When I close my eyes and conjure an image of a wind turbine, typically it’s towering over a corn field somewhere in the expanses of the American Midwest. Instead I should probably be picturing my own backyard, as New England has seen some of the fastest rates of renewable energy development in the nation. Cape Wind is the largest and best known project in the region, but unfortunately it’s also one that has been bogged down in fierce controversy. Whether Cape Wind succeeds or not, other wind projects in the region march on unimpeded, with several due to begin operation by the end of the year.
The first of these projects to come online will be the Hoosac wind farm in Florida, MA. This installation will be completed by the end of 2012, generating 28.5 megawatts of clean and delicious renewable energy (enough to power about 10,000 homes). I actually got to see Hoosac in action a few weeks ago when Sarah and I were out at Mass MOCA for her birthday. I didn’t know anything about the project at the time, so discovering a bunch of mountaintop turbines merrily spinning away put a big smile on my face. Hoosac owes much of its success to governor Deval Patrick, who has engineered a dramatic increase in renewable energy for Massachusetts in recent years. When Patrick came into office there were only 3 megawatts of wind power in the commonwealth, but by the start of 2013 there will be 100 megawatts. Quite an impressive achievement!
In addition to Hoosac, there are two other projects nearing completion in New England – one in Groton, NH and the other in Eastbrook, Maine. These wind farms have signed contracts to sell their energy to NStar, which in turn will service this energy to local residents at costs below that of ‘conventional’ electricity (i.e. from burning fossil fuels). These contracts are really the secret sauce for renewables – long terms and guaranteed revenues help diffuse development costs and lower risk for both parties. Massachusetts’ Energy and Environmental Affairs secretary Richard K. Sullivan Jr. explains:
The long-term contract is really what gives the financial security to the developers to put these projects in place. It does show that you can do renewables and be price conscious at the same time.
All of these wind projects are a boon to New England, employing hundreds of people, lowering energy costs for residents, increasing economic activity in rural areas, and providing millions of dollars in taxes to local towns. While those are all great benefits, they aren’t what make these wind farms successful. They are successful because of their core economics, and institutional investors are beginning to take notice. When trying to seduce a smart investor, there are few phrases sexier than “core infrastructure”, “high gross margins” and “fixed revenues for 20 to 25 years”. Plus, you don’t have to be a genius to find the value of investing in power generation that has zero fuel costs!
The success of Hoosac and these other projects makes the manufactured controversy over Cape Wind all the more unfortunate (Oh no, you ruined my view! Oh no, the turbine gave me a headache!). It just goes to show that when you filter out the noise and disinformation, clean energy projects make sense for the community, the environment, and the savvy investor alike.