Vineyard Wind, the first commercial-scale offshore wind project in the US will deliver 800MW to Massachusetts at just $0.065/kWhr.
Vineyard Wind will undergo construction in 2019, 15 miles south of Martha’s Vineyard and marks a turning point for US wind. The prices are around a third of what the proposed Cape Wind project would have cost, proving that wind energy isn’t a utopian dream but a fiscal reality for the United States.
We’ve already seen prices shatter expectations before (£57/MWhr in the UK) but the UK and other European countries have a head start with 20 year’s experience of established infrastructure, supply chains and finance mechanisms like the UK CFDs. Achieving $65/MWhr from a standing start underscores the significance of Vineyard Wind. It’s a landmark project that can drive the US wind industry forward.
Vineyard Wind’s low prices resulted from a combination of a long-term PPA and the Federal Investment Tax Credit (ITC) which is due to end for projects that begin construction after 2019. There’s a clear first-mover advantage here and this project paves the way for those states and companies who move quickly. These incentives create the competitive markets that drive prices even lower, just like those that led to subsidy-free offshore wind in Europe.
Source: Offshore Wind Journal.