Advancing Clean Energy: Cost and Policy Options Analysis for Statewide Offshore Wind Procurements
Date
2022-05
Authors
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Publisher
University of Delaware
Abstract
This thesis describes the process in which a non-profit group provides expert guidance
to a state government for an offshore wind procurement, which I recently participated
in. It then details the initial reactions to that process from officials, local media, and
engaged members of the public. Such examples of expert guidance have been
published by the Special Initiative on Offshore Wind (SIOW) for the state of New
York, the Commonwealth of Massachusetts, and, as described here, the state of
Delaware. Discussion is mostly focused on wind procurement potential for Delaware,
following recent publication of the SIOW cost analysis report for this state. Chapters
2, 3 and 4 of this thesis paraphrase data and context from the Delaware SIOW report,
which was written by myself and three other authors. The remaining sections are my
analysis of the reactions to the report.
This thesis begins with context about the offshore wind industry in Delaware and in
nearby states. It also includes an explanation of an offshore wind procurement process.
Then, the literature review considers existing research on the national and state wind
power markets, external benefits of wind power, and pricing systems that a state may
choose for a wind power solicitation. The methodology section introduces the two
primary topics for further discussion: cost analysis and state options presented by the
SIOW report, and stakeholder feedback and reactions to the report itself. In-depth
results are then provided in these subject areas. The calculated price point estimate for
a Delaware offshore wind farm of 800 MW is $71.48/MWh, which is within the range
of recent Delmarva wholesale electricity purchases. If human health and
environmental factors are considered, the price of wind power is half that of
Delmarva’s recent purchase price. Options for Delaware to consider in a procurement
are then provided, ranging from cost-saving metrics to job-creating initiatives. Several
stakeholder meetings and media releases are also analyzed between publication of the
SIOW report and May 13th, 2022. Initial data from these sources suggested that the
offshore wind conversation has restarted in Delaware due to the SIOW report, but that
state leaders are still reluctant to take action.
Finally, the discussion expands to the impact of the 2016 Massachusetts SIOW report,
and how this illustrates the effectiveness of pre-procurement analysis. With growing
international demand for offshore wind power, this thesis concludes that pre-procurement cost analyses and guidance on the procurement process enables
successful offshore wind solicitations.
Description
Keywords
Wind procurement, Wind industry, Wind power