects in recent memory - appears to be dead in the water. The Wind Park was to be located off Long Island’s South Shore, about 3.6 miles into the Atlantic from Jones Beach, and include forty 260 foot tall turbines across an eight square mile area. The design called for 3.6 megawatt turbines, each consisting of three 182 foot long blades, that would produce electricity at wind speeds between eight and fifty-six miles per hour (above which the turbines shut down); the optimal wind speed for these types of turbines is between twenty-seven and thirty-six miles per hour. The Park’s electrical output would have been sufficient to power 44,000 Long Island homes annually; the image above is a rendering of the project looking off of Jones Beach.

Despite the project’s promise for clean energy, LIPA Chairman Kevin Law is expected to terminate the plan at a September 22 board meeting, citing the Park’s rapidly rising costs.

The project’s developer, FPL Energy, won the contract back in 2003 with a bid of $356 million; by October of 2006, the cost had swelled to $650 million, and LIPA believes that it could ultimately pass $1 billion. Law told New York Newsday that his decision was “based strictly on the costs” as presented in a study prepared by LIPA consultant Pace Global Energy. The Pace study concluded that the “levelized green premium” for wind power, when compared with the cost of a natural gas plant on Long Island, was $66 million annually over twenty years- or $2.50 per month per residential customer. Back in 2002, another LIPA consultant calculated that the project’s electricity would cost between six and nine cents per kilowatt hour; at the time, LIPA was paying 4.5 cents on average, but believed advances in wind power technology would help bring the costs in line. However, a more recent LIPA analysis demonstrated that the costs would, in fact, swell to six times greater than conventional power. I’ll be keeping an eye on further developments in advance of LIPA’s September 22 board meeting.

Interestingly, the Pace study noted that the anticipated costs for the Wind Park project are “in line with market expectations for North American offshore projects given the early stage development of such a market and the overall lack of a well-defined national energy policy to support these kinds of projects.”