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 $2.5B.
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. Please see the posting of April 18 for reference to other postings regarding these issues.
Issue-High cost of electricity: Average retail price for electricity in MA during November 2010 was 13.87 cents/kWh for all sectors. Average of all sectors U.S. in November 2010 is 9.62 cents/kWh. The initial price of electricity for Cape Wind is 18.7 cents/kWh in 2013 and will then increase annually by 3.5 percent over 15 years. At the end of 15 years the Cape Wind electricity price will be 31.3 cents/kWh.
During the past ten years the cost of electricity in Massachusetts has varied from 9.57 cents/kWh in 2000, to a low of 4.06 cents/kWh in 2002 and to a high of 15.45 kWh in 2009. In case of Cape Wind, the cost of electricity will always increase with no downward movement due to economic changes. Thus, the consumer will always experience increasing prices.Tags: Cape Cod, Cape Wind, Capital Cost, Development Time, Electricity Generation, Massachusetts, NIMBY, Offshore Wind, Subsidies