Deepwater Wind and National Grid have signed a 20-year power purchase agreement (PPA), according to Gov. Donald L. Carcieri, R-R.I. The agreement marks only the nation's second such PPA for renewable, offshore wind energy.
Under the terms of the agreement, National Grid will purchase the energy generated from Deepwater Wind's Block Island Wind Farm at a cost of $0.244/kWh in the first full year of operation – expected to occur in 2013 – escalating at 3.5% per year. The agreement is subject to the review and approval of the Rhode Island Public Utilities Commission.
‘Our agreement with National Grid is a critical next step in Deepwater's plans to develop the nation's first offshore wind farm off the coast of Block Island and to establish a regional green-industry hub at Quonset Point – bringing hundreds of new, good-paying jobs to Rhode Island,’ says William M. Moore, CEO of Deepwater Wind.
Deepwater Wind plans to develop the Block Island Wind Farm in state waters, about three miles off the southeastern coast of Block Island. This demonstration project will include up to eight turbines and will provide power at mainland rates for Block Island residents. The wind farm is expected to provide approximately 1% of Rhode Island's energy needs.
Deepwater Wind later plans to build a large-scale wind farm, with about 106 turbines, located in federal waters about 15 miles from nearest landfall. The energy cost for the utility-scale Rhode Island Wind Farm will be lower than that of the Block Island Wind Farm because of the economies of scale, the shortening of the supply chain from a more developed industry and the creation of a sustainable local workforce, according to the company.