Wind Energy, Offshore Case—Development Time, Capital Cost18 Apr

Cape Wind Project: Started in 2001, the Cape Wind project is an offshore wind farm that will consists of 131 turbines situated within a 24 square mile area on the south coast of Cape Cod. The peak nameplate generating capacity is 454 megawatts (MW) and will deliver 170 MW on average due to the intermittent nature of wind. The developer, Cape Wind Associates, claims that 170 MW is nearly 75 percent of the 230 MW used by Cape Cod and the islands of Martha’s Vineyard and Nantucket. Project cost is expected to be $2.5 billion.

The Cape Wind project has several issues. These include long development time, high capital cost, high cost of electricity, need for subsidies, and small percentage contribution to overall electricity generation in Massachusetts. These are discussed in the postings of April 20, 26, and 28.

Issue 1. Long development time

The Cape Wind project began in 2001 and has experienced a torturous path of red tape involving approvals, permits, licenses, certifications, lawsuits, and numerous local hearings related to not-in-my-backyard (i.e., NIMBY) issues. As of this writing (February 2011), the developer still has to acquire financing for the project and find customers (National Grid agreed to take 50 percent of the electricity generated by Cape Wind. The remainder has yet to be sold.)

Issue 2. High capital cost

The capital cost of offshore wind turbines is nearly $6,000 per kilowatt (kW), while onshore capital coast is $2,400. In comparison, the capital cost of standard fossil fuel systems ranges from approximately $700 to $1,000 per kW for advanced combustion turbines and conventional natural gas combined cycle systems, respectively.

The levelized cost of electricity generating technologies ranges from approximately $100/MWh for most technologies (i.e., coal, gas, advanced nuclear, onshore wind, biomass, hydro,) to nearly $250/MWh for offshore wind. Levelized cost is the present value of the total cost of building and operating a generating plant over its economic life.

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About Dr. Everson

Prior to forming this SBIR consultant practice, Dr. Jeffrey Everson was director of business development for QinetiQ North America’s Technology Solutions Group (previously Foster-Miller, Inc.).

Dr. Everson has won and been the principal investigator for several SBIR programs, including a Phase I program for NASA, a Phase I project for the U.S. Air Force, and Phase I and II contracts from the U.S. Department of Transportation. For the Phase II program, he received a Tibbetts Award for exemplifying the best in SBIR achievement.

Previously Dr. Everson held senior scientist positions at Battelle Memorial Institute, The Analytic Sciences Corporation (TASC), Honeywell Electro Optics Systems Division, and Itek Optical Systems Division.

He holds a PhD in physics from Boston College and a MS/BS in physics from Northeastern University.


For more information about how JHEverson Consulting can help your company with its SBIR and STTR proposals, please contact Jeff Everson.

JHEverson Consulting is based in the Boston area but consults for clients throughout North America. It also is supported by affiliated consultants.