June 25, 08
First U.S. Offshore Wind Farm to be Built Off Delaware Shore

Delmarva Power signed a landmark offshore wind power deal with Bluewater Wind on Monday, agreeing to buy enough power to light 50,000 homes in Delaware for the next 25 years.

The long-awaited, $800 million deal will make Delaware the first state in the nation to build a wind farm off its shores. An array of as many as 70 towering windmills would rise in a tract east of Rehoboth Beach by 2012.

The farm also could be expanded in coming years if other electricity buyers are found. Bluewater has said it also intends to build a regional construction hub in Delaware.

The surge in support for the wind power project developed as oil prices increased and evidence of the environmental damage from carbon dioxide and other power plant emissions mounted. Federal support has grown for alternatives to fossil fuels, including wind, solar and nuclear power.

Both parties agreed the contract will cost average residential customers about $5 a month more -- over the 25 years -- than they would have paid for electricity without offshore wind power. With volatile fossil fuel prices, no one can predict how much additional cost -- or savings -- customers may see over the life of the contract.

Right now, wind-generated power costs more than electricity produced using fossil fuels such as coal or natural gas. The extra cost would be passed along to everyone hooked up to Delmarva's Delaware grid, whether they buy their electricity from Delmarva or not.

The new contract would have Delmarva buy about 14 percent of its power from Bluewater. Delmarva would now buy no more than 200 megawatts when the wind is blowing hard, averaging about 605,000 megawatt hours a year. Between 55 and 70 turbines are envisioned. The project will cost about $800 million to build.

Additional turbines could be built to accommodate more buyers. It will be up to Bluewater to expand the project up to 600 megawatts. The cost of the wind electricity is estimated to be $9.893 cents per kilowatt hour.