The Maryland Public Service Commission, in a Dec. 13 order, said that it will hold a hearing for public comment on Maryland’s Eastern Shore on Jan. 18, 2020, regarding the impacts related to the change in turbine size selected by US Wind, Inc., and Skipjack Offshore Energy, LLC for their respective offshore wind energy projects.
As noted in the order, the commission in May 2017 issued an order in Case No. 9431, which authorized the issuance of offshore wind renewable energy credits (ORECs) to two applicants — US Wind’s 248-MW project, with an estimated commercial operation date of Jan. 1, 2020, as well as Skipjack’s 120-MW project, with an estimated commercial operation date of November 2022. That order included dozens of conditions whose purpose was to mitigate risk to ratepayers and maximize value to the state, including a requirement that US Wind and Skipjack utilize “best commercially-reasonable efforts to minimize the daytime and nighttime viewshed impacts” of their respective projects, “including through reliance on best commercially-available technology at the time of deployment,” the commission said.
As noted in the May 2017 order, US Wind proposes to build a 750-MW wind farm project off the coast of Maryland, for which the company seeks ORECs in support of the development of 248 MW of offshore wind capacity. The order added US Wind expected the 248-MW project to cost about $1.4bn, or $5,544/kW, and that to recoup those capital expenditures, US Wind offered a two-part, 20-year OREC bid with a first-year price of $201.57/MWh and a levelized price of $177.64/MWh (2012 dollars). Given that the projected upgrade costs for transmission interconnection are expected to be zero, the second component of US Wind’s two-part OREC bid is negated, thereby resulting in an adjusted levelized OREC price reflected in the application of $176.66/MWh (2012 dollars), the order said.
Skipjack proposes to build a 120-MW wind farm project about 17 to 21 nautical miles off the coast of Maryland in the Delaware Wind Energy Area (WEA) designated by the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) as OCS-A 0482, the order said. Skipjack expected the 120-MW project to cost about $720m, or $6,000/kW, and that to recoup those capital expenditures, the company offered in its application a one-part, 20-year OREC bid with a first-year price of $166.0/MWh and a levelized price of $134.36/MWh (2012 dollars), the order said.
In its Dec. 13 order, the commission said that US Wind, in its Nov. 30, 2016 application, listed the 4-MW Siemens SWT 130 turbine as the turbine technology that the company had “preliminarily chosen” for its offshore wind project. The commission noted that in its November 2016 application, Skipjack reported that the Siemens 8-MW offshore wind turbine had been selected for developing the project’s design basis for its offshore wind project.
In an Oct. 1 letter, US Wind indicated that the 4-MW Siemens turbine is no longer commercially available and that the company is evaluating alternatives with higher megawatt ratings, including the Siemens Gamesa SG 8.0-MW 167 DD, the Siemens Gamesa SG 10-MW 193 DD, and the 12-MW General Electric Haliade-X turbines. The commission added that aside from the increased capacity, those alternative turbines all share larger rotor diameter, blade length, swept area, hub height, and tip height.
Skipjack on June 4 notified the commission that it plans to use the GE Haliade-X 12-MW turbine for the project, the commission said.
Several parties filed comments in response to the commission’s Oct. 25 notice of opportunity to comment, with the Town of Ocean City, Md., for instance, contending that the change in turbines represents a material change from the applications that were approved by the commission, and that the commission should hold a hearing to consider the material changes.
The Office of People’s Counsel (OPC), for instance, commented that the size of the turbines proposed in the offshore wind applications was a basis for the analyses of a number of issues decided by the commission, including the cost impact on ratepayers, the economic impact on the state, and the cost-benefit analysis of the projects. Accordingly, the commission added, OPC recommended that the commission require US Wind and Skipjack to present evidence on the turbines they intend to use, as well as the impacts the change in turbine selection would have on the analyses presented to the commission.
US Wind on Nov. 15 filed a response contending that its selection of a larger turbine would enable the project to utilize fewer turbines, further from shore, as well as that its final turbine selection would be scrutinized for impacts on the natural and human environment by the BOEM, through its consideration of the company’s Construction and Operations Plan (COP).
The commission added that Skipjack observed that the GE Haliade-X 12-MW turbine would increase per-turbine output and efficiency, generate more power at low-wind speed, and demonstrate less sensitivity to wind speed variation. Skipjack argued that that its turbine selection is consistent with its testimony during the proceeding that it would use “the best-available turbine model,” rather than the model depicted in its application.
The commission added that it finds that the proposed changes in turbine models and size by US Wind and Skipjack constitute material changes to both companies’ qualified offshore wind projects, and therefore, it grants Ocean City’s request for a hearing to consider the impacts that may result from the change in turbine models announced by the companies since their original applications were filed in 2016.
Each project developer is required to file a COP with BOEM, which will require a full review under the National Environmental Policy Act (NEPA), including the development of an environmental impact statement as required under NEPA.
The commission also said that its May 2017 order recognized that technological advancements could drive down the costs of the projects by reducing engineering, procurement, and construction costs. The commission noted that it mitigated the risk that Maryland ratepayers would be unduly locked into a high-fixed price while offshore wind technology costs continued trending downward in the future by requiring an “open books approach to development and construction costs.”
Conditions on US Wind and Skipjack require that the project developers flow through 80% of any realized savings to Maryland ratepayers, and so the companies should be prepared to address preliminary estimates of project costs relating to the turbine changes in relation to the open books, flow-through conditions of the May 2017 order, the commission said.
Among other things, the commission said that to aid in its consideration of impacts, it will hold the hearing for public comment on Jan. 18, starting at 12 p.m., and that further proceedings on the limited matter may follow thereafter.
As noted in the May 2017 order, US Wind is a fully owned subsidiary of Renexia S.p.A., while Skipjack is a wholly owned direct subsidiary of Deepwater Wind New Jersey, LLC, which is a wholly owned direct subsidiary of Deepwater Wind Holdings, LLC.