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1st Part of Massive Offshore Wind Power Line Moves Ahead

15 Jan

http://www.globalfundexchange.com/blog/2013/01/15/1st-part-of-massive-offshore-wind-power-line-moves-ahead/

An audacious plan to lay a multibillion-dollar wind power transmission spine under the seabed from southern Virginia to the New York City area will take a step forward on Tuesday with an announcement of plans for the first leg, a 189-mile segment running from Jersey City to a spot south of Atlantic City.

The proposed backbone, first outlined publicly in October 2010, is intended to link future wind farms far offshore, sparing them the expense and regulatory problems of bringing power lines all the way to shore individually and to move power to land-based sources. The project’s backers, which include Google and other prominent investors, argue that the buried offshore spine, impervious to storms, could also come in handy in an emergency, providing a backup for hospitals and police stations and restarting power plants in blacked-out areas.

The latter selling point has gained importance for the line’s promoters as interest in offshore wind has suffered setbacks, including the declining price of natural gas, a competing energy source.

The Atlantic Wind Connection, the project’s sponsor, says the first segment would run from a substation called Cardiff, near Pomona, N.J., operated by Atlantic City Electric, out into the ocean 12 to 14 miles. That leg represents less than half of the 350-mile project, but the plan was always to build it in stages. Near the line’s southern end, it would tie into multiple wind farms in a region that the Obama administration has identified as prime territory for offshore wind.

Executives at Atlantic Wind say they chose to begin with a segment solely in New Jersey because the project could level the big price differences for electricity within the state, yielding an economic benefit that could justify at least some of the first leg’s $1.3 billion construction cost. Remaining within one state simplifies the regulatory process, they added, and political support for offshore wind farms is relatively strong in New Jersey.

The state has mandated that 22.5 percent of its electricity must come from renewable sources by 2021, and the bulk of that is expected to come from wind, some of which may come from outside New Jersey. Very few onshore sites in the state are suitable for wind, however. New Jersey’s Offshore Wind Economic Development Act calls for at least 1,100 megawatts of offshore wind, but backers say it could go as high as 3,000 megawatts. Atlantic Wind hopes to secure regulatory approval and get the financing in place by mid-2015 and to start construction at the end of that year. Laying cable under the seabed will be an inducement for wind developers to move ahead as well, it predicts. In 2011, 11 companies expressed interest in building wind farms, although progress all over the East Coast has been quite slow.

Even if those farms do not materialize as fast as was once imagined, the sponsors argue that the transmission line is justified because it would allow faster recovery from crippling storms like Hurricane Sandy.

“This is great for offshore wind, but it’s supergood for the grid itself,” said Robert L. Mitchell, the chief executive of the Trans-Elect Development Company, a transmission-line business based in Bethesda, Md., that proposed the venture.

A report that the company commissioned from the Chertoff Group, led by Michael Chertoff, a former secretary of homeland security, asserts that in a blackout, the line would transport electricity from a faraway location to critical facilities like hospitals and police stations, or start up power plants in blacked-out areas.

Not everyone agrees on the reliability benefit, though. Jersey Central Power and Light, which serves much of the Atlantic coast, lost 55 of its 75 transmission lines in Hurricane Sandy. But even if there had been an alternative, it would not have made much of a difference, because most of the distribution lines feeding buildings were also down.

“It’s certainly an interesting concept,” said Todd Schneider, a spokesman for the utility. But he said the project would “not necessarily speed restoration work during a significant storm.”

The project passed a major hurdle last May when the Interior Department, which controls the ocean floor, said that preparation of an environmental-impact statement could begin.

The president of the State Senate, Stephen M. Sweeney, welcomed Atlantic Wind Connection’s proposal. “The potential jobs and economic benefit this could bring to New Jersey is definitely exciting, especially in a state with the fourth-highest unemployment rate in the nation,” he said. He added that he wanted to evaluate the costs before making a decision on whether to support construction.

For the project to be built, New Jersey would have to submit a request to the regional grid operator, PJM Interconnection.

The first step for PJM would be to determine how much money the line would save by importing cheap power from southern New Jersey into northern New Jersey. Another factor is how much prices in southern New Jersey would rise as a result of its exports. Such transfers are now limited by congestion on the grid.

Once the economic value of the line had been established, a sum related to that value would be charged to all PJM customers, including those in New Jersey. If the estimated construction cost of an estimated $1.3 billion exceeded that, which seems likely, the balance would be charged to New Jersey ratepayers as an environmental project, to meet the state’s renewable energy goals.

Original Article from The New York Times

by Lauralouise Duffy

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