The first large-scale offshore wind farm in the U.S., Vineyard Wind project, proves that renewable energy is cheaper than ever. It offers a total levelized price of $65 per megawatt-hour. The price is astonishing, it is 18 percent cheaper than other alternatives and much cheaper than other offshore wind’s costs. For instance, the cheapest US contract to day was Maryland’s recent $131.9 for megawatt.
Avangrid Inc. and Copenhagen Infrastructure are developers of the 800-megawatt project. The farm is planned to be built 15 miles south of Martha’s Vineyard. The contract between the developer and distribution companies (National Grid Plc, Eversource Energy, and Unitil Corp) was filed Tuesday with the Massachusetts Department of Public Utilities. The construction is expected to begin in 2019 and to finish by 2021, according to the developers’ statement in May.
The project is expected to save about $1.4 million to Massachusetts electricity users over the 20-year duration of the contract. Additionally, it will reduce the state’s carbon emissions by more than 1.6 million tons per year. It is equal to removing 325,000 cars from the road.
The final price was calculated including federal tax credits and a long-term power purchase agreement to offer an attractive price to the benefit of consumers.
The price is still higher than the average wholesale price of conventional electricity in New England of $34 per megawatt, but the benefits are worth the difference.
The price of offshore wind is falling, thus, this renewable source of energy is expected to grow by 16 percent annually through 2030. The United Kingdom, Germany, Netherlands, and China are driving the market. The U.S. is a latecomer to the market, therefore, due to the cost of import of massive components, the projects may cost more than similar in Europe.
Massachusets in 2016 set an ambitious goal of installing 1,600 megawatts of offshore wind farms in order to reduce greenhouse gas emissions to combat climate change. It will be enough to power 1 million homes. However, the state was not satisfied and lawmakers approved legislation to double that figure.