
America's first big offshore wind farm sets record low price - Osiris30
https://reneweconomy.com.au/americas-first-big-offshore-wind-farm-sets-record-low-price-of-6-5c-kwh-45126/
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api_or_ipa
As others have pointed out, the title is highly misleading because the
facility has yet to be built. Moreover, projecting a cost-per-kwh over 20
years is a measure in futility. It's impossible to project energy prices 20
years in the future-- it's very possible another energy source will trump this
facility's cost per kWh. In addition, cost per kWh amortizes the cost of
construction where money is spent today for benefits to accrue in the future.
How you determine this discount rate has a massive impact on the supposed
value of the facility.

As PG himself has pointed out, behind every significant news article is a
submarine pushing public opinion[0]

[http://www.paulgraham.com/submarine.html](http://www.paulgraham.com/submarine.html)

~~~
Dylan16807
> Moreover, projecting a cost-per-kwh over 20 years is a measure in futility.
> It's impossible to project energy prices 20 years in the future-- it's very
> possible another energy source will trump this facility's cost per kWh.

You don't have to predict any prices to predict the costs of a specific
facility.

> In addition, cost per kWh amortizes the cost of construction where money is
> spent today for benefits to accrue in the future. How you determine this
> discount rate has a massive impact on the supposed value of the facility.

Sure, but it's easy to take the construction cost and run your preferred
discounting math on it.

> behind every significant news article is a submarine

This ain't a submarine, it's clearly promoting the specific installation...

~~~
oblio
> This ain't a submarine, it's clearly promoting the specific installation...

Yeah, if the whole thing could move we'd call it a sailing ship.

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rmason
I thought the project was dead due to lobbying by the Kennedy and Koch
families (talk about strange bedfellows) in 2017. Has it been resurrected
under a different name?

[https://www.bloomberg.com/news/articles/2017-12-01/cape-
wind...](https://www.bloomberg.com/news/articles/2017-12-01/cape-wind-
developer-terminates-project-opposed-by-kennedys-koch)

~~~
nicwolff
Cape Wind was proposed for Nantucket Sound, north of the islands and just 5
miles south of Cape Cod. Vineyard Wind will be 15 miles south of the islands.

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giarc
>This was confirmed by the CEO of the project, Lars Thaaning Pedersen, who
said in a statement that federal tax credits and a long-term power-purchase
agreement had helped the wind farm “offer an attractive price” to consumers.

Would it not make more sense to include the federal tax credits since they
would be at the cost of the tax payer?

~~~
c3534l
Would it not make sense to include the public cost from pollution and adverse
health in the price of coal?

~~~
imglorp
Those are indirect costs, but on the cash side, don't forget the $5
trillion/yr in global fossil subsidies. US pays around $10-50 billion of that.

[https://www.theguardian.com/environment/climate-
consensus-97...](https://www.theguardian.com/environment/climate-
consensus-97-per-cent/2017/aug/07/fossil-fuel-subsidies-are-a-staggering-5-tn-
per-year)

[http://priceofoil.org/fossil-fuel-subsidies/](http://priceofoil.org/fossil-
fuel-subsidies/)

~~~
c3534l
You should read the articles you posted. They're redefining subsidy to mean:

> not only supply costs but also (most importantly) environmental costs like
> global warming and deaths from air pollution and taxes applied to consumer
> goods in general.

In other words, that $5 trillion is the indirect cost, not in addition to the
indirect cost.

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hcurtiss
The article does not mention whether this price includes the cost of the
peaking facility necessary to cover wind intermittence. The PPA price usually
would not. Unless you have excess peaking capacity, bringing a big new wind
farm online usually means you need a new big gas peaking facility.

~~~
lukeify
If only coal and gas-fired power plants factored in health & climate
externalities into their levelized cost per kWh too...

~~~
Animats
For oil, we should add in all the US spends on Middle East wars.

~~~
fein
Where's all the oil we acquired from destabilizing the ME?

It would make sense if the US currently controlled all the oil fields in Iraq
and Kuwait, but we don't.

~~~
Brakenshire
Oil is fungible, it doesn’t matter whether it is burnt in America or sold by
American companies, it matters if the market price is cheap.

~~~
hueving
That's irrelevant. Unless you can show that the in place regimes would not
have extracted the oil (something not even Norway can resist), the wars had no
impact on its presence in the market (other than perhaps a delay during
instability).

~~~
Brakenshire
Well, the US was trying to embargo oil sales from Saddam-era Iraq, was it not?

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mattygh
I am loving this new love affair with cleantech and climate change from HN. So
much good stuff in the front page last few weeks.

~~~
pjc50
Yes, although I wish there was a blog/aggregator as good as theoildrum was.
The quality of discussion there was terrific.

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agumonkey
Finally something else than coal. If the current admin could jump on the
opportunity to diversify into renewables.

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JKCalhoun
I'm curious why wind power is in vogue now and wasn't, say, two decades ago.

Solar-electric I assume required some sort of scale or manufacturing advances
to be competitive. But modern wind turbines seem to have been do-able decades
ago.

Was coal just so damn cheap until recently?

~~~
jseutter
Wind power is becoming cheaper relative to other sources of electricity, so it
is becoming more popular. But why? Primarily, we figured out how to build
bigger wind turbines. Bigger turbines give you:

\- Wind higher up that is stronger and more constant

\- Bigger turbines with longer blades that harvest more energy

\- Fewer bigger turbines are cheaper to install and maintain than more
numerous smaller turbines

Frankly, these things are well into the size of sky scrapers and isn't the
sort of thing you just create overnight. Each generation incorporates
learnings from the previous generation and gets iteratively bigger.

This Vox article does a better job of explaining things than I ever could:

[https://www.vox.com/energy-and-
environment/2018/3/8/17084158...](https://www.vox.com/energy-and-
environment/2018/3/8/17084158/wind-turbine-power-energy-blades)

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blunte
Completely misleading title: "sets record low price" indicates that it has
done something, but the article says it has not been built. This, it has not
set any price. Someone has projected a price.

~~~
ggm
Someone has struck a contract for future, on a price.

The price is the highest the energy will cost, for the lifetime of the
contract absent force majure.

Why would the owner sign? The contract gives certainty. The contract means the
owner can now get funding, they have a guaranteed income stream across the
life of the contract.

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amerine
Pretty great for those folks seeing their monthly costs go down and a
successful project! Congrats

~~~
ashooner
>Bloomberg reports that the 800MW Vineyard Wind project – a yet-to-be-built
joint effort of Avangrid and Copenhagen Infrastructure Partners – is expected
to provide electricity and renewable energy credits for 6.5 cents a kilowatt-
hour (8.5c/kWh AUD) over the life of its 20-year contract.

Seems maybe a little premature to call it successful.

~~~
8bitsrule
OTOH, great to see the US getting off the dime after much of Europe has
tackled this - with sterling results. That our regrettable resistance is
ending is in itself a great success.

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brij0102
I wonder if some of these savings should be set aside to directly go towards
cleanup operations - processes to scrub CO2, reduce ocean acidification etc

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gammateam
Miners flocking

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IanDrake
I wonder how many piping plovers these will kill.

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tomcam
It hasn’t been built, the “low” price is supported by federal tax credits
which means all the taxpayers of United States, and its results are only
“expected”. This is hardly a news article, it is more of a propaganda piece.

~~~
GCA10
Can we size these tax credits, please? Lots of argument in both directions
without any sense of scale. If the tax credits artificially cheapen the price
by 10% (i.e. 7.2 cents/kwh becomes 6.5 cents/kwh), they're not a major
distortion.

If they cheapen the price by 50% (13 cents/kwh becomes 6.5 cents/kwh), then
that's a big thumb on the scale.

Until there's more clarity on this, it's hard for me to take a side.

~~~
mikeyouse
The wind energy production tax credit was $0.023 per kwh in 2016 -- It's
indexed to inflation and then stepped down by 20% per year from there. So for
projects initiating in 2018, the PTC should be $0.023 x 1.03^2 x 60% . (3%
inflation for 2 years, 40% discount). So this project should expect to see
~$0.0146/kwh or 1.46 cents/kwh in subsidy.

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JTbane
I'm not a fan of wind- big, ugly, noisy, and deadly to birds.

Why is nuclear not considered an option to fight climate change?

~~~
Brakenshire
> I'm not a fan of wind- big, ugly, noisy, and deadly to birds.

Wind does not kill birds in significant numbers, that is misinformation.

Offshore wind is many miles out to sea, so it hardly matters if they’re big,
ugly or noisy. It also reduces the effect on birds from negligible to
nonexistent. In practice they are a few dots on the horizon, if we really are
not willing to put up with such a minor inconvenience we might as well give up
now.

~~~
JKCalhoun
Not an ornithologist, but the sea birds I've observed seem to ride close to
the water, within ground-effect it seems. As you say then these elevated wind
turbines are unlikely to have a significant impact on birds.

