Wind-energy projects across the state are flagging as lower prices for natural gas make it harder for wind power to compete -- a factor that could ultimately rule out an offshore wind farm in LIPA's portfolio.
Long Island Power Authority trustees on Thursday are expected to authorize the authority to negotiate contracts for one or more new generation projects, and sources say a proposed 900-megawatt offshore wind farm is unlikely to make the cut.
Instead, LIPA is expected to recommend pursuit of at least one, and maybe more highly efficient, natural-gas-based plants.
Environmentalists who have been pushing for the offshore wind farm say they've been told the cost of the wind farm is a driving factor in its exclusion.
"We're hearing that it's much, much, much too expensive, which leads us to wonder about their costing models," said Peter Gollon, chairman of the environmental group Sierra Club Long Island's energy committee.
Assuming LIPA is moving ahead with more gas-based plants, Gollon said he worries the 20-year contracts for the plants could present future complications. "We know that while natural gas is cheap now, it will not remain cheap forever."
LIPA trustees earlier this month approved a 15-year contract to continue using the local fleet of National Grid power plants, the largest of which have gas and fuel-oil capability and were built in the 1950s and 1960s. The contract gives LIPA the option to overhaul the plants, which would likely require that at least one new natural gas plant be in place to meet power needs if, for instance, the Port Jefferson Power Station were to be replaced.
Last week, the Huntington Town Board approved a resolution that authorizes the town to become interveners in a federal action filed by Port Jefferson Village that calls for a probe of National Grid's market practices. Huntington hosts the National Grid Northport Power Station. The North Shore Central School District, which hosts the Glenwood Landing power plant, which is being retired, filed a similar motion this month.
"In order to meet our future energy needs, LIPA is taking the right steps to providing reliable and environmentally friendly generation at a better valued cost for our customers," said LIPA spokesman Mark Gross.
Earlier, LIPA trustee Neal Lewis, a longtime wind farm proponent, said LIPA lawyers ordered trustees not to discuss the bidding process because of confidentiality clauses. He would only say, "The board is very much engaged. There's a lot of discussion of the analysis."
Among the gas-power plants proposed to LIPA are one near the existing Caithness facility in Yaphank, another proposed for the LIPA property at the former Shoreham nuclear power plant, and another in Kings Park.
If indeed the offshore wind farm is off LIPA's list, it will follow a trend statewide toward shelving of wind energy. In a speech this week, Stephen Whitley, president and chief executive of the New York Independent System Operator, the not-for-profit corporation that manages the state's energy grid, pointed to figures showing wind energy projects have leveled off after a decade of sharp growth.
“Because of the uncertainty of the wind production tax credit, new wind projects have trailed off not only in New York but around the nation," said Whitley. "In New York the low cost of natural gas has also been a factor. The drop in natural gas prices have dramatically influenced wholesale electric prices. Wholesale electric prices are half of what they were in 2008, shrinking revenues of wind
Wind-power capacity grew from 48 megawatts statewide in 2003 to 1,162 megawatts in 2008. Since then, however, capacity has increased by only around 350 megawatts. Whitley cited the sharp reduction in the cost of gas and expiring federal credits on wind energy as the likely causes, according to the Albany Times-Union.
Matthew Cordaro, an energy expert and chair of the Suffolk Legislature's LIPA Oversight Committee, said he expects LIPA may have no choice but to contract for additional gas-based power. "I don't see how they can approve the wind farm unless they make it contingent on getting a cable deal," he said, noting that the wind farm requires 98 miles of cable from the waters of Rhode Island to Shoreham.