Energy Supply Issues
Does New England need additional energy resources to meet electricity demand in future years? How would Cape Wind contribute to this need?
ISO New England (the independent not-for-profit corporation that operates New England’s bulk electric power system) projects that the region will need about 4,000 additional megawatts (MW) of capacity by 2016 and another 4,000 MW by 2025. To put that into context, New England currently has about 31,000 megawatts (MW) of electric generating capacity, which is enough to meet customers’ needs reliably with some extra capacity to cover planned and unplanned plant outages and extreme demand spikes. According to ISO New England, new resources will be needed most urgently in Massachusetts and Connecticut. Click here1 to see a June 2007 presentation by ISO New England president and CEO Gordon van Welie on New England’s electricity supply outlook and requirements.
Cape Wind’s design gives the wind farm a maximum output of 454 MW. However, winds do not blow steadily at all times, so wind farm capacity factors (the ratio of actual power produced to the amount that could theoretically be produced running constantly at maximum output) typically range from 15 to 40 percent. Cape Wind’s developers project that on average the wind farm will deliver about 36 percent (163 MW) of its maximum output. The Massachusetts Energy Facility Siting Board accepted a capacity rating of 100MW for purposes of its 2004 review, and found that there would be a need in New England for the capacity provided by the wind farm beginning in 2007 to maintain a reliable supply of electricity. Click here2 to read the Board’s analysis (Section A-II, p. 139).
Would Cape Wind contribute to state and regional renewable energy requirements?
All six New England states have adopted renewable portfolio standard (RPS) requirements directing that specific fractions of their electricity must come from renewable sources by designated dates. According to ISO New England, RPS requirements will represent 6.5 percent of the region’s energy in 2015, which is equivalent to 3,750 MW of wind or 1,600 MW of biomass. Proposed renewable projects in New England as of June 2007 totaled 1,900 MW, not all of which qualified to meet various state RPS standards. Click here3 for a June 2007 presentation by ISO New England president and CEO Gordon van Welie on the region’s future electricity outlook.
The Massachusetts RPS requirement starts at 1.0 percent in 2003 and rises 0.5 percent annually through 2009, then by 1.0 percent annually at the discretion of the Massachusetts Division of Energy Resources (DOER) from 2010 through 2014, reaching 9.0 percent in 2014. If insufficient renewable electricity is available to meet the requirement, power suppliers can make Alternative Compliance Payments (ACPs) , which are used under the direction of DOER to promote development of new renewable generation capacity. According to the DOER, electricity suppliers met 35.7% of their obligation through ACPs in 2005, the most recent year for which data is available. DOER projects that suppliers will need to use ACPs to cover about 30% of their 2006 RPS obligation. Click here4 to read DOER’s 2007 RPS compliance report. The Cape Wind project would reduce the shortfall in actual compliance with the Massachusetts RPS.
What are the main fuels that New England will use to meet future electricity demand, whether or not Cape Wind is built?
A 2007 analysis by ISO New England of regional energy scenarios indicates that New England is likely to remain heavily dependent on natural gas to produce electricity over the next several decades, even if it substantially increases its renewable generation capacity. Electricity prices will be strongly influenced by natural gas and oil prices and by the relative costs of these two fuels (i.e., if oil prices rise relative to natural gas the region will use more gas). Because prices for both fuels have increased sharply in recent years, strong reliance on oil and gas has sharply increased energy costs for New England households and businesses.
Click here5 and read Section 3.3 of the Army Corps of Engineers’ assessment of future impacts and conditions if Cape Wind is not built, and here6 to read ISO New England’s scenario analysis.
Would the intermittent nature of wind energy significantly increase regional electricity prices or disrupt power grid operations?
A project the size of Cape Wind would not likely have this effect. Here’s why:
Wind turbines only generate electricity when the wind blows within certain speed ranges, so intermittency is a characteristic of wind energy. Other power sources are also intermittent to varying degrees, including solar energy and some hydropower facilities, and all power plants are subject to planned and unplanned shutdowns.
A number of studies have been conducted in recent years to determine whether wind plants need to be backed up with significant amounts of “dispatchable” generation (generators that can produce power on demand), which could make grid operation more complex and expensive. Analyses from California, Minnesota, New York, and Colorado indicate that the intermittency of wind imposes some additional operating costs on electric power systems, but that these costs are modest (roughly 0.2 to 0.5 cents per kilowatt-hour) in areas where wind represents less than 20 percent of total generation. Click here7 to read a 2006 review of these findings by the Utility Wind Integration Group, an industry consortium, and here8 for an article on the issue from the Electric Power Research Institute.
The Massachusetts Energy Facility Siting Board concluded in 2004 that ISO-New England might need to add some form of backup services to the grid if Cape Wind is connected, but that doing so would only cost a few million dollars per year, significantly less than the expected savings from displacement of more expensive electricity generators. Click here9 to read the Board’s comments on intermittency (Section A-III.C., p. 164).
Will energy generated by Cape Wind be consumed on the Cape?
Electrons cannot be tracked after they flow from a wind turbine or other electricity generator into the grid, so there is no way to trace the power that consumers receive back to its origin. Electricity is traded freely among the six New England states, and New England also does some trading with New York and Canada. However, electrons flow along the path of least resistance, so power from Cape Wind will flow to the closest load, which is likely to be on the Cape and Islands.
According to the Minerals Management Service review, Cape Wind’s generation capacity would average 182.6 megawatts, or about 1,600 gigawatt-hours (1.6 billion kilowatt-hours) of electricity per year. An average New England household uses roughly 7,150 kilowatt-hours of electricity per year, so Cape Wind’s projected output would be enough to meet the yearly demand from about 223,776 households.10 This output is equivalent to about 75 percent of average electricity demand on the Cape and Islands. Electricity from Cape Wind would reduce the flow of electricity from other sources into the Cape and Islands grid.
Click here11 to read a summary of remarks on this question at a 2002 MTC Cape Wind stakeholder meeting from David O’Connor, then Commissioner of the Massachusetts Division of Energy Resources, and Charlie Salamone, then Director of System Planning for NStar.
1http://www.iso-ne.com/pubs/pubcomm/pres_spchs/2007/neg_ecp_6_26_07.pdf
2http://www.mass.gov/Eoca/docs/dte/siting/efsb02-2/72cwind.pdf, Section A-II, p. 139
3http://www.iso-ne.com/pubs/pubcomm/pres_spchs/2007/neg_ecp_6_26_07.pdf
4http://www.mass.gov/doer/rps/rps-2005annual-rpt.pdf
5http://www.nae.usace.army.mil/projects/ma/ccwf/deis.htm, Section 3.3
6http://www.iso-ne.com/committees/comm_wkgrps/othr/sas/mtrls/elec_report/
scenario_analysis_final.pdf
7http://www.uwig.org/ewec06gridpaper.pdf
8http://mydocs.epri.com/docs/CorporateDocuments/EPRI_Journal/2006-Spring/1013289_wind.pdf
9http://www.mass.gov/Eoca/docs/dte/siting/efsb02-2/72cwind.pdf, Section A-III.C., p. 164
10New England household usage is from U.S. Energy Information Administration, New England Household Electricity Report, October 11, 2005, http://www.eia.doe.gov/emeu/reps/enduse/er01_new-eng.html
11http://www.masstech.org/offshore/Meeting2/Summary103102rev2.htm