Laurie Guevara-Stone

Located just 13 miles off the coast of Rhode Island, and just 14 miles east of Long Island’s Montauk Point, Block Island (pop. ~1,000) has been called one of the last great places in the Western Hemisphere. The island boasts 17 miles of beaches, 365 freshwater ponds, 250-foot bluffs, and 150 different bird species. Now the island is about to become well known for another reason—it will soon be home to the first offshore wind farm in the United States.

THE HIGH PRICE OF ISLAND LIVING

So many people want to enjoy the beauty of Block Island, the population rises from 1,000 year-round residents to 15,000–20,000 people in the summer. However, the beauty and seclusion come at a price. Residents pay some of the highest electricity retail prices in the nation, up to $0.50 per kWh in the summer months. Block Island Power Company (BIPCo) provides electricity to the island’s residents with diesel—approximately one million gallons each year—which is shipped to the island by boat. And electrical retail prices fluctuate depending on the price of that diesel (for example, in the past year prices ranged from $0.37 to $0.58 per kWh, while folks on mainland Rhode Island pay an average $0.14).

In March 2015, Deepwater Wind secured financing for its planned 30-megawatt, 5-turbine wind farm to be built three miles off the Block Island coast. The wind farm will generate an estimated125,000 megawatt-hours per year, more than enough power for island residents, with the excess being exported to mainland Rhode Island.

The economics are one of the main reasons wind was chosen. “Block Island had a lot of choices to get off of the expensive imported diesel. They could have switched to propane gensets or compressed natural gas,” says Chris Burgess, operations manager for the Ten Island Challenge, a program of Rocky Mountain Institute and Carbon War Room. “But they decided to go with renewables for a couple of reasons. One, it met the island’s ethical code of wanting to protect the environment, and two, it’s cost effective.” To wit, Deepwater is predicted to reduce residents’ utility bills by 40 percent and lower carbon dioxide emissions by 40,000 tons annually.

CONNECTING TO THE MAINLAND GRID

Deepwater Wind will be selling its electricity through a power purchase agreement (PPA) to National Grid, an international company based in the U.K. and the U.S. Northeast with 3.4 million customers in Massachusetts, New York, and Rhode Island. BIPCo will continue to own and operate the electricity infrastructure on the island but will buy the wind power from National Grid for its customers. The wind power will flow directly from the wind farm to the island, and then—since Block Island uses only 1 MW of power during off-season and 4 MW of power during their summer peak season—the excess power (90 percent of the power produced) will be sent to National Grid’s mainland customers on Rhode Island.

A cable buried six feet under the ocean floor will link the wind farm and Block Island to the mainland. Thus Block Island has no need for storage, and no need for backup diesel generators, as it can purchase electricity from National Grid once the cable is laid. Block Island had considered installing its own cable to the mainland, but at a cost of almost $40 million, it would actually not have reduced electric retail prices, as ratepayers would be footing the bill for the cable. Now that Block Island gets to use the Deepwater cable, the island only has to pay a fraction of the cost. It’s a win-win situation as not only does the island rid itself of diesel dependence, but also the U.S. gets its first offshore wind farm.

OVERCOMING INITIAL CHALLENGES

Wind projects face many challenges, one of which is community objections based on issues—some perceived, some subjective, some legitimate—including noise, aesthetics, bird migration, or other issues. Up until now other proposed offshore wind farms in the U.S. Northeast have failed because of opposition from Martha’s Vineyard and Cape Cod residents disturbed by the impact on their ocean viewshed.

One of the most important things Deepwater Wind did to move the project forward was to involve the entire community of Block Island and National Grid’s Rhode Island customers from the beginning. For example, people were concerned construction would disrupt the migration of the North Atlantic right whales. So Deepwater Wind put together a partnership with different environmental groups, and voluntarily imposed additional restrictions on construction activities, beyond the federal guidelines. “Being engaged and active in both Block Island and mainland Rhode Island, gave us the ability to take a group of stakeholders with legitimate concerns, bring them into the process, answer their questions, and address their concerns,” says Clint Plummer, vice president of development at Deepwater Wind.

Another big hurdle was getting the right regulatory market environment. Rhode Island had to pass new legislation to allow Deepwater Wind to sell power to National Grid. Deepwater Wind had to get permits and approvals from the Rhode Island Department of Environmental Management, the Rhode Island Coastal Resources Management Council, as well as the U.S. Department of the Interior’s Bureau of Ocean Energy Management and the U.S. Army Corps of Engineers, among other agencies. “It was critical to have a partner in government,” says Plummer, “having a state that recognizes it needs to be on the forefront of creating innovative policy mechanisms.”

The third big challenge was pulling together a global supply chain. Currently there are no manufacturers of offshore wind turbine parts in the U.S. So the turbine foundations are being built in Rhode Island and Louisiana, the turbines in Europe, and the cable in Korea. However, according to Plummer, “as the industry grows and develops there will be opportunity to create a local supply chain, creating more local jobs and lowering costs.”

While financing for renewable energy projects on small islands is often difficult, Deepwater Wind has fully financed the wind farm to a tune of $290 million through underwriters Societe Generale of Paris, France, and KeyBank National Association of Cleveland, Ohio. Obtaining financing for renewable energy projects is highly dependent on the credit rating of the off-taker. In the Block Island case, the off-taker is mainland utility company National Grid. Financing was also easier because it’s a relatively small project as far as offshore wind projects go. “By being able to start with this small project, we could finance it with only two or three banks,” says Plummer. “There was a lot of interest from lenders because they recognized it was a good project, and we were able to pull together a financing plan that both we and our lenders are happy with.”

LEARNING FROM BLOCK ISLAND

Similar to Block Island, islands around the world face high electricity costs and a reliance on imported fuels. RMI and Carbon War Room are working with islands in the Caribbean to help transition them off of their heavy dependence on fossil fuels to renewable resources. “There are a lot of operational challenges in getting a wind project built on a small island,” says Kate Hawley, a senior associate at RMI. “One of the reasons islands are so fascinating is that the second you put in renewables you’re at high penetration. This impacts operational standards, protocols, and guidelines. On Block Island tying into the main grid reduces the risk for operational challenges.”

Yet Block Island, being the first in the nation, can be a great learning tool for the U.S. wind industry. “Just as the Danes tiptoed into offshore wind by doing a wind farm very close to shore, Block Island is the offshore tiptoe for the U.S.,” says Burgess. “Now the Danes have offshore wind all over the Baltic Sea, up to 40 miles offshore. Block Island can provide us lessons that open up a whole new world of wind power.” In fact, Deepwater Wind is planning a utility-scale project, Deepwater ONE, in the deeper waters of Rhode Island sound that has the potential to supply renewable offshore wind energy to multiple East Coast states, as well asGarden State, a second utility-scale project in federal waters off the New Jersey coast.

The U.S. Department of Energy estimates that shallow waters along the eastern seaboard could host 530,000 megawatts of wind power, more than 40 percent of current U.S. electricity generation. The U.S. East Coast is also at the end of the pipeline for natural gas, which competes for both winter heating and year-round electricity generation. This is seen in the rising retail electricity prices in New England and severe spikes in the operating costs for generators, which reached astronomical numbers during recent winters’ polar vortices. Offshore wind can alleviate that pinch, and it’s starting with the Block Island wind farm. “On Block Island we have shown that we can shut down an antiquated, expensive, dirty generator and replace it with clean renewables, with high levels of public support,” says Plummer. “As old fossil-fueled power plants get to the end of their life and need to be replaced in other areas of the eastern seaboard, offshore wind can provide cost-effective power.”

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This article first appeared on RMI’s blog and is republished here with permission. Images courtesy of Deepwater Wind.

As most Alaskans can attest, energy in The Last Frontier is expensive. The average residential electricity rate of more than 18 cents per kWh is a full 50 percent higher than the national average, ranking among the highest in the country. That’s in part because outside the 50 hydro plants throughout the state, most of Alaska’s rural communities rely on imported diesel for their electricity. But the folks of Kodiak Island (pop. 15,000) in southern Alaska—powered almost 100 percent with renewable energy—have a different story to tell.

Although Kodiak Island, the second-largest island in the United States, relied on hydropower for 80 percent of the electricity production, it was also burning 2.8 million gallons of diesel per year, at an annual cost of $7 million. In the face of climate change and high electricity costs, the board and managers at Kodiak Electric Association (KEA) set a goal of producing 95 percent of the community’s electrical needs with renewable energy by 2020. They actually arrived there well ahead of time, and are now 99.7 percent renewably powered by wind and hydro.

MAKING THE TRANSITION

The State of Alaska has a renewable energy fund created in 2008 by the Alaska Energy Authority to help finance renewable energy projects and reduce and stabilize the cost of energy. KEA received $16 million in grant money through the fund, and $39.6 million through clean renewable energy bonds (CREBs). The CREB funds gave KEA a near-zero-interest loan for the project.

The first step was to purchase three General Electric (GE) 1.5 MW wind turbines. The turbines were installed in 2009, which was challenging according to Kodiak Electric Association CEO Darron Scott. “There was not a lot of information back then on how to keep the grid frequency and voltage steady with an influx of variable wind power,” Scott told RMI. “It was uncharted territory.” But after a grid integration study, which assessed the technical and economic impacts on the grid, the first three wind turbines were installed.

UPGRADED HYDRO FOR GRID STABILITY

A second modeling study was performed with real data from the first phase, and a second phase of three more wind turbines was proposed. But before installing the second phase of wind turbines, KEA wanted to upgrade the existing hydropower system. KEA felt that to ensure grid stability, the amount of wind power being put onto the grid had reached its maximum. The 20-MW, two-turbine Terror Lake hydroelectric plant was built in 1984, and forward-thinking engineers left an empty bay for a third turbine in case Kodiak’s load grew. In 2011, Kodiak’s peak load grew to over 26 MW, and the increased load, along with a desire to rely on more renewables, led to the installation of a third 10-MW turbine.

Besides covering peak loads, this turbine provided the necessary capacity and enhanced grid stability to allow more variable renewable power, like the three new proposed wind turbines, to come online. The new turbine also provided system redundancy, as the 30-year-old turbines require maintenance, which can now be done during low load seasons without switching to diesel.

A ROLE FOR STORAGE

For smaller electricity grids with quickly fluctuating demand and variable renewable energy inputs, a way to store the energy can be a great asset. In 2012, the three additional 1.5-MW wind turbines were installed, along with 3 MW of battery storage. The battery storage systems provide 30–90 seconds of bridging power when the wind output decreases, in order to ramp up the hydro system. Now, the Kodiak port wants to install a new 2-MW crane, potentially causing destabilizing power fluctuations leading to undesirable cycle of the batteries and the potential for consumption of more diesel to provide spinning reserve. Instead, KEA plans to add an additional flywheel energy storage system in about two or three months that will help compensate for the peaking crane loads. The PowerStore flywheel units from ABB will provide voltage and frequency support, will help manage the variable wind power, and will mean fewer cycles through the batteries, extending the life of the battery systems.

ECONOMIC STABILITY

The financial rewards of the project have been great. According to Scott, the community is saving. Electricity rates have gone down, and are now 2.5 percent lower than in 2001. “The stable electricity rates have also brought in more construction, expanded the fishing industry, and brought in more jobs and tax revenue,” Scott told RMI. And, at least one seafood company is capitalizing on the renewable energy to promote its sustainable salmon, as its salmon production plant is powered by wind energy.

The State of Alaska has a goal of reaching 50 percent renewable energy by 2025. Kodiak Island is providing a great example of how to reach and even go beyond that goal. “There are many communities in Alaska with significant microgrid achievement,” George Roe, Research Professor with the Alaska Center for Energy and Power, told RMI, “and there is local, national, and global potential for building on Alaskan hard-won experience such as that in Kodiak.” In fact, the Alaska Energy Authority and the Kodiak Electric Association won the 2014 State Leadership in Clean Energy Award for their renewable energy programs. “Both the Alaska Energy Authority and the Kodiak Electric Association are putting into practice five principles that I believe are in our national interest,” said Alaskan Senator Lisa Murkowski in a congratulatory speech. “And those are to make energy abundant, affordable, clean, diverse, and secure.” Kodiak went beyond its reliance on hydropower, adding different renewable resources and storage, making its electrical system more reliable, secure, and a model for other communities looking to add variable renewable sources to their grid.

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This article first appeared on RMI Outlet and is republished with the author’s permission.