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Massachusetts strives to achieve wind development goals
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Deval Patrick has high hopes for wind development in Massachusetts.
In January of this year Governor Deval Patrick set a goal in which the State of Massachusetts would have 2,000 MW of wind capacity installed by 2020. I commend the Governor for setting such high standards however a critical analysis on the development environment in Massachusetts may call in to question the achievability of these goals.
The Governor set high expectations for solar development calling for the installation of 250 MW by 2017. The State made great progress on the solar front in 2009. Massachusetts is already on track to hit its short term solar target of 27 MW installed by 2012. What can this success be attributed to? The answer is Commonwealth Solar. The program was launched in January 2008 and is currently run by the Massachusetts Technology Collaborative. The program offers rebates to solar developers of up to 50% of the capital cost of a project. So it is really no surprise that the State has already received more than 1,400 applications for the program. This puts the State well on its way to exceeding the 2012 goal of 27MW. It should also be no surprise that the number of solar installation companies has more than tripled since the program went into effect. Applications are no longer being accepted for the Commonwealth Solar program because the State is well ahead of its solar MW target. The next phase of Commonwealth Solar should be announced in early 2010.
Now let’s switch gears and talk about wind development in the State. Last month the American Wind Energy Association came out with its 3rd quarter report. According to the report, Massachusetts has a total of 5 MW of wind energy installed. The only state that has favorable wind resources, and less MWs installed than Massachusetts, is Rhode Island. This leads to a few questions - why is it for the lack of wind development in the State? Why does the Governor think 2,000 MW of installed wind is realistic? The answer to the first question is easy, it comes down to development terrain. In those States where wind development is prominent there are thousands upon thousands of acres of flat, uninhibited farm land, that Massachusetts does not have. Sure there are farms in Massachusetts, but are they really adequate to drop a large scale wind project of 50+ turbines? And sure there are smaller farms that would be suitable for wind development, but no developer wants to do a project of less than 10MW, it’s just not profitable, nor financeable. Second, the most attractive areas for development in the State are along the coast because of favorable wind resources. Good luck to any developer trying to meet setback requirements along the coast, or trying to appease the local opposition. Of course developers have the option of utilizing coastal waters, however we already know that Cape Wind has been in development for 8 years with not a turbine to be seen.
So what can Gov do to help with the development of wind? So far Gov has implemented the Commonwealth Wind Incentive Program where wind developers, of commercial size wind developments, would be eligible for a maximum grant of $55,000 per development. Honestly, that is a joke. Just to put that number in perspective it costs roughly $200,000 to ship (just transportation costs!) one (1), 2 MW turbine from over seas. In order for Massachusetts to come even remotely close to meeting the Gov’s expectations a number of policies need to fall in place. First, if a town rejects a developer’s project, the developer should have the right to appeal at the State level. Second, the State should start requesting proposals for wind developments on State owned property. Third, the State needs to come up with a more attractive grant program, unfortunately $50K just doesn’t cut it these days.
That said Massachusetts does have potential for wind development. The wind resources are solid, electricity prices are high, and REC prices are high. Each of these has a favorable impact on development economics. Stay tuned to see if the State meets its short term goal of 40 MW of wind by the end of 2010.
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