peel back effect

Study: Offshore wind costs in Delaware no longer higher than fossil fuels

By Glenn Rolfe
Posted 4/11/22

NEWARK – Delaware has set a target of achieving 40% renewable energy by 2035.

If the state’s renewable energy portfolio includes offshore wind, there are options, challenges and …

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Study: Offshore wind costs in Delaware no longer higher than fossil fuels

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NEWARK – Delaware has set a target of achieving 40% renewable energy by 2035.

If the state’s renewable energy portfolio includes offshore wind, there are options, challenges and guidelines to consider, as determined in a study and report by University of Delaware researchers.

The report/analysis, released to the public last week following review by academic peers, industry experts, and the Delaware Department of Natural Resources and Environmental Control, offered a series of findings, but no recommendations.

“We do studies for state government, like this one. We figure out ways to be a non-interested party trying to advance things on offshore wind,” Willett Kempton, a professor in UD’s School of Marine Science and Policy.

The Special Initiative on Offshore Wind study, requested last year by DNREC Sec. Shawn Garvin, was also encouraged by chairs/vice chairs of the General Assembly’s Senate Environment & Energy Committee and the House of Representatives’ Energy Committee.

Findings included:

•Projected offshore wind power prices fall within the range of wholesale power being purchased currently for Delaware.

•Health issues from polluting power plants are real, as are health savings from adding renewable energy.

According to Mr. Kempton, the report found that projected offshore prices for power generated by 800 megawatt turbines fall within the band range of current wholesale prices of electricity currently purchased in Delaware.

The study compiled the last six years of purchases by the main regulated power utility in Delaware, Delmarva Power & Light.

“So, what we are talking about is a project that would start producing electricity in 2027,” said Mr. Kempton. “We looked at 2020 and 2021 projects, and then we projected what we thought that we could justify, what would be the cost in 2027 – the last six years of Delaware wholesale power purchases compared to recent offshore wind and what we project offshore wind to be in 2027.”

“Basically, most of the wind prices that we come up with are inside the band of what we have been paying for the last six years. It’s not like what people would expect,” said Mr. Kempton, noting there is common “misconception” that wind projects/renewable energy are more expensive.

Again, Mr. Kempton said the study offered no recommendation.

“We’re just saying – compare,” said M. Kempton. “We do have some guidance on how to do the process. We don’t have guidance on, you should do this, or you shouldn’t do that.”

According to Mr. Kempton, a previous state working group determined the price for offshore wind power was too high.

“That was several years ago. That’s has now been superseded because the industry has developed a lot. It’s has gotten a lot bigger. Technology advancements, and there is more competition. So that answer is really quite different,” said Mr. Kempton.

Besides the cost of electricity generated by offshore wind, the report offered options and alternatives.

“If the state decides to go forward, then we lay out some things that thy can do if they want to push the cost lower, or things for creating employment,” Mr. Kempton said. “We’re not saying you should do this, or not do that. We’re saying if you want to do it, here is how to do it, and here are some things to consider as the different pieces of that … and what the benefits and costs of each of those would be.”

An option outlined in the SIOW report is if the state encourages more lease areas to be available “then there is going to be more competition and then you have got competing suppliers, so of course that is going to help lower the price,” said Mr. Kempton.

The report also suggested defining rules on how the transmission cable will come ashore.

“The state could define rules for that. The state of New Jersey has done so. State of Delaware has not yet,” said Mr. Kempton. “So, we give that as another option. Maybe there is some political pro and con on that. We didn’t have a judgment on that. We just say, ‘Here is how you do this.’ This is about what it would cost, how to do a procurement, what are the options for creating jobs or lowering costs or both. That’s what we covered.”

The study and analysis factored in the cost for pollution.

“What does that add to the cost? — For example — for CO2, carbon dioxide, it adds for each unit of electricity, each megawatt hour, for wind power it adds 44 cents to the megawatt hour. And for our current mix of power, in our area, it adds $40 to the cost of the same megawatt hour of electricity from our current courses.” Said Mr. Kempton. “We say, ‘Here’s what pollution costs. Here is a pollution in health and here’s a pollution in climate change.’ And there is a pollution cost to the wind. You’ve got to build the towers, big steel, steel for boats to run out to them. We calculated that for wind, and we calculated that for our existing power.”

Mr. Kempton further explained, it adds 44 cents to the cost of wind megawatt versus $40 to what we are buying now. Now, nobody is paying that $40 in their electric bill. We’re paying for it in things like our houses getting flooded, or suddenly there is a lot more sand washed away on the beach, more violent storms …”

“To society, it is actually a lot more expensive to use the power that we are using today. But we’re not saying you should use that … we’re just saying compare,” said Mr. Kempton.

The report identified offshore wind as a potential huge energy resource, providing it’s based on large scale.

“Offshore wind is a little bit different because you have to have a certain size of project to be cost effective. It is a huge resource,” said Mr. Kempton. “You can easily run the whole state of Delaware all its electricity with just the ocean that is nearby to Delaware. When we say an 800 megawatt project, what does that translate to? That’s about a third of the electricity that Delaware uses. We’re not saying you should do multiple projects. We’re not saying you should be 100% renewable, but if you are an environmentalist or if you have a goal of reducing the effect of climate change, it’s three projects like that would take Delaware’s electricity almost carbon free.”

Response from groups

Leaders of local environmental, clean energy, and climate advocacy groups responded to the report.

“The SIOW report shows that the price of offshore wind will be comparable to what we’re paying now, and that’s without even including the cost savings we’ll see from cleaner air and improved health,” said Peggy Schultz, Facilitator, People for Offshore Wind Energy Resources (POWER). “If you factor in all the health and climate costs associated with burning fossil fuels, there is an unambiguous cost advantage for working out an offshore wind project for Delaware.”

“The Biden administration is calling for a big expansion in offshore wind to meet its goal of carbon-free electricity by 2035,” said Shweta Arya, executive director, Delaware Interfaith Power and Light. “Delaware is the only state missing out on the opportunities of offshore wind from North Carolina to Maine! To tackle the climate crisis and get to a net-zero future, we must rapidly transition to clean sources of energy. Offshore wind will have to be an integral part of our energy mix, and we are ready for it!”

Jack Thompson, president of Fridays for Future Delaware, said “Fridays For Future Delaware, a student-led environmental group, has long been a proponent of offshore wind energy. We are excited by the prospect of Delaware jumping on board this captivating new technology in our fight against climate change.”

Delaware Electric Vehicle Association President Charlie Garlow stated, “As drivers of electric vehicles (EVs), we applaud the SIOW report on clean offshore wind. That report points the way to cleaner electric cars, trucks, buses, boats and airplanes, powered by renewable wind energy. It also helps us all understand how we can power our homes, offices and industries in a soon-to-come healthy energy future.”

“Offshore wind power can get us a long way toward achieving Delaware’s goal of 40 percent renewable energy by 2035,” said Beth Chajes, Delaware State Coordinator, Citizens’ Climate Lobby. “The longer Delaware delays getting involved in offshore wind development, the less likely we are to benefit from the good, family-supporting jobs that are being created by this rapidly growing industry.”

Dr. Alan Greenglass of the Mid-Atlantic Alliance for Climate and Health applauded the report and its findings.

“Though usually not visible to us, the smog and soot from burning fossil fuels has a human cost by causing or worsening asthma, chronic lung disease, and heart health. If Delaware replaces one-third of its electricity needs with wind power, an amount achievable by a project similar in size to those being started in Maryland, we will not only have a healthier population, but also save upwards of $60 million a year in health costs,” said Dr. Greenglass.

“The Sierra Club Delaware Chapter applauds the effort of the Special Initiative on Offshore Wind in preparing this highly detailed report for Delaware on the various options for how our state could benefit from offshore wind in a responsible way,” Dustyn Thompson, Advocacy and Outreach Organizer for the Sierra Club Delaware Chapter. “Offshore wind will be key to our future energy supply and security in Delaware if we want to meet our climate goals and do our part to deal with the climate emergency in which we currently find ourselves. We have to find a way to bring this resource to Delaware in a way that makes sense for our state, and the SIOW has detailed several options to help get us to that goal.”

The full report can be found here.

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