Deepwater Wind and National Grid Sign 20-Year Power-Purchase Agreement for Offshore Wind Energy

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December 10, 2009 | Print this page | Share This |

Governor Donald L. Carcieri today announced that Deepwater Wind and National Grid have signed a 20-year, power-purchase agreement, marking a significant milestone in Rhode Island’s path toward developing the nation’s first offshore wind farm and establishing a green-collar industry.  The agreement marks only the nation’s second such power-purchase agreement for renewable, offshore wind energy. 

Under the terms of the agreement, National Grid will purchase the energy generated from Deepwater Wind’s Block Island Wind Farm at a cost of 24.4 cents per kilowatt hour in the first full year of operation expected to occur in 2013, escalating at 3.5% per year. This would translate into an increase on the typical 500 kilowatt-hour residential customer monthly bill for National Grid customers of approximately $1.35 per month in that year. The agreement is subject to the review and approval of the Rhode Island Public Utilities Commission.

“This is a tremendous accomplishment and ensures that Rhode Island remains the leader in developing the nation’s first offshore wind farm,” said Governor Donald L. Carcieri.  “I commend National Grid and Deepwater Wind for recognizing the importance of this agreement both to the ratepayer and the Rhode Island economy.  Investing in renewable energy reduces our exposure to the volatility of energy prices on the world market, and this agreement establishes confidence in the financial feasibility of the project.”

“This agreement marks a historic moment for the state of Rhode Island,” said Deepwater Wind CEO William M. Moore. “Our agreement with National Grid is a critical next step in Deepwater’s plans to develop the nation’s first offshore wind farm off the coast of Block Island and to establish a regional green-industry hub at Quonset Point, bringing hundreds of new, good-paying jobs to Rhode Island. We now look forward to participating in the public hearing process before the Public Utilities Commission.”

“This agreement brings Rhode Island one step closer to becoming the first in the country with an offshore wind project,” said House Majority Leader Gordon D. Fox, who was the House sponsor of the long-term contracting legislation. “This is great news for both our economy and our environment.  Rhode Island now has the opportunity to become the center for manufacturing of wind turbines on the east coast, bringing high paying jobs to our state. With this new project, Block Island will also be able to reduce its reliance on diesel fuel for its electrical generation.”

“Rhode Island is well positioned to be a national leader in the development and manufacture of renewable energy,” said President of the Senate M. Teresa Paiva Weed (D – Dist. 13, Newport, Jamestown). “This agreement is an important step forward in the process of growing green economy jobs in the state, while decreasing our reliance on polluting fossil fuels for energy. It would not have been possible without the hard work of Senator Joshua Miller, the Senate sponsor of the long-term contracting bill, and Senator Susan Sosnowski, who were committed to making private, renewable energy development a reality in Rhode Island. Nor could this have been achieved without the vision and leadership of former Senate President Joseph Montalbano, who initiated the legislation last year.”

In 2005, the Governor, with the support of the General Assembly, established the Office of Energy Resources, which is responsible for engaging the stakeholder and scientific community, creating the parameters for viable wind farm proposals, and choosing the best offshore wind project developer for Rhode Island.  In 2008, Deepwater Wind was selected as the state’s preferred offshore-wind developer.  In 2009, the General Assembly passed historic long-term contracting legislation that set the conditions for today’s power-purchase agreement between National Grid and Deepwater Wind.

“My administration set an aggressive goal of deriving 20 percent of our power needs from renewable sources.  Working with the leadership of the General Assembly, National Grid, Deepwater Wind, our renewable energy partners and stakeholders, we have made steady progress toward that goal,” continued Governor Carcieri.

Deepwater Wind plans to develop the Block Island Wind Farm in state waters, about three miles off the southeastern coast of Block Island. This demonstration project will include up to eight turbines and will provide clean, stable power at mainland rates for Block Island residents, who now pay some of the nation’s highest electric prices. The wind farm will provide approximately one percent of Rhode Island’s energy needs.

Deepwater Wind later plans to build a large-scale wind farm, with about 106 turbines, located in federal waters about 15 miles from nearest landfall. The energy cost for the utility-scale Rhode Island Wind Farm will be lower than that of the Block Island Wind Farm because of the economies of scale, the shortening of the supply chain from a more developed industry, and the creation of a robust, sustainable local workforce. Deepwater must execute a separate power-purchase agreement for the power generated from the larger wind farm.

Last summer, Deepwater Wind reached an agreement to develop 117 acres at Quonset Point, in North Kingstown, as a hub of manufacturing operations for the offshore wind industry.

“The lessons learned from the Block Island Wind Farm will allow Rhode Island to fully realize its economic potential by growing the industry here, and playing a significant leadership role in the nation’s growing green economy,” said Moore, Deepwater’s CEO.

Together, both wind farms are expected to produce 1.32 million megawatts of power annually, and bring hundreds of new jobs to Rhode Island.

“This agreement represents a critical milestone in this important project,” said Rhode Island Economic Development Corporation Interim Executive Director J. Michael Saul. “We’re excited at the tremendous potential of this project to boost the state’s green economy by building an offshore wind-industry hub at Quonset Point and bringing new jobs to Rhode Island’s growing green sector.”

“The economic development implications of Deepwater Wind’s Block Island demonstration project and its planned utility-scale wind farm cannot be overstated.  Deepwater Wind has made a commitment to our economy by siting the company’s headquarters in Providence, with Quonset serving as the company’s manufacturing headquarters for Deepwater projects from Maine to Delaware, creating an estimated 800 jobs.  In addition, Rhode Island will be a magnet for other renewable energy companies as the Northeast and Mid-Atlantic states develop more offshore wind projects,” continued Governor Carcieri.