mid-atlantic wind - overing the challenges

Mid-Atlantic Wind - Overcoming the Challenges

Prepared by:

Daniel F. Ancona IIIVice President for Renewable Energy

Kathryn E. GeorgeSenior Financial Analyst

Richard P. BowersIntern

and

Dr. Lynn SparlingAtmospheric Scientist, Department of Physics, University of Maryland Baltimore County

Bruce C. BuckheitRegulatory Consultant

Daniel LoBuePower Market Consultant

May 31, 2012

Princeton Energy Resources International, LLC1700 Rockville Pike, Suite 550Rockville, MD 20852

Contract Information:

Contract No.: DE-EE0000513US Department of Energy, Wind and Hydropower Technologies Program

Sponsored by:

US Department of Energy andMaryland Department of Natural Resources

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Model

1.0 Execu1.1 Prim1.2 Pol

1.2.1.2.1.2.1.2.1.2.

1.3 Pol1.3.1.3.

1.4 Win1.5 Bus1.6 Pub

2.0 Introd3.0 Goals 4.0 Regio

4.1 Mid4.1.4.1.4.1.4.1.

4.2 Ene4.3 Eur4.4 Iner

5.0 Power5.1 Reg

5.1.5.1.5.1.5.1.

6.0 Projecthey Mean

6.1 Met6.1.6.1.6.1.6.1.6.1.

6.2 EcoEnergy

utive Summarmary Barriersicy and Regu.1 RPS and .2 RPGs are.3 RPS-RPG.4 Restrictiv.5 State Supicy Changes o.1 Emphasis.2 State Enend Resource Usiness and Ecblic Interest Isduction ..........

and Objectivonal Energy Sd-Atlantic Wi.1 Ridgeline.2 Coastal P.3 Bay and S.4 Offshore ergy Situationropean Offshortia toward Or Transmissiogional Whole.1 Power Pr.2 Energy P.3 Capacity .4 Pricing Sct Economic Rn ..................thodology, C.1 Forward P.2 Four Win.3 A Mercha.4 50% Deb.5 Financialonomic Analyy Plants .........

ry ..................s and Mitigatiulatory Issues

RPGs are Inee Treated as CGs Face Indireve State Statupported Studieor Mitigations on Offshoreergy ProgramsUncertainty ..onomic Issuessues ..................................

ves ................ituation - Ripind Energy Me Sites ...........Plain Sites .....Sound Sites ..Ocean Sites .

n in the Mid-Aore Project Cocean Applica

on and Pricingsale Power Pr

ricing Model –ricing ...........Pricing ........ummary .......Results and C.....................ost and PerfoPricing vs. Ca

nd Market Segant Power Fin

bt Fraction .....l Figures of Mysis Results, u.....................

.....................ion Measures.....................

effective ........Caps ..............ect Constrainttes and Locales ..................

n Options .......e Wind Powers emphasize s.....................

es ..................................................................................

pe for Wind MMarket Segmen

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.....................Atlantic Stateost Trends ....ations in U.S.g ....................ricing ............– Methodolog...............................................................

Conclusions -.....................

ormance Estimalculated COEgments and Fnancial Case w.....................

Merit to Evaluunder Current.....................

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Market Develonts ........................................................................................................s ..............................................................

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......................mates, and FinE ..................our Plants .....with BB-Rate......................

uate a Project .t, Likely Fina......................

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ancing, for Mi.....................

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Cash Flow An.....................

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Wind ......................

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ii

6.2.6.2.6.2.6.2.6.2.

6.3 Eco6.3.

6.4 Fin6.4.6.4.6.4.6.4.6.4.

7.0 ProjecExpenses,

7.1 Pow7.1.7.1.7.1.7.1.

7.2 PJM7.3 Cap7.4 Sou7.5 Per7.6 Ope7.7 Fin

7.7.7.7.7.7.7.7.

8.0 Regul8.1 Vir

8.1.8.1.8.1.8.1.

8.2 Nor8.2.8.2.8.2.8.2.

.1 DPL-ODE

.2 Cloverda

.3 Calvert C

.4 Fentress,

.5 Summaryonomic Analy.1 Summarydings and Co.1 Land-Bas.2 Ridgeline.3 Shallow W.4 Ocean Pla.5 Final Comct Economic I, and Financia

wer Plant Proje.1 PJM Forw.2 Calculate.3 Three Set.4 Three Me

M Forward Prpital Costs forurces of Fundformance (Plaerating Expenancial Assum.1 Project Fi.2 Debt Feat.3 Equity Fe.4 Property latory and Polginia .............1 Renewab.2 Appalach.3 Zoning O.4 Virginia Mrth Carolina...1 North Ca.2 North Ca.3 Zoning O.4 The North

EC Coastal Ple Ridgeline .

Cliffs ShallowOcean ..........

y of Findings ysis Results, uy of Findings mments ........sed Plants .....e Plants ShowWater Bay Plants ..............mments .........Inputs and Asal Assumptioect Discountedward Pricing .ed COE .........ts of Analysiseasures of COricing Forecasr the Wind Ens ...................ant Capacity nses for the W

mptions for cuinance ..........tures, includineatures ..........Taxes ...........licy Issues .........................le Portfolio G

hian Power CoOrdinances ....Marine Resou.....................rolina RPS Drolina Mount

Ordinances ....h Carolina Ut

Plains ..................................

w Bay .......................................................

under Favorab...............................................................

w the Best Ecolants ........................................................ssumptions –ns .................d Cash Flow –..........................................s per Node/Pl

OE .................sts – Energy anergy Plants .......................Factors) for t

Wind Energy Purrent likely an.....................ng Rating and....................................................................................

Goal (RPG) Pompany (APC.....................urces Commi.....................

Design ............tain Ridge Pro.....................tilities Comm

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......................ble Financing..................................................................onomics ..........................................................................Financial Me

......................– Return on In............................................lant Location .......................and Capacity ............................................the Wind EnePlants ............nd favorable ......................d Interest Rat........................................................................................rogram DesigCO) State Cor......................ssion Report .............................................otection Act ........................

mission ...........

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nvestment Met....................................................................................Payments ..............................................

ergy Plants .........................financing of t.....................te ......................................................................................................gn .................rporation Com...................................................................................................................................................

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Plant Capital C.....................thodology ..................................................................................................................................................................................................the Wind Ene...................................................................................................................................................mmission De...................................................................................................................................................

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8.2.8.2.

8.3 Mar8.3.8.3.8.3.

8.4 Del8.4.8.4.

8.5 Dis9.0 Mid-A

9.1 Eas9.2 Win9.3 The9.4 Win

10.0 Envi10.1 No10.2 Ri10.3 At10.4 Eu10.5 Ae10.6 Ra

11.0 Conc11.1 Po11.2 Fe11.3 Ec11.4 Te11.5 Pu

12.0 BibliAppendixparticipanAppendixAppendixAppendix

.5 North Ca

.6 Other Potryland ...........1 Maryland.2 State App.3 Zoning Olaware ...........1 State App.2 Delawaretrict of Colum

Atlantic Windstern Wind Innd measureme Mid-Atlantind Resource Pironmental Coon-Governmeisks to Birds atmospheric Emutrophication esthetics and adar ..............clusions ........olicy and Regederal Emphaconomic Asseechnical Unceublic Interest iography ......

x A: Interviewnts)................x B: Economicx C: Power Mx D: Examples

rolina Studiestential Barrier.....................

d RPS Designproval Proces

Ordinances .........................proval Procese RPS Designmbia ..............d Resource ....tegration Students and comc low level jePotential and onsiderations ental Organizand Bats Relamission Dispof Regional WPublic Attitu..........................................

gulatory Issuesis on Offsho

essment Resuertainties .................................................

w and Discuss.....................c Model Run arket Tradings of Coastal S

s ...................rs .......................................

n ....................ss .............................................................

ss ...................n ..............................................................dy (EWITS) .

mparisons withet as a potentiUncertainties.....................ation Workshative to Alternlacement ......Waters ..........de ...........................................................s ...................

ore Projects ...lts ................................................................................

sion Meetings.....................Examples ....

g Model ResuSites that coul

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012 Mid-Atlaned for Wind P

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......................d NGO meetin............................................ergy Plants ...ation ..............

iii

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... 137 ng ... 141 ... 147 ... 167 ... 189

iv

Table of F

Figure 1-1Figure 1-2height of Figure 1-3Figure 4-1Figure 4-2(300 km lFigure 4-3Figure 4-4Figure 4-590m Hub Figure 4-6Figure 4-7Figure 4-8Figure 5-1Figure 5-2Figure 5-3Figure 6-1(2013 DoFigure 6-2(2013 DoFigure 6-3Figure 6-4(2013 DoFigure 7-1Figure 7-2Figure 8-1Figure 8-2Figure 8-3Figure 8-4Figure 8-5Figure 8-6Figure 8-7Figure 9-1Figure 9-2Figure 9-3Figure 9-4Figure 9-5Figure 9-6Figure 9-7Figure 9-8

Figures

1 Near-shore 2 The Weathe312m above g3. COEs of Fo1. Mid-Atlant2. DELMARVline is to indic3. Location of4. Onshore &5. Mid-AtlantHeight - ......

6. Offshore E7. Offshore E8. Tall met to1. PJM region2. Example co3. PJM interc1. COEs for Fllars). ...........2. COE Resulllars) ............3. COEs of Fo4. COE Resulllars) ............1 Average PJM2. Offshore w1. VMRC Rep2. VMRC “M3. VMRC “M4. VMRC “Le5. Boone N.C6. UNC Revie7. Maryland E1. Measureme2. Seasonal an3. Diurnal var4. Seasonal an5. Annual Me6. Seasonal an7. Vertical pro8. Monthly m

wind plant iner Research Mground level.our Plants wittic States WinVA-Jutland Ccate scale) ....f NOAA Buo

& Offshore Platic Bight Reg.....................

EU Wind PlanEU Wind Plan

wer near a tunal operation ontour map wonnection no

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wind turbine pport Excluded

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mean wind at N

n Denmark - pModel simulat .....................th Favorable nd Plant MarkComparison w.....................

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Wind Power deriability in wi

eed at Each Aariability of thd speed at AbNOAA/NOS

produces election of low le......................Financing us

ket Areas .......where 2,400 M............................................ark, Circa 199re Lease Bloc......................stance from Sater Depth in mark. ..................................l marginal prselected for thLikely Financ......................urrent, Likely ......................Financing us

vorable Financ......................on ..................gns for shallow........................................................................................erimental Wi

re Wind Poweounties with Wnodes. ...........of the 100m

ensity (WPD)ind speed at E

Anemometer Lhe Difference

berdeen, MD. .Buoy BISM2

ctricity and seevel jets on Au.....................

sing PJM Forw.....................

MW of land-b..........................................96 .................cks and Wind.....................

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rice (LMP) dihe four wind cing using PJM.....................Financing us

.....................sing PJM Forwcing using Ca..........................................w bays and o....................................................................................indmill Built er DevelopmeWind Ordinan.....................Wind from th

) for each monEWITS. ........Level. ............e in Wind Spe.....................

2 (Bishop’s H

erves as aids tug 3, 2007 at .....................ward Prices (2.....................

based wind pla...............................................................

d Resources at.....................te of Construc. Open Water..........................................fferential on tmarket applicM Forward Pr.....................sing Calculate.....................ward Prices (2alculated COE..........................................cean applicat....................................................................................in 1979 .........ent Potential .nces ...................................he EWITS. ...nth of 2004. ............................................eed between .....................

Head, MD). ....

o navigation .1:00 am at a

......................2013 Dollars)......................ants are opera..................................................................t ......................ction .............

r .................................................................typical day. ..cations. .........rices ......................ed COE ......................2013 Dollars)E ............................................tions. .....................................................................................................................................................................................................................................................................................110 and 49 m............................................

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Figure 9-9Figure 9-1Figure 10Figure 10Figure 10Figure 10Figure 10

9. Annual me10. The Aug 2-1. NGO Mee-2. Bird Fligh-3. Atlantic F-4. Chesapeak-5. Survey of

ean wind at se2, 2007 low leting Agendaht Path MappiFlyway ..........ke Bay Dead f Anticipated

everal NOS loevel jet at acr

a ....................ing at Nysted.....................Zones ..........Tourist React

ocations in Deross-rotor heig......................d Wind Farm, ............................................tion to a Hyp

elmarva. .......ghts 60, 99 an..................... Denmark ..............................................othetical Win

.....................nd 140m AGL....................................................................................

nd Farm ........

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vi

Table of TTable 4-1potential s

Table 4-2

Table 4-3analysis) .

Table 5-1

Table 5-2energy va

Table 5-3

Table 5-4

Table 6-1

Table 6-2

Table 7-1

Table 7-2

Table 7-3

Table 7-4

Table 7-5Wind Ene

Table 7-6

Table 7-7

Table 7-8

Table 7-9

Table 7-1

Table 7-1

Table 7-1

Table 7-1

Tables DOE Estimasites in bays a

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PJM Forwaraluation estim

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ates of land-baand sounds). .

ssumptions u

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AEP AGL AOE APCOAWEAbp BNEFBOEM BOS BWEACAA CBF CF COE Cp CPCNdb DCF-RDELMDNR DOE DOI DominDPL-ODSIREEIA EPC EPRI EU EWITFCR FERCGW GHG HAP HURDHVDCICC IEC IPPs IRR

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nion ODEC E

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DAT C

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vii

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ment is continu

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at go beyond “ers and policyby objective qn options to ovurces in regio

ess identifiedn. Individuallyhood that deve

several majoment of wind eboth major anto overcome

mary Barrie

ary barriers tos; policy and rThese issues in

in the regionstern portion ontinental shelion is generalit is possible tet. Many of thocal governmen species collic uncertainty cesources are aantial degree,

ment for onsho

ummary

on, including ith excellent wf wind energythat is among

n ridgeline siteAlbemarle antten, constructions similar t

y-scale wind puing in the mi

ncy, the actuald are presenteenergy engin

cientist, and enat face value, r“literature revy makers, and quantitative anvercome the con is explored

d a number of y, these lesserelopers will in

or barriers to wenergy in thosnd minor, and

these barriers

ers and Mit

o wind develoregulatory issn these catego

n are limited pof the region,f in the Atlanlly consideredthat local terr

he potential rients concernesion issues. Cconstrains winavailable. Stat, developmenore and shallo

Delaware, Mwind energy p

y projects for g the highest ies, on the coand Pamlico Sction is commto ridgeline spower plant pid-west and w

l, as opposed d along with r

neer, power mnvironmental rather to invesiews” includinground truthi

nalysis and unchallenges. In

and factored

f minor challer barriers alonnvest in commwind energy dse areas whereprovides reco

s.

tigation Me

opment outlinsues, wind resories are not w

primarily to fo, Coastal landntic Ocean. Td to be inadeqrain may provdgeline sites

ed with the poCoastal wind rnd power devte-level suppo

nt of potential ow water wind

Maryland, Nortpotential yet bulk power gin the nation. astal plains, atounds, and at

mencing on yeites in our stu

projects underwest, but not i

to theoreticalreduction mecarket expert, aengineer. Thestigate in deptng, but not liming of all undenbiased reportaddition, critiinto the local

nges and barrne may not demercial scale development e they exist. Tommendation

easures

ned in this repsource uncertwholly indepeour areas – Rid areas, shallohe wind resou

quate to suppovide usable sitin the area ha

otential adversresources havvelopment in tort for wind poffshore win

d power deve

rth Carolina, Vhas only two

generation conAmple wind

t shallow shelt deeper wateret another winudy area. Yet rway. The quein the Mid-At

, barriers to wchanisms or ma regulatory ae team approath by personnemited to, in deerlying assumting along witical new technwind market

riers to the deerail wind enewind farms iwhich will efThis section sns to possible

port can be grotainty, businesendent of eacidgeline sites

ow Bays and Surce in the ceort commercites for “low wave been deterse impact on

ve not been adthose areas alpower varies wnd resources hlopment.

Virginia, and utility scale p

ntinues despitresources are

ltered water sr sites off the

nd plant in Pein the Mid-Aestion is whytlantic region

wind energy demitigation meaand policy expach was not toel experienceepth interview

mptions. This ith possible resnical informatprojections.

evelopment ofergy developmin the region. ffectively presummarizes thsolutions or

ouped into foss/ economic

ch other and din the Appala

Sounds in theentral plain thial scale windwind speed” trmined to be view sheds in

dequately chalthough recenwidely within

has eclipsed s

the District oprojects instate a growing e available at sites in Delawe Atlantic coaennsylvania -Atlantic Statesy wind power .

evelopment inasures. The PEpert, financial o accept theored in the field b

ws of key investigation wsponses or tion concernin

f wind energyment, but lessThe review aclude he identified mitigation

our general issues, and p

do interact. Wachian Moun

e east, and offhat makes up md developmenturbines comi“off limits” b

n the region, naracterized annt data indicatn the region atate policy

1

of alled

ware st. As in

s

n this ERI

etical by

was

ng the

y in sen also

public Wind ntains fshore most

nt, ng on

by noise,

nd, so, tes and,

2

One of theUncertaineconomicthe overri 1.2 Poli In each Stdevelopmand tax inthese progdefined carenewableto levels tdevelopmpower devAttorney ridgeline r

1.2.1 R As Renewprovide thCertificatesystem anfulfilled laand wouldinstalled iwastes (knRECs be lin-state soreached lepower proto extend It is likelyeffective iin other stto new ren

1.2.2 R In Virginirenewableminimumagreemenstatute. Thsupportedcurrently that the pr

e largest, andnties facing rec, technical (eding uncertai

cy and Reg

tate in the regment of wind ancentives. A rgrams currentategories of “e resources. Tthat would pro

ment. Certain lvelopment in General and tresources.

RPS and RPG

wable Energy he intended ines (RECs) req

nd there is no argely with “ad operate anyin the early 19nown as blacklimited to facources. The Nevels sufficienoject in Norththe Federal S

y that as the Nin incentivizintates in the renewable sour

RPGs are tre

ia the State Ce energy sold

m target to be mnts (PPA) for nhe Commissio

d under the prapplicable goroject would b

d most difficulegional wind p.g., relating tointy regarding

gulatory Is

gion, policies and other formeview of the dtly transfer parenewable res

Tax incentivesovide a signiflocal zoning athose jurisdic

the Public Uti

Gs are Ineffe

Portfolio Stancentive for dquired to fulfirequirement fanyway” cred

yway for reaso900s for econk liquor) for e

cilities deployNorth Carolinant to incentivi

h Carolina hasSection 45 Pro

North Carolinang in-state rengion are unlikces and that a

eated as Cap

orporation Counder the Co

met or exceednew wind powon determinedogram and th

oal was not prbe used to me

lt, barriers to project develoo grid intercog the future of

ssues

and programsms of renewabdetailed strucayments fromsources,” ands are generallyficant incentivand noise ordictions and in Nility Commis

fective

andards and Gdevelopment ofill the mandatfor creating ndits. Many creons other thannomic reasonsenergy needs.

yed after the Ra RPS requireize commercis recently beeoduction Tax

a requirementnewable enerkely to be effa portion, say

ps

ommission ruommonwealthded. The Comwer generatiod that the goa

hat any new rerudent. The Ceet the renewa

wind developopers fall intonnection capaf the Section 4

s are in place ble energy thrcture of RPS p

m ratepayers tod do not proviy limited in sve for onshorinances have North Carolinsion chills de

Goals (RPS/RPof wind and otes are allowe

new facilities.edits are genen RPS/RPG. Ts and pulp mil. North Carol

RPS law was pements escalaial wind powe

en suspended Credit.

ts become morgy, includingfective unless

75 percent, o

uled that the ph’s renewablemmission was on were “reasoals of the RPGenewable gen

Commission apable goal esta

pment in the Mo several categacity) and env45 Federal Pr

that nominalrough renewaprograms in eo pre-existingide an incentiscope and amore commercialbeen enacted

na, the interprevelopment of

PG) are curreother renewabed to come fro. Consequentlerated from faThese facilitiells that have flina is an excepassed and th

ate gradually oer developmebecause of th

ore stringent og wind power

and until theyof RECs origi

portfolio goal e portfolio pro

asked to deteonable and pr

G were caps oneration that wpplied this teablished for la

Mid-Atlantic gories: wind vironmental. roduction Tax

lly are intendeable portfolio each jurisdictig facilities thaive for the devount and do nl scale wind p

d that effectivretation of a sf almost all of

ently structurebles. Renewabom anywherely REC requiracilities that wes include hydfor decades coeption. Its RPhat 75 percentover time, andent. A proposehe failure of th

over time, the. However, thy require thatinate in-state.

shall be treatogram, rather ermine if tworudent” as reqon the amountwas not needest even thougater years. Th

is uncertaintyresources, Of course thex Credit.

ed to support mandates (R

ion reveals that fall into brovelopment of not generally power

vely bar wind state stature bf that state’s

ed, they do noble Energy e in the PJM rements are b

were built londropower plaombusted pul

PS requires that must come fd have not yeed coastal winhe U.S. Cong

e program wihe RPS prograt RECs be lim

ted as a ceilinthan as a power purchquired by the t of renewabl

ed to meet thegh it was asserhe Commissio

y.

ere is

the RPS) hat oadly f new rise

by the

ot

being ng ago ants lping at from et nd

gress

ll be ams

mited

ng for

hase RPG

les e rted

on

also suggemethod of One legislsuccessfuface simil 1.2.3 R MarylandConvenieCPCN is aincluding outcome iprojects leclearly de 1.2.4 R North Carcondominstatute waState PUCcontrary vvaluable w In North Ceffectivelyordinanceactivities shown a winstances ordinancesuch as onadopted. Sinterests aauthority 1.2.5 S Environmregion. Gepreclude tavailable financial bfacilitate dbaseline swind devedetail.

ested that if lof compliance

lative attemptl. It is also nolar issues.

RPS-RPGs F

d State law reqnce and Necea formal adjutechnical, ec

is uncertain. Iess than 100 Mefined process

Restrictive St

rolina’s Ridgeniums on highas informally C has adoptedview. The resuwind resource

Carolina and y bar develop

e. Developers that can have

willingness toit appears tha

es have been ane ordinance Several of theand have passof local gove

State Suppor

mental permittenerally envirthe use of envin the region.barrier, especdevelopment studies that caelopment prog

ow cost RECthan new win

t has been maot clear wheth

Face Indirect

quires that a wessity (CPCNudicatory proconomic and eIn Virginia, thMW. These lis and consequ

tate Statutes

eline Protectih ridgeline siteinterpreted by

d the interpretulting uncertaes.

Virginia, sevepment in those

of wind farme local impacto work with loat the siting oadopted that bthat bars deve

e states in the sed statutes sernments.

rted Studies

ting has not bronmental issvironmentally. However, thcially for smalof such proje

an identify sengram, but no

s generated bnd plants, then

ade to correct her other state

t Constraints

wind plant gre) from the Pu

cess that involenvironmentahe “permit-byimits and incouently are not

s and Local Z

on Act was enes and specifiy the North Ctation of the Aainty is a sign

eral counties e jurisdiction

ms should recots. For the moocal communif wind plants bear no reasonelopment of aregion have r

etting out mod

een shown tosues can be dey sensitive sitehe cost of conller projects tects, the statesnsitive areas. state in the st

y pre-existingn they should

this situationes with regula

s

eater than 70 ublic Service Clves public pal issues. This

y-rule” projeconsistencies bbarriers to de

Zoning and

nacted to bar fically excludeCarolina AttorAttorney Genenificant barrie

have adopteds. One countyognize that coost part, develities to strike has acquired

nable relationa wind farm wrecognized thdel noise and

be a barrier tefined, and aves, but adequaducting baselhat might be s in the regionNew Jersey h

tudy region h

g sources werd be utilized.

n, but it is notated utilities, s

MW must obCommission articipation an process can b

ct approval prbetween stateevelopment.

Noise Ordin

developmentes “windmillsrney General eral, but seve

er to developm

d zoning and/y in Marylandommercial scalopers have acthe appropria

d a political canship to the powithin one mihe need to pro

zoning restri

to the developvoided or mitiate “non-sensline environmmore approprn could conduhas conducted

has conducted

re available a

t yet clear whsuch as North

btain a Certifi(PSC). The isnd addresses be lengthy, exocess appliess may be dete

nances

t of unsightlys” from its teras applying t

eral counties hment of North

or noise ordind is considerinale wind planccepted this nate balance. Hast and local rotential impaile of a schooloperly balanceictions and lim

pment of winigated. Thesesitive” areas a

mental studiesriate in some uct broad envd such a study

d such a study

as a lower cos

hether it will bh Carolina, wi

icate of Publicssuance of a all relevant isxpensive and

s to “small” werrents but are

y resort rms. Howeverto wind farmshave adopted h Carolina’s m

nances that ng a similar

nts are industrnotion and havHowever, in srestrictive ct of a wind fl, have been e competing miting the

nd power in the issues can appear reason can pose a areas. To

vironmental y for its offsh

y in sufficient

3

t

be ill

c

ssues, the

wind e

r, this s. The a

most

rial ve

some

farm,

he

nably

hore

4

An overlythe legislaof leasingresources,consider tresult wasdetermineBay. Thisdiscussed state, whescale proj

1.3 Poli 1.3.1 E In recent yapplicatioManagemThe Natioenhanced blocks in proposals significan(nm) limit This largeconsideratSounds, acreated a b Our studybays and scosts are shurricane in the oce Based on cost of enestimated installatioinstallatioeventually$0.063 peThese estioffshore pdetailed eearly in th There are in the bay

y broad and inature directedg state-owned , the VMRC rthe economic s a widely dised that existins report effect

later in this rere state suppoects.

cy Change

Emphasis on

years the atteons to offshorement (BOEM) onal Offshore

commercial ithe Atlantic Oand has com

nt impact.” Alt in federal w

e emphasis ontion of possib

and from landbarrier to ons

y team reexamsounds. Windsignificantly hgenerated wa

ean than for th

detailed econnergy (in 2013

at $0.091 peron vs. $0.167 ons. Under poy the COEs (ier kWh Bay animates appearproject cost trngineering st

he Federal Wi

issues associys and sounds

nsufficiently rd the Virginia

bottomlands report providevalue of poss

sseminated anng competing ively ended freport, this issorted research

es or Mitiga

Offshore W

ntion of statee in Federal whas kindled mWind Strateg

interest in offOcean off the

mpleted necessll this effort h

waters.

n offshore oceble sites in an-based sites a

shore and Bay

mined the prevd resources aphigher, due paves up to 20 hose in the ba

nomic analysi3 constant dolr kWh (kilowper kWh for ossible favorabin 2013 constnd $0.119 perr to be consistrends in Europudies compleind Program.

iated with depbut these hav

resourced studMarine Resoin the Chesaped only a supsible wind sit

nd quoted repouses ruled ou

further considsue also arisesh could remov

ation Optio

Wind Power D

governmentswaters. The Umuch of this igy prepared bfshore wind d coast of Dela

sary environmhas created sub

ean applicatiod near the De

along the Atlay wind develo

viously over lppear to be martly to the plm height. Op

ays. COE resu

is, the levelizellars) was

watt-hour) for ocean ble financingant dollars) ar kWh Oceantent with pe and with eted by DOE

ploying turbinve been resolv

dy can, howeources Commipeake Bay anerficial exam

tes and possibort, in which ut any commederation of this in the conteve an econom

ons

Developmen

s in the Mid-AU.S. Departmeinterest from

by U.S. Depardevelopment. aware, Maryl

mental assessmbstantial inter

ons has drawnelaware and Cantic coast. Coopment.

looked applicarginally bettlatform cost inperations and ults are describ

ed

bay

, re

n.

nes ved

Figure 1electricit

ever, do more ission (VMR

nd its environsmination of poble compatibleit was reporte

ercial scale wis resource in ext of mappinmic barrier to

nt

Atlantic regioent of Interiorthe states andrtment of EneBOEM has d

land, and Virgments with favrest for projec

n attention andChesapeake Bonsequently,

cations in the ter offshore cn the ocean fomaintenancebed below wi

1-1 Near-shore wity and serves a

harm than goRC) to determi

s. In the absenotential issues e uses of botted that the Coind farms in tthe Common

ng the wind rethe developm

on has shiftedr, Bureau of Od potential proergy in consordefined three pginia, solicite

avorable resulcts beyond th

d resources awBays, Albemar

offshore win

shallow sheltompared to b

for deeper wate expense are ith Figure 1-3

wind plant in Ds aids to naviga

ood. In Virginine the feasibnce of adequaand did not

tom land. Theommission hathe Chesapeanwealth. As esources of thment of smalle

d from land-baOcean Energyoject developrt with BOEMpotential leas

ed project ts showing “n

he 12 nautical

way from rle and Pamlid developmen

tered waters obays, but capitter and survivhigher for pla3.

Denmark - prodation

nia, ility ate

e ad ake

e er

ased y pers. M e

no mile

ico nt has

of tal val in ants

duces

in Europeconcerns mcoal mininby focusinfeasible conavigationareas of p Large shasimilar areenvironm 1.3.2 S All of the energy imat residenbut not in because thare popula In DelawaGreenhou10% fromon each stto the stathave beenThis sourc All states District ofgeneratedconduct nhelp all po 1.4 Win There is areferenced(EWITS) Marylandmodeling measured wind meaestimate tareas. Res Four of thcame fromAdministrTogether

e and we beliemust be addreng and thermng on offshorost. While setn aids, rather otential shall

allow bays andeas in Europeental analysis

State Energy

Mid-Atlanticmports by deve

tial applicatioothers. All st

hey benefit mar although th

are and Maryuse Gas Initiatm power planttate’s individutes to be invesn held. Marylace of funding

should consif Columbia, V

d from RGGI’needed wind rotential comm

d Resourc

a paucity of wd data consist[1]. To exam

d and Virginiafor each of thdata sources

asurements fothe average disults were com

he measured wm NASA’s Wration programthese seven d

eve can be ovessed and balal power plan

re wind, it is ntback from shthan obstacleow water win

d sounds are ae that have nos is needed to

y Programs e

c State energyeloping indigons along withtates are strap

more individuahey result in o

land, money itive (RGGI), s by 2019. RGual CO2 limitsted in consumand has receiv

g is available o

der adding emVirginia, and s periodic car

resource measmercial develo

ce Uncertai

wind resource ts of modeled

mine the accura were obtainehe four wind available thar one or moreiurnal and seampared to mo

wind sites werWallops Island

m); and NOAdata sets were

ercome here. lanced againstnt emissions. Wnot clear whethipping channes. See Figurend sites that ar

a unique resoow been large quantify and

emphasize s

y plans mentiogenous resourch property an

pped for fundials. Funding ioverall small

is available foa ten-state caGGI operates ts and cycles amer programsved $188,828only to states

mphasis on prNorth Carolinrbon credit ausurements andopers.

inty

data suitable d estimates of racy of these wed and reviewmarket areas

at included hue years at mulasonal averagodeled estima

re described id site; CrisfielAA measureme used to estim

Environmentt the benefits While it may ther offshore nels is requiree 1.1. The Mire sheltered f

ource area in tly built out. A

d recognize th

small scale p

on policies faces. There are

nd sales tax aning these progis small, but cenergy contri

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carbon tradina portion of ths and clean en8,931 and Del

that are RGG

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ub height of grltiple heights

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in detail in thd, Maryland (

ments from Chmate the avera

tal issues, sucto bay water

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rams from thent to reduce C

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ase in value anstudies and ot

wind plant. CWind Integra

data from seveused as input

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ght off the Vireds in each of

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Figure 1-2 Aug 3, 2007

ese data were energy outputduring the sam

nt differenceseline data winat 100 metern that averagewind power c

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onal wind resntic region. L

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the ocean. Thwere about 15%economically

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with differen

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were found tocially. The ocere are technic

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though wind n initial cost, octed demand ad local wind stal and ridgelictual costs forNo “proposed

possible trendw sheltered waopment shifterices for founnt cost estima

on historical wmodities tradil Transmissioodes were sele, namely Clovc Company (Dan projects.

nd seasonal) fextrapolating2.5% price e

and another, hchievable Conontrols on coafor natural g

ment (DCF-ROpower sales wgrade and (2) g, and debt ratreturn for equ

ERI performemodel to calcnominal-dolla

and with favogap over mar

s to solve. If S

plants run onon the amounand price paidtrength estimine projects inr European prd” project cos

s in project praters less thaned to deeper wdations, insta

ates for bay an

wholesale priing exchange.on Organizatioected on the Pverdale node DPL-ODEC) f

for a simulateg forward for scalation, wh

higher-priced ntrol Technolal-fired plantsas or nuclear

OI) analysis. Twith current (fPower Purchted at investmity investors,

ed a DCF-ROculate the revar and consta

orable financinrket prices. TShallow Bay

n “free fuel”, tnt and timing od for the proje

mates, discussen the region. Wrojects that wsts were

rices. The stun 15 m deep awater, up to 30allation, nd ocean

ices in the PJM. PJM refers ton (RTO) forPJM system afor Ridgelinefor Coastal

ed 100 MW w25 years. Tw

hich is a scenario term

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potential imp

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ollars).

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rd by the ent

he

andle y fshore

ar-waters mated.

not

the me ojects

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y environmententally sensituld be avoided aesthetics arrom wind powzones” in the

is possible. Hwind energy

tal issues can tive sites but ad. Bats issuesre issues that wer that resule bay and oce

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be defined, aare not consids can largely bcan generally

lt from reduciean. Althoughause of potentt for the purpo

avoided or midered a barriebe avoided by

y be handled ting coal and oh changing putial initial opposes of this re

itigated. Theser to developmy raising the tthrough open other fossil fuublic opinion cposition, publeport.

se can precludment. Bird santurbine cut-indialog citing

uel burning, ancan be a challlic interest is c

de the use of nctuaries and n wind speed. g the value andnd from shrinlenging task, considered a

9

fly

d nking

10

2.0 Intr This reporin responsbarrier red09GO990(DNR). Princeton Baltimorewind and and federaincluded: regulatoryconsultanenvironmphysics, dand wind where he a senior min the elecconventio The team’be impedivalue, butlimited to,assumptioalong withtechnical iwind mark Benefits oof the Midterm poweConsequeidentified barriers to Results wgroups in regional e

roduction

rt presents resse to the U.S.duction progr009. Cost shar

Energy Resoe County (UMother renewaal and state enDr. Lynn Spa

y issues, and Dts have experental and regi

dynamics, andpower generaserved as sen

manager in thectric power buonal power pla

’s approach wiments to wint rather investi, in depth inte

ons. This invesh possible respinformation cket projection

of wind energd-Atlantic Staer price stabil

ently these benand discusse

o wind develo

were communiregional busi

environmental

sults of work Department

ram, competitred funding su

ources InternaMBC) and the able energy plnergy policy parling AtmospDan Lobue onrience in windional power gd air pollutionation policy is

nior counsel ae Environmenusiness has heants and for w

was to identifynd energy devigated in depterviews of keystigation was ponses or mitoncerning the

ns.

gy are widely ates include wlity, reduced enefits will no

ed. However, opment.

icated in meetiness, governml groups and N

conducted byof Energy, “2tive Funding Oupport came f

ational (PERI)Chesapeake

lant design, coplanning and pheric Physicn regional trad energy and ageneration issn transport. Mssues in this c

at the Justice Dntal Protectionelped in strucwind power pr

y and investigvelopment. Wth by means thy stakeholdersfollowed by o

tigation optione wind resourc

recognized. Rwind energy, aenergy import be discussedthis report is

tings and presments and unNon-Governm

y Princeton E20% Wind byOpportunity Afrom the Mar

) organized a Bay Foundatonventional pmanagement

cist from UMBansmission orgalso bring det

sues. Dr. SparMr. Buckheit h

country and aDepartment’sn Agency’s a

cturing and oprojects.

gate technicale did not accehat go beyonds and policy mobjective quanns to overcomces in the regi

Renewable Poacknowledginrts, job creatiod here. Regiomore specific

sentations at rniversities. In mental Organ

Energy Resoury 2030: TopicAnnouncemeryland Depart

a team includition (CBF). PEpower plant imt. In addition BC, Bruce C.ganizational ctailed and brorling is a promhas consulted abroad since rs Environmenair program. Mptimizing tran

l, business andept theoreticald “literature remakers, and grntitative analy

me the challengion was expos

ortfolio Standng its value inon and reduce

onally specificcally focused

regional workaddition the C

nizations (NG

rces Internatic2A Wind Powent Number: Dtment of Natu

ing the UniveERI staff are mplementatioto PERI staff. Buckheit, adconsiderationoad perspectivminent scienti

on a number retiring from tntal EnforcemMr. Lobue witnsmission agr

d regulatory il or “reportedeviews” includround truthingysis and unbiages. In additiosed and factor

dards or Goalsn terms of sused air and wac or unique mon defining a

kshops, seminCBF hosted a

GOs).

onal, LLC (Pwering AmeriDE-PS36-ural Resource

ersity of Maryexperienced

on, project finf, key consultddressing ns. These ves on ist on atmosphof fossil fuel

the governmement Section a

th his experiereements for

issues that cod” barriers at fding, but not g of all underlased reportingon, critical newred into the lo

s (RPS/RPG)stainability, loater pollution. market drivers

and overcomi

nars and direca meeting of

PERI), ica”

s

yland in

nance, ants

heric l-fired ent and as ence

uld face

lying g w

ocal

in all ong-

are ing

ctly to

3.0 Goa The objecdevelopmmitigating Specific oto define sto analyzecharacterienvironm Our goal winclude:

1. “T2. “P3. “W4. “C5. “C

als and Ob

ctive of this stment of wind eg those barrie

objectives arespecific techne the economiistics and uncental conside

was also to di

The only usefPopulation deWind resourcCoastal wind Competing us

bjectives

tudy is to defienergy in the Mrs.

: 1) to refine nical, businesic factors that

certainties in trations in per

ispel or reduc

ful winds are ensity is too hce is not suffic

power cannoses rule out m

ine technical,Mid-Atlantic

the understans, and regulatt may impact the local windrspective with

ce myths abou

at ridgeline shigh on coastacient in coasta

ot compete wimost of the oth

economic anregion and to

nding of the ntory barriers aproject devel

d resource poth other power

ut Mid-Atlant

sites and mostal plains.” al plains, bayith stronger ofherwise availa

nd policy issuo identify mec

nature of the ralong with oplopment decistential and 5)r generation te

tic wind powe

t of those are

y(s) and soundffshore wind able bottomla

ues that have bchanisms for

regional windptions for ovesions, 4) to qu) to put wind eechnologies.

er markets. T

on protected

ds.” strengths.”

and.”

been impedinovercoming

d energy markercoming themuantify energy

hese myths

land.”

11

ng the or

ket, 2) m, 3)

12

4.0 Reg The regioColumbiaresources,potential. different d As shownmountainsDelaware over the C

Figure 4-1.

To quantiNational REnergy (Dwind resoindividualChesapeakagain not Carolina 8data are suThese excsounds. Tcan be ov If fully demegawatt 1 NREL esti50 m height

gional Ene

n chosen for a, generally ha, growing demFor purposes

development

n in Figure 4-s, 2) Coastal –and Chesape

Continental sh

Mid-Atlantic S

fy these markRenewable EnDOE) titled 20ource potential state are: Mke Bay), Delaincluding De

807 MW on aummarized inclusions could

The potential cercome.

eveloped, assut-hours (MWh

imated an averagt. See Table B-10

ergy Situa

this study: Deas similar winmand for elecs of this studyissues and po

-1, the market– on the plain

eake Bays, Alhelf off the At

States Wind Pla

kets , the authnergy Labora0% Wind Ene

al by 2030 at 1aryland 1,483aware 9.5 MWelaware Bay, Vand offshore pn Table 4-1 thd be reconsidecapacity could

uming an aveh) annually. T

ge capacity facto0 in reference 1.

ation - Rip

elaware, Marynd energy mactricity and yey, the wind enotential

t segments arens east of the lbemarle and tlantic coast.

ant Market Are

hors of this repatory (NREL)ergy by 2030. 16 to 43 thou3 MW onshorW onshore (likVirginia 1,79potential largehat also descriered but mored equal the of

rage 35% capThat amount o

or of 35% in 201

pe for Win

yland, North rket character

et almost no dnergy market i

e: 1) RidgelinPiedmont, 3) Pamlico Soun

as

port expanded in preparing This report e

sand megaware and 53,782kely underest3 on land ander than the othibes land areae important isffshore estima

pacity factor1,of electricity i

10 increasing to

d Market

Carolina, Virristics. These

development ois divided int

ne - along the Sheltered Wnds, and 4) O

d on the data their study fo

estimated the atts (MW) [3]2 offshore (notimated) and d 94,448 offshher Mid-Atlaas that were es the omissionates provided

, wind could is equivalent

38% by 2030 fo

Developm

rginia, and the include: reasof the availabto four segme

e tops of AppaWaters – in the Ocean – offsho

and models uor the U.S. Dusable Mid-A

]. DOE’s estimot counting posimilar to Mahore plus the

antic States coexcluded fromn of possible sd potential env

supply at leasto 15% of the

or Class 3 wind r

ment

e District of sonably good ble wind energents each with

alachian shallow wate

ore in deeper

used by the epartment of

Atlantic regiomates for otential sites iaryland offshoBay, and Nor

ombined. Them consideratiosites in bays ovironmental i

st 50 million e current five

resource measure

wind gy

h

ers in water

onal

n the ore rth

ese on. or ssues

-state

ed at

Barrier Mitigatpotentiamisinfor

consumptthis report Table 4-1 Dbays and so

The wind turbine caestimated maps drawClass 3 anhigher altiestimates.could dram 4.1 Mid- 4.1.1 R Ridgeline120 MW some locaprojects onotable ththe 790 Mnew ridgeMehoopanhad alreadplants opein PennsyPennsylvacounty. Tfamiliarity

State

MarylandNorth Caroli

DelawareVirginia

r – Visual imp

tion Option –al wind powerrmation abou

tion, based ont will show th

DOE Estimates ounds).

resource dataapacity being

as Class 2 orwn at 50 metend excluded eitudes, indica. The basis fomatically incr

-Atlantic W

Ridgeline Site

e sites have enin two wind p

al governmenor caused themhat in nearby PMW of wind peline projects ny beginning dy been damaerating, and reylvania. Althoania Departmhis was aimedy wind turbin

Total (km2)

Ex

567.7ina 1,155.60

36.61,567.20 1

Windy La

pact from ridg

– Support demr plant sites in

ut noise and vi

n Energy Infohat potential e

of land-based a

a available at located either

r below were er (50 m) heigexcept ridgelinate that Mid-Aor new higher rease the wind

Wind Energ

es

ncountered seplants have bets and in Nor

m to be abandPennsylvania

plants in Pennare being buiin June of 20

aged by strip mecognizing th

ough in some ment of Enviro

d at educatingnes through sm

xcluded (km2)

Available(km2)

271.1 296.6994.1 161.534.7 1.9

,208.50 358.7

and Area ≥ 30% G

geline sites.

monstration prn an effort to isual impact.

rmation Admelectricity pro

and offshore win

the time of thr on ridgelineconsidered to

ght that were nes [5]. More

Atlantic coastawind resourcd energy pote

gy Market S

rious oppositeen built in Mth Carolina th

doned. These ia, wind develonsylvania at thilt this year in012. In some cmining, later

heir economiccases there is

onment had a g the public amall projects.

e Available % of State

%L

1.18%0.13%0.04%0.35%

Gross Capacity Fac

rojects with tuincrease techn

ministration (Eoduction from

nd energy poten

he DOE studyes or at offshooo “marginal”used in the st

e recent wind al areas may bce estimates isential for land

Segments

tion in MarylaMaryland. Opphe “Mountainissues are disopment is prohe end of 201ncluding a 13cases the initiother ridges a

c and environms still organizepolicy to supp

and winning gThis leads to

% of Total Windy Land Excluded

I

47.80%86.00%94.80%77.10%

ctor at 80 m

urbines instalnology accep

EIA) data fromm wind may be

ntial by 2030 (b

y resulted in nore ocean site” to be considtudy, virtuallyresource meabe several pos discussed ind-based sites.

and, Virginia position fromn Ridge Protecscussed in detoceeding well 1 are currentl1 MW plant tial projects wand farm landmental benefied oppositionport wind dem

general accepto a possible so

Installed Capacity (MW)1,4838079.5

1,793

Land-Based Wi

lled in commuptance and to

m 2010 [4]. Ae substantially

but not counting

nearly all of tes. In the DOEdered. Lookiny all of the lanasurements, sower classes hn detail later i

and North Cam some memb

ction Act,” hatail later in thion similar te

ly located on that began ins

were placed onds were emplofits, has helpedn, several yearmonstration ptance based oolution in the

y Annual Generat(GWh)4,2692,395

265,395

ind Energy Potenti

unities near overcome

Analysis later y underestim

g potential sites

the projected wE study, sites ng at wind resnd area was bome measure

higher than eain this report a

arolina, althoers of the pubave delayed is report but irrain. Nearly ridgelines. Fi

stallation in n mountains toyed. Seeing d to open marrs ago the projects in eveon increased

target states.

Offshore Po

tion Estimated C(MW)53,782

Very LaSimilar to M

94,448

ial

13

in ated.

s in

wind

ource below ed at arlier and

ugh blic,

it is all of

ive

that wind rkets

ery

otential

apacity )2

argeMaryland

8

14

4.1.2 C This studyenergy decoast. As usable giv Populatiomillion pehighway cfrom ridge For persp(DELMAGermany 4-2. Both Wind resoaverage mestimated Wind Atlaenough enduring lowSweden aperiods in

Figure 4-2. to indicate

Coastal Plain

y concludes thevelopment. Tmentioned pr

ven better win

n high densityeople live in tcorridors. Howeline areas an

ective, the coARVA) penins

to the northerregions are m

ources are commeasured at 50

Class 3 resouas). In 2010, Jnergy to meetw demand perand Germany.n Denmark [7

DELMARVA-scale)

n Sites

he plains eastTerrain varies reviously, thend measureme

y is often citethe five-state wever, the hig

nd agricultura

oastal plain in sula. The Danrn tip. DELM

mainly agricul

mparable with0 m above grource of 6.4 to Jutland had mt 100% of theriods at night Electric pow].

-Jutland Compa

t of the Appalfrom rolling

e wind resourcents and mod

ed as a reasonRegion, maingh density urb

al areas along

Denmark cannish Jutland P

MARVA has sltural with so

h open plainsound level [67.0 m/s at 50

more than 2,40 Danish electwhen actuall

wer was later r

arison where 2,

lachian Mounhills in the wces once thou

dern turbines w

n for lack of renly in urban aban areas in tthe coast that

n be compareeninsula is ap

similar dimenme urban and

in Denmark ]. This is only

0 m height (th00 MW of lantrical load. Hily much of threturned from

400 MW of lan

ntains containwest to large reught to be marwith taller tow

egional wind and suburban the region aret have stronge

ed to the Delapproximately

nsions and topd industrial ar

reported at 6y slightly betthe standard hend-based winighest wind g

he wind energym other genera

nd-based wind p

n many sites selatively flat rginal are nowwers and larg

developmentareas along th

e generally moer wind resou

aware – Maryl300 km from

pography, as sreas.

.5 to 7.5 m/s ter than DELMeight used in t

nd plants prodgeneration peny was exporteating sources

plants are opera

suitable for wareas near thew considered er rotors.

t. In fact, 25 he Interstate ore than 50 murces.

land – Virginm the border wshown in Figu

average annuMARVA withthe European

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asured at peake Light

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r (1984), Wind Waves: th

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http://buoybay.noaa.gov/o

tute of Oceanography, C

ucsd.edu/?nav=historic&s

ay Interpretive Buoy Sys

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ttp://www.ndbc.noaa.gov/

heir Generation and Prop

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observations/data-graphi

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sub=data&stn=147&stre

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dition, 2008

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The availaassociatedRegardlesan installaoffshore i The cost bEurope. Tslightly mDenmark Agency (Ihad risen depth, witmore chalthis report

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benefit of depThe first sea-bmore costly tha

in 1996 are sIEA) regardinto $3.88 millth most early llenging condt.

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measurementsreme 100-yeat wave heighthallow watersThis differenc

ployments in sbased plants wan land-based

shown in Figung offshore apion per MW (plants less th

ditions in the N

s are short terar storm that ws and extreme

s of bays and ce is reflected

shallow sheltewere located nd installationsure 4-4 alongpplications. B(double land-

han 10 km froNorth Sea [7]

rm (less than would be neede waves are asounds that a

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ered waters cnear shore in vs. The land-bag with commeBy 2009, Denm-based costs) m shore. Late

]. These cost t

five years) anded to updatea factor of 8-1are sheltered ftudies later in

can be seen frovery shallow ased and offshent reported tomark reportedas projects wer projects wetrends are ana

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om initial offsheltered wat

hore plant loco the Internatid that offshor

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shore compareconditions

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17

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ts in e

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18

Figure 4-4.

4.1.4 O There are waters, whcontinentathe Mid-A DOE in cothe Burealease bloccompletingrowth ofdescribed

Onshore & Of

Offshore Oce

vast areas ofhere large wial shelf is up

Atlantic Bight

onsort with Dau of Ocean Ecks in Federalng a regional ef a commerciain the Nation

ffshore Plants in

ean Sites

ffshore along nd power plato 200 nautict, see Figure

Department ofEnergy Managl water for wienvironmentaal offshore winal Offshore W

n Denmark, Cir

the East coasants can be depal miles (nm)4-5.

f Interior’s Bugement, Regund energy pro

al assessmentind industry iWind Strategy

rca 1996

t and elsewheployed. This ) wide with re

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ere in the U.Sincludes the o

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anagement (Bare aggressiveepting lease oigned to promhese federal eaw on lessons

te and federalhere the m water dept

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Figure 4-5.

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onomic barriehines (possiblhis option is d

Marine-Cadastre-

f larger hopef20 [10].

ight -

2012. Lease bloc

ration programion Tax Crediextended, theThe DOE

to have one or

ers by reducinly 500 MW) idiscussed in m

-Map-

19

fully

cks for

ms it re are

r

ng in more

20

4.2 Ene The Mid-Ain the nati3.2%. Allrenewablepromotingnot provenregion. As a resulRECs fromlocated inproject co The energThere is cold plantsplants pla Wind resothe inevita 4.3 Euro NREL rep(depth of projects wminimize Since 200projects into 45 km ddata was cfrom publ[12]. Data on fucapital cotrends assTable whefurther fro

Barrierfrom co Mitigatmeasureand soun

rgy Situati

Atlantic Stateion. Accordin of the Sates he energy fromg local job cren to be suffic

lt, all of the Mm pre-World

n other states. onstruction job

gy supply shocurrently onlys supplying neanned, and all

ources can woable decomm

opean Offs

ported, “Of th30 m or less)

were constructdevelopment

07, other Euron deeper watedistance to shcompiled fromlished data fo

uture projectssts are listed

sociated with ere similar sizom shore in w

r – Federal anastal and shel

tion Option –ements, econonds.

ion in the M

es have seen cng to EIA, annhave energy p

m in-state soureation. Howevient to encour

Mid-Atlantic SWar II hydroThis has the bs elsewhere.

rtfall will be y one new 600early half of tbut three of t

ork well to acmissioning of t

shore Proje

he 50 installed and an averated in shelteret cost and risk

opean Union (er further fromhore, costs havm NREL’s dar a total of 36

s was collectein Table 4-3.increasing waze projects sh

water up to 22

nd Mid-Atlantltered water a

– State and Feomic/regulato

Mid-Atlanti

continuing grnual growth inplans and goarces, reducingver state policrage significa

States are incroelectric and oeffect of crea.

complicated b0 MW coal plthat state’s elethe units in th

ct, along with these outdated

ect Cost T

d and proposeage depth is 1ed waters in Nk.

(EU) countriem shore. As pve increased ata base used 6 projects that

ed but not use. In examiningater depth and

howed cost im2 m depth. Co

tic State prograpplications th

ederal programory analysis, a

ic States

owth in deman power demals that place g Greenhousecies and incenant wind or ot

reasing electrold industrial ating equipme

by planned phlant under conectricity genehe eight existi

combined cyd coal plants.

rends

ed projects in 2.9 m.” As mNordic countr

es have entereprojects now hsubstantially in the Offshot had been bu

d in the analyg this data, it d distance fro

mpact of an adonsequently, l

ram emphasishat will be les

ms can be expand environm

and for electrimand in the fiv

importance oe Gas (GHG)ntives neededther renewabl

ricity imports plants or from

ent manufactu

hase out of agnstruction in Verated. In Maring coal plant

ycle natural ga

the [NREL] mentioned prevries. This was

ed the offshorhave foundatito over $6 m

ore Barriers anuilt and comm

ysis. The projappears clear

om shore. Foudditional 16 toater in this re

s is on offshoss costly.

panded to empmental assessm

icity that is amve states rangeon increasing and other em

d to achieve thle energy dep

and are buyim renewable uring and rene

ging thermal pVirginia and ryland there ats are over 40

as units, as a r

dataset, 48 arviously, manys intended and

re wind markeions in 30 m w

million /MW innd Opportuni

missioned for o

ects and theirr that there arur cases are hio 40% as a reeport a 30% co

ore, drawing a

mphasize windments for coas

mong the higes from 2.0 tothe use of

missions, and hese goals ha

ployment in th

ng a majorityenergy projecewable energy

power plants.there are a do

are no new coyears old.

replacement f

re in shallow y of these initd did effectiv

et with largerwater depth an some cases.ities report anoperation [11

r announced re significant ighlighted on

esult of buildinost increase w

attention away

d resources stal areas, bay

hest o

ave he

y of cts y

. ozen al

for

water tial

vely

r and up . Cost nd ]

cost n the ng

was

y

ys

assumed fcompared Cost trendconstructiwere less than 10 kmsuccessfu More receoperating conditionstypically iClearly foeconomic

for offshore tod to bay applic

ds were analyion. Results acostly regardm from shorel. This is cons

ent European conditions ar

s than what cin 30 m of waoundations anc analysis late

ower foundatcations. See S

yzed by countrare shown in Fdless of plant e. These initiasidered to be

projects werere more diffican be expecteater depth andnd turbines canr in this repor

tion costs alonSection 6 and

ry, project sizFigure 4-6 ansize since mo

al projects, boan important

e primarily incult. These sited at offshored are exposedn be built for rt.

ng with incread Section 7 of

ze, water deptnd Figure 4-7ost were in sheth large and slesson that c

n exposed sitetes are still coe BOEM leased to severe con

these conditi

ased operatiof this report.

th and distanc7. Projects buieltered watersmall had siman be drawn f

es in the Northonsidered to be sites in the Unditions in thions but the a

ons and mainte

ce from shoreilt between 19

rs less than 15milar cost per

from Europea

h Sea where cbe substantiallU.S. where fo

he North Atlanadded costs ar

enance costs

e and date of 990 and 20065 m deep and MW and weran experience

construction aly less challenoundations arentic Ocean. re included in

21

6 less

re e.

and nging e

n the

22

Table 4-3. T

The future projjects and their aannounced capiital costs (data ccollected, but nnot used in the aanalysis)

Figure 4-6.

Figure 4-7.

Some EUmaterials macro-eco

Offshore EU W

Offshore EU W

studies attrib(steel, copperonomic condi

Wind Plant Cost

Wind Plant Cost

bute the cost ir, cement, etcitions [13]. Th

t vs. Distance fr

t vs. Water Dep

increases for rc.) and the inchese studies a

rom Shore and

pth in Sheltered

recent offshorcreased demanalso project th

Date of Constr

d vs. Open Wate

re plants to innd for land-bahat stronger w

ruction

er

ncreasing cosased machine

winds and larg

ts for raw es plus other ger turbines d

23

double

24

Barrier from coa Mitigatimeasureand soun

the hours these estimcomplete Analysis odeploymesounds. Tfar less risprimarily be addres All this prshallow atsubsequen 4.4 Iner The BOEMlocated inof no signstates andfrom shor But there wind meauncertaintmet tower4-8 of a tadeveloper

– Federal andastal and shel

ion Option –ements, econonds.

of full powermates and theprojects are u

of European eent in the largThese sites avosky to develoimportant, bused or mitigat

resents a uniqt a lower costnt larger deplo

tia toward

M offshore wn the ocean. Enificant negatid DOI can expre and away fr

are consideraasurements anties regardingrs to at least hall met tower rs will benefit

d Mid-Atlantiltered shallow

– State and Feomic/regulator

r operation ofe wide range oused in this st

experience sue areas of sheoid extreme sp and maintaiut unique winted more easi

que opportunit and there byoyments in th

Ocean Ap

wind lease pronvironmentalive impact. Tpect use revenfrom bird mig

able uncertainnd metocean dg cost. One wahub height or near a turbine

t.

ic State progrw water applic

deral programry analysis an

ffsetting someof costs projetudy.

uggests that sieltered, shallotructural loadin than ocean

nd resources, sily at the State

ity for the Midy establish thehe ocean lease

pplications

ogram has crel studies havehere has been

nues and jobs ratory routes.

nties and majodata, lack of cay to reduce tpreferably the in Denmark

The offshbe very happlicatioemphasisareas on unique opoperatingdramatic In Figurturbine. Wor above

Figure 4-8

ram emphasiscations that w

ms can be expnd environme

e of the addedcted for U.S.

ignificant cosow state contrds resulting frn-based applicsimplified rege and local le

d-Atlantic Stae supply chaine blocks.

in U.S.

ated substante been complen extensive prto result. Als

. Some would

or risk on thisconstruction athese risks coe top of the tu

k. If the data i

hore wind demhelpful exceptons. During ts on potentialthe bays and pportunity to g experience. ally reduce th

e 4-8, a tall mWind measurthe top of the

. Tall met towe

s is on offshorwill be less cos

panded to inclental assessme

d cost. Becausoffshore win

st savings are rolled waters rom ocean wincations. Engingulations andevel than at th

ates to introdun and infrastru

tial inertia toweted on manyromotion of thso the projectd say, “Out of

s path. Specifand operating ould be to funurbine rotor (is publically a

monstration pt the emphasithe design phal cost savings sounds of the acquire manuThis could se

he technical a

met tower stanrements need e swept area t

r near a turbin

re, drawing atstly.

lude wind resents for coast

se of the uncend projects, on

possible in thin the Mid-Ands and waveneering and e

d environmenthe Federal lev

uce wind planucture leading

ward initial Uy of the lease ahese applicatits would be laf sight and ou

fic areas of co experience ind wind measu

(say 200 m heavailable all p

projects plannis is aimed at ase it is possiin sheltered w

e Mid- Atlantufacturing, coerve to quanti

and financial u

nds to the righto be taken atto accurately

ne in Denmark.

ttention away

source tal plains, bay

ertainty regardnly costs for

he U.S. with Atlantic bays aes and would conomics aretal issues can

vel.

nts in sheltereg to the

U.S. deploymeareas with finions and both

argely out of sut of mind.”

oncern are: lacn the U.S. andurements usineight). See Figpotential

ned by DOE wocean ble to add waters. The latic States provonstruction anify costs and uncertainties.

ht of the windt hub height adefine wind s

y

ys

ding

and be

e often

ed

ents ndings h sight

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will

arge vide a nd

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5.0 Pow PennsylvajurisdictioConsequeSouth wasprovisionadecided togrid is ope PJM coorIndiana, KVirginia,

Figure 5-1.

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wer Trans

ania-Jersey-Mon over muchently this repos planned to ially approvedo continue to erated by the

rdinates the mKentucky, MaWest Virgini

PJM regional o

PJM has no dvide a platforme energy to thgeneration andm reliability, ar power suppln to the PJM

perational autity to encouraent and un-biat to bring reso

g congestion an of transmissstent with Statelling and delrkets. This sho

mission a

Maryland (PJMof the power

ort is focused include much d by the Federoperate their federally con

movement andaryland, Micha and the Dis

operation area

direct influenm for participhe grid. PJM td power markand transmissly source divesystem.

thority for all age long term ased toward tources to markand employinsion and genete energy planlivery of shortort term view

and Pricin

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ral Energy Reown power s

ntrolled Tenne

d pricing of whigan, New Jetrict of Colum

nce in the deplation of windtraining materketing interestion service w

ersity although

regional tranuse of renew

the use of oneket. Consequg a transmissration facilitins and goals. t term wholes

w hinders intro

ng

ional Transme Mid-Atlant

rating and powrolina and sevegulatory Comystems [14]. essee Valley A

holesale electersey, North Cmbia.

loyment and dd plants and isrials defines its and has exc

within a regionh wind and so

nsmission faciwables. PJM ine type of energently PJM foion pricing syes today, not In fulfilling i

sale electricityoduction of ne

mission Organitic region covwer pricing poveral other Sommission (FEIn addition a Authority (TV

tricity in all oCarolina, Ohio

development s not a direct bits role as, “Aclusive responn." There is nolar are allow

ilities under Pntends to remgy technologycuses on mainystem that winecessarily in

its role, PJM y administereew technolog

izations (RTOvered in this stolicies. Anoth

outhern StatesERC) but the small portion

VA).

or parts of Deo, Pennsylvan

of wind powbarrier to the

An entity that insibility for g

no mention of wed into the qu

PJM's controlmain technolog

y or another. ntaining systeill promote efn the long tercoordinates th

ed through Dagies like wind

O) with tudy. her RTO, Gris. It was involved utilin of the region

elaware, Illinonia, Tennesse

wer in the regioconnection o

is independengrid operationf sustainable ueue for

emphasizes tgy neutral, PJM’s percei

em reliabilityfficient use anrm, in ways thhe continuouay Ahead andthat are more

25

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ities nal

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on, it of nt ns,

the

ived y, nd hat s

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26

costly initPJM polic 5.1 Reg The PJM specific lothe same acertain loclocational The PJM forward moffers, dem The Real-based on asettles tran PJM is thePJM web

• Pkesh

• Incare

• Pfafran

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This givesneighbori 5.1.1 P Due to thelimitationhave the s Typically higher demsystem ca

tially but are lcies are chang

gional Who

market uses location and tiacross the entcations. In thal marginal pri

Energy Markmarket in whicmand bids an

-Time Marketactual grid opnsactions hou

e independensite the opera

JM's staff moeeps the electhould be gene

n managing thapacity over 6egion.

JM’s staff anault events. Erom extreme wnticipated cyc

JM exercises onduct dispatata from near

s PJM a big-png systems.

Power Pricing

e location andns on transfer same wholesa

the more ecomand centers

annot transfer

lower cost in ging and it is n

olesale Pow

locational maime it is delivtire grid. Wheat case, more-ice is higher i

ket consists ofch hourly LM

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t is a spot marperating condurly and issue

nt centralized ational decisio

onitors the higtricity supply erated and by

he grid, the co65,441 miles

alyze hundredach variable tweather condcles of hours,

a broader reltch operationsrly 74,000 poi

picture view o

g Model – M

d separation ocapability of

ale energy val

onomical gene(i.e. eastern cadditional “e

the long termnot considere

wer Pricing

arginal pricingered. If the loen there is tra-expensive eln those “cons

f Day-Ahead MPs are calculbilateral trans

rket in whichitions. Integra

es invoices to

market operaons can be ch

gh-voltage traand demand adjusting imp

ompany dispaof transmissi

ds of "what ifthat might aff

ditions, emergdays, weeks

liability role ts and monitorints on the gri

of regional co

Methodology

of supply recothe transmiss

lue.

eration locatecoast/I-95 coreconomic” ele

m. Although thed to be a barr

g

g (LMP) that owest-priced eansmission colectricity is orstrained” loca

and Real-Timlated for the nsactions.

h current LMPated hourly remarket partic

ator for the Miharacterized a

ansmission grin balance byport and expo

atches about 1on lines. Mor

f" scenarios afect supply angency situation

and seasons.

than that of a r the status of id.

onditions and

ourses from thsion system, n

ed in western rridor) due toectricity to me

his can be an rier to wind e

reflects the velectricity can

ongestion, enerdered to meeations.

me markets. Tnext operating

Ps are calculateal-time pricecipants month

id-Atlantic reas follows:

rid 24 hours ay telling poweort transaction

185,600 megare than 60 mil

and prepare tond demand fons and equipm

local electricf the grid over

reliability iss

he location ofnot all locatio

regions is noo transmissioneet demand, t

impediment energy develo

value of the enn reach all locergy cannot flet that demand

The Day-Aheag day based o

ated at five-mies are publicahly.

egion. Based o

a day, seven der producers hns.

awatts (MW) llion people l

o deal with typor electricity iment failures

utility. PJM r a wide area,

sues, includin

f load centersons in the Mid

t able to fullyn system consthen more exp

short-term, thopment.

nergy at the cations, pricelow freely to d. As a result

ad Market is aon generation

inute intervalally available.

on data from

days a week. Phow much en

of generatinglive in the PJM

pical load ands considered –to the more e

system opera using teleme

ng those in

, and the d-Atlantic reg

y support the straints. Whenpensive gener

he

es are

, the

a

ls PJM

the

PJM nergy

g M

d – easily

ators etered

gion

n the ration

has to be as shown a higher e

Figure 5-2.

One set ofregion weIt is helpfuwholesale There are industry amarket pothis type oand budgepower flo Powerflowby-hour ptransmissidetailed edeterminedispatchedsatisfy trathe nodal To examinrepresentishown onthe four resounds; an

dispatched. Tin Figure 5-2

energy value t

Example PJM

f questions foere economic ful to develope power prices

a variety of eas tools for peower studies. of study. Unfoet for this projw value asses

w analysis is production cosion system. Tlectrical mod

ed from a solvd. This makes

ansmission linlocations on

ne these regioing each of th

n Figure 5-2: egional wind nd ocean.

This maintains2. Consequenthen the un-co

contour map w

or this study wbarriers to eners to focus os, will suppor

econometric cerforming cosThe Optimum

fortunately accoject, so the aussment on a li

a production sts while reco

The models pedel of the entirved AC load fs it possible tone flow limitsa system.

onal value difhe four marketand nodes wemarket sector

s the protectiontly the transmonstrained are

with locational m

was to determntry or if deveon areas wherrt developmen

computer modst-benefit analm Powerflow cess to and ututhors of this imited set of n

cost model foognizing the cerform a transre transmissioflow, to calcuo capture the and security

fferences in tht sectors wereere selected fors: coastal pla

on and reliabimission constreas.

marginal price (

mine if power pelopment effoe the energy vnt efforts.

dels that are rlyses, valuatioanalysis is on

tilization of threport had tonodes.

or detailed, chconstraints onsmission-conson network, aulate the real p

economic peconstraints an

his study, foue selected. PJor analysis to ains; ridgeline

ility of the syrained areas o

(LMP) differen

prices in seleorts were occuvalue of the s

recognized byons, market sne of the bettehese types of o develop a sim

hronological sn generation dstrained produ

along with genpower flows fenalties of re-dand produces f

ur PJM nodes JM operates a determine the; sheltered w

stem, but at aof the Mid-At

ntial on typical d

cted areas of urring in the “system, as ma

y the Mid-Atlstructure asseser types of moanalysis was mplified vers

simulation thdispatch impouction simulaneration shift for each genedispatching thforecasted ma

in wind powea transparent nhe economic vwater, as shall

an increased ptlantic region

day.

the Mid-Atla“better” locatianifested by h

lantic utility ssments and odeling tools beyond the s

sion to perform

at calculates hosed by the ation, which u

factors eration unit he generationarket values f

er areas nodal system value of energlow bays and

27

price, have

antic ions.

higher

for scope m

hour-

uses a

n to for

as gy in

28

Following C

Cth

Epoalpr

Fpr[1

Figure 5-3. Source: PJM In the absthe referenindicativeprices at ttraded on

7 Delmarva

g are the selec

Cloverdale – 5

Calvert Cliffshe Chesapeak

Eastern Shoreoint for eitherlso used Indiarice data base

Fentress – a nricing node as15].

PJM interconnM 01-August-2

sence of forwance point for

e forward pricthe Western Hthe NYMEX

Power and Ligh

cted PJM nod

500KV node

– 500KV noke in the proxi

e – DPL_ODr Coastal Plaian River for ine, available to

node adjacent s another poin

nection node loc2011

ard pricing frocomparison o

cing curve valHub are considX commodity e

ht and rural elect

des and their c

to represent r

de – robust trimity of two u

DEC7 - an areains, Shallow wnterconnectio

o our study, di

to the Virginnt of potentia

cations selected

om PJM, the of prices at thlue of each lodered to be thexchange.

tric cooperative O

characteristics

ridgeline wind

ransmission curban load ce

a node on thewaters, as welon node, in thid not contain

ia Offshore oal interconnec

for the four wi

power markehe other four nocational nodehe most liquid

Old Dominion E

s. Their locati

d sites,

capacity node enters Washin

e Delmarva Pell as, Offshoreir offshore w

n Indian River

ocean lease blction in their b

ind market app

et consultant cnodal sites as e in this develd in the easter

Electric Company

ions are show

located near ngton , DC an

eninsula as a re interconnecwind study [1r node.

lock site. PJMbaseline Offsh

plications.

chose PJM’s a means of p

lopment studyrn interconnec

ny.

wn on Figure

potential sitend Baltimore,

proxy pricingction point. PJ5]; however t

M also used thhore Wind stu

Western Hubproviding an y. Electricity ction and are

5-3:

es in MD

g JM the

his udy

b as

5.1.2 E To providLMP datawhere RTpoints perThe differcan be seelow value These valNYMEX 24, 2011. trades moplus some The tradinfollowing

1. Q

2. E

3. Q BWye

4. V

5. Pho124

6. Sen F

Since the assume fowould notdemonstrainto accoudifferentiaCalvert C

Energy Pricin

de a basis for ta from 2007 toT LMP is Realr year per nodrence in valueen in Table 5es; others are s

ue differentiacommodity eAs is well-kn

ostly energy ce contracts for

ng data then wg sources and

Qualitative ana

EPA’s propose

Qualitative ana

Best case – NoWorst case – f

ears after that

Various trader

JM Off-peak ours are defin1:00 pm). Off4 (11:01 pm t

easonal appronergy pricing

our seasons a

study team dor this study tht actually occate the differeunt effects of al for impact liffs vs. West

ng

the value anao 2011 for thel-Time Locat

de, with adjuse reflects the c-1 the value asubstantially

als are added exchange tradnown, NYMEontracts (e.g.r agriculture a

was extrapolaassumptions:

alysis perform

ed transport ru

alysis using be

o impacts – ufull impact – t,

s and develop

and On-peakned by PJM aff peak hours athrough 7:00

oach to energy, while maint

are: Wi Spr Sum Fal

id not have fuhat historical ur nor is it a p

ent values of econgestion, hexperienced btern Hub).

alysis, four yee PJM Westerional Margin

stments for leacompeting soat some nodeshigher.

or subtracted des for the PJMEX is the New, crude oil anand metals, w

ated for 25 yea

med on potent

ule [16] [17]

st case vs. wo

se only the 2.take financia

pers were inte

k pricing withs Monday – Fare Monday –am) plus all h

y pricing in ftain the ability

inter – Dec, Jaring – Mar, Ammer – June,ll – Sep, Oct &

unding to utilcongestion p

preferred metenergy on thehistorical pricbetween the W

ears of historicrn Hub were al Pricing,. Hap years and t

ources of avais is less than t

from the WeM Western huw York Mercad refined petr

which is now o

ars to develop

tial impacts o

[18]

orst case to com

.5% inflation l impact in fir

erviewed for i

separate curvFriday, with h– Friday, thoshours Saturda

four markets cy to operate w

an & Feb Apr & May , July & Aug& Nov.

ize Optimizedpatterns wouldthod, but it we system by pcing informatiWestern Hub

cal data was ucompared wi

Hourly data mthe start and silable generatthe Hub price

estern Hub priub were obtaiantile Exchanroleum produowned by CM

p a forward en

of factors effe

me up with cu

adder, and rst couple of

input on futur

ves to reflect hours ending 0se hours endinay, Sunday an

categories to cwithin budget

d Power flowd remain the sould provide roviding thesion was used and each of t

used. Actual Pith the four se

means there arestop of dayligtion and local es. For examp

ice. Four yearined on the trange, a futures ucts, natural gME Group of

nergy curve u

cting forward

urves for 2015

years, then 2.

re power curv

pricing differ08 to 23 (7:0ng 01 to 07 annd Holidays.

capture the set of this report

w analysis softsame. We undus with enou

se indicative vto develop a

the four pricin

PJM cleared Relected nodes,e about 8.760ght savings timcongestion. A

ple, Cloverdal

rs of actual ade date of Mexchange, wh

gas, electricityChicago.

using the

d Energy pric

and beyond f

.5% adder for

ves,

rentials. On-P1 am throughnd the hour en

easonal effectt.

ftware, we hadderstand that

ugh informatiovalues. To tak“basis” or ng points (e.g

29

RT ,

0 data me. As le has

March hich y),

ing,

for:

r all

Peak h nding

ts on

d to such on to ke

g.,

30

As discusenergy priThe two s For the loadder. ThInformatioper year oearly relea For the hiMonthly Rstudy anal2016 – 202037. It is notedelectric geindustry cterm Cleasome unit Each of thWestern Hfour pricinvalues for

8 Annual EnWashington

sed with noteicing for this

sets of prices w

ower case, for is is conservaon Administr

over the next 2ase version [1

igh case, termRT LMP Swalysis on EPA

037, 2.5% was

d, regarding Menerators, butconceded thatan Air Act (CAts to install po

he four indiviHub forward png nodes for tr each location

nergy Outlook 20n DC; January 23

e 3 above, in oreport, it waswould show a

2014 – 2015ative based onration projects25 years (20119]. The rate w

med “2015 Adap for both onUtility Maxi

s used for the

MACT, that Et the more sigthe Utility M

AA) [23] provollution contro

dual historicaprice curve, dthe study. Thn. Below, in T

012, Early Relea3, 2012; Macroe

order to best as determined ta range of ind

, our power mn recent respes the Wholesa10 to 2035), awas 2.8% per

dder Prices,” fn-peak and ofmum Achiev

e inflationary

EPA issued rugnificant rule MACT is not c

visions will liol equipment

al, “basis” condescribed aboe four curvesTable 5-1, ar

ase Report, DOEconomic Indicat

account for thto represent thdicative outco

market consulected economiale Price Indeccording to thr the 2011 AE

for 2014 – 20ff-peak NYMEable Control adder. Projec

les regulatingis the air trancausing the shikely impact cand others to

ngestion costsve, to develop were utilized

re the differen

E/EIA-0383ER(2tors table.

he effects of these risks, by

omes.

ltant assumedic forecasts In

ex for Fuel anhe 2012 AnnuEO.8

15, our poweEX trades andTechnology (

ct analysis run

g hazardous ansport rule dishut downs, nacoal-generatino retire.

s was used asp indicative fd for the indicntial energy pr

2012), US Energ

the potential fy two sets of f

d 2.5% for then particular, t

nd Power to inual Energy O

er market consd data from p(MACT) stanns 25 years, fr

air pollutants (scussed previoatural gas pricng units in pa

s a “differentiforward pricincative forwardrice adders fo

gy Information A

future impactforward price

e inflationary the US Energncrease by 3.1utlook (AEO

sultant utilizepublically avandards. Then, from 2013 thr

(HAPs) emittously. Most inces are. In thearticular, caus

ial adder” to tng at each of td energy markor the four no

Administration,

s to es.

y 1% ),

ed the ailable

for ough

ted by n

e long sing

the the ket des.

Table 5-1. D

The four cTable 5-2node. TheFor examp Table 5-2class. For peak and

Differential Ene

curves were u2, are sample ey show on-peple, for Janua

2 further showJanuary 2013424 hours off

ergy Price Adde

utilized for theresults from teak and off-pary 2013, the

ws on-peak an3, these are 43f-peak. Additi

ers for Four No

e indicative fthe Forward Peak energy pron-peak price

nd off-peak po3.58 MW on-ional informa

odes Relative to

forward energPricing modelrices, at 2.5%e is $61.97 pe

ower capacity-peak and 45.ation on the fo

o Western Hub

gy market valul. These resul

% escalation, fer MWh and o

y and number.33 MW off-pour nodes is p

($/MWh)

ues for each llts are for the for years 2012off-peak is $4

r of hours per peak, as well presented in A

location. BeloCalvert Cliff

2 through 20141.80.

month in eacas 320 hours

Appendix C.

31

ow, in fs 14.

ch on-

32

Table 5-2 Pestimation,

5.1.3 C PJM Capapromote/mof name pdeveloperlevel. Thioccurs dudeterrent tand conse

PJM Forward Pbetween 2012 a

Capacity Pric

acity Value asmaintain reliaplate capacity rs intervieweds value is bas

uring summer to wind devel

equently lowe

Pricing Model Sand 2014, with

cing

ssigned by mability of the s

or a demonstd for this studsed on averagmonths. Althlopment. See er efficiency w

Sample Output –the full data ex

arket adminissystem. For wtrated annual

dy, stated that e performanc

hough project Table 5-3 wh

wind plants.

– Calvert Cliffstending to 2037

sters is a forwwind assets, PJ

average of unthey would b

ce of similar teowners can b

hich compare

s node, showing7

ward looking cJM will allownforced capacbe willing to pechnology dubid a higher ves actual capa

g monthly wind

capacity prodw project owncity into the aparticipate iniuring system pvalue, the initiacity factors f

energy valuatio

duct (at auctioners to offer 1auction. Mostitially at the 1peak demandial level is a

for several ear

on

on) to 3%

t 13% d that

rly

Table 5-3. M

Pricing fonear term requiremeDeliverabmaximumFor this stclearing p Forward foutlying ppricing wslowly. Capacity basis. Medensity atfor energydifferencethe four se

Projects:AveraginJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember

Annual AOver

Notes:

4. Does not5. Hydropo6. Wind can

1. Based on2. InstallatioNational La3. No data a

Monthly Avera

or capacity is least cost ma

ents of some gbility Areas (Lm limit on the tudy, for the P

price was used

forecasted LDprices. Since cas escalated a

factors for sitasured wind dt ridgeline sitey production ees for day andeasons.

Sng Period: 20

r

rr

Avergae Period

t account for banwer can be used n be used as sup

n 5 to 8 year old tons in 2007 avaerab - US 2008 Markavailable from ne

Color Deno

ge Capacity Fa

the basis usedanner while regenerating unLDAs) with eaamount of ca

PJM forward d.

DA prices wercapacity priciat 1% per yea

tes in each of data were adje), and for amestimates for d night times w

Somerset M002-2008 2

38%34%32%28%21%14%13%10%14%23%32%42%

25%

nking of wind eneas supplement dplement during d

urbine technolograge capacity facket Reportwer Mid-Atlantic

otes Summer M

ctors

d by PJM to pecognizing lonits. Locationaach LDA hav

apacity that it pricing meth

re extrapolateing is only inc

ar. This rate is

the four markusted to hub h

mbient tempereach of the fowere used to

Mill Run M002-2008 2

44%40%37%35%25%28%13%12%18%27%35%44%

29%

ergy during low wind pdrought periods

PJM Capacity

gy - New machinector was 35%; ran

c plants built in 2

onths Peak Cap

procure a targcational consal constraints

ving a separatcan import frod, a 13% na

ed using histocremental to ts low, because

ket areas wereheight (100 m

rature. These our 100 MW develop capa

ountaineer2003-2008 2

41%41%36%33%23%18%16%12%19%29%36%43%

29%

periods

Value for Wind

es average nge 26% to 40%,

2008

pacity Factor

get capacity restraints and ms are establishte target capacrom resources

ame plate capa

orical clearingtotal project re utilities repl

e calculated om), compensaseasonal capaplant location

acity factors f

Waymart2004-2008

38%40%36%30%22%18%14%14%18%30%32%37%

27%

d and Solar

some mos. to 55%

eserve level fminimum “muhed by settingcity reserve les located outsacity times th

g prices, elimirevenue, to simlace plant and

on both a seasated for altitudacity factors sns. Diurnal wfor on-peak /o

PJM

Peak

%; based on Law

for the RTO inust-run”

up Locationaevel and a side of the LDhe LDA mark

inating signifimplify, capacd equipment

sonal and a dide (e.g., loweserved as the

wind pattern off-peak as we

17%14%

12%-14%uses 13% for

k Summer CapValues

wrence Berkeley

33

n a

al

DA. et

ficant city

iurnal r air basis

ell as

r Wind

pacity

34

5.1.4 P Ancillary Results wvalues for

• Cpe

• Tprpl

• Afo

• Cprpeat

These annthat are difactors aredifferent i Due to theprice advalimiting fa The price per MWhTable 5-1evaluating

Barrierwind ma Mitigatcommit

Pricing Summ

service valuewere combinedr each node. F

Capacity factoeak),

Total wind plaroduce revenulant,

All on/off peakorecasted ener

Capacity revenroducing totaeak, seasonal t each locatio

nual energy priscussed in See included in injection poin

e value differantage over Factor, althoug

differential ih difference be1 (as $11.74 –g project econ

r – Transmissarket penetrat

tion Options to build the l

mary

es and in-pland to provide cFactors includ

rs were used

ant energy proue from seaso

k values per srgy productio

nues were theal anticipated r

and wind patn.

roduction estiections 6 anddetermining p

nts are very im

ence alone it Fentress. Howgh moving po

s even more detween DPL a– 10.39). It is nomic barrier

ion line capaction increases

– The approaline to the pro

nt parasitic loscomprehensivded were that:

to develop to

oduction was onal energy p

seasons were on at each loc

n added to threvenue for etterns to prod

imates and prd Section 7 ofproject econo

mportant.

appears that twever Delmarvower in a west

dramatic wheand Cloverdaimportant to s as will be d

city is not a bs, leading to h

ach used in Euojects with co

sses are quiteve approach to:

otal energy pro

multiplied byroduction for

summed to pration,

he total annualeach location, duce an indica

rices were thef this report. Inomic viability

the Delmarvava transmissiotward directio

en comparing ale nodes durikeep in mindiscussed in S

barrier for inithigher costs.

urope and in ssts being shar

e small and wo developing

oduction for e

y applicable sr each set of tu

roduce a total

l revenue stretaking into a

atively expect

en input to then the econom

y. However th

a coastal siteson line capacon is helpful i

coastal to riding the summd there are othection 6 and

tial projects, b

some states inred by the gri

ere ignored foindicative for

each season (

seasonal on/ofurbines comp

l annual reven

eam for energaccount the efted market va

e energy projemic analysis ofhe pricing diff

s and offshorecity will quickin reducing co

dgeline sites. Tmer on-peak peher factors to cSection 7 of

but can becom

n the U.S. is tid system.

for this study.rward market

(both on peak

ff peak curve prising a 100 M

nue stream fo

gy productionffects of on/ofalue of electric

ect finance mf projects, maferentials betw

e would have kly become a ongestion.

There is a $22eriods, as shoconsider in this report.

me a barrier a

to clearly

t

k/off

to MW

or

ff city

models any ween

a

2.13 own in

s

TTable 5-4. Energy PProduction Estimatees and Capacity Facttors (assume 100m hhub height)

35

6.0 ProAnalysi One of thewind enerproforma Class 4, thFinance bwhich tenterms. As Carolina, regime at Across theRidgelinecontinenta As is wella project lconstruct,added cossteady as the Mid-A This secti

6.1 M6.2 E

lo6.3 E

in6.4 F

6.1 Meth The readeMethodolinputs, assforward pinclude peassumptio

oject Econos and Wha

e questions torgy developmfinancial ana

hat is owned abasis. Two typnds to involve

discussed preand the Distrthe location a

e Mid-Atlantie (mountainoual shelf).

l known, windlife running 2, the wind regst. Another opfor Ocean, bu

Atlantic region

on will discu

Methodology, Economic Anaocated in the M

Economics Ann the Mid-Atlindings and C

hodology,

er is encouraglogy, Plant Casumptions, an

pricing revenuerformance (pons.

omic Resulat they Mea

o be addressedment in the Mialysis. We assand financed pes of financin non-investmeviously, the rict of Columband equipmen

ic region, fouus land), Shelt

d energy plan25 years or longime in the moption is Shelteut where consn of the Unite

ss:

Cost and Peralysis ResultsMid-Atlantic nalysis Resultantic region (

Comments.

Cost and

ged to review apital Costs, Ond methodoloue forecasts, pplant capacity

lts and Conan

d in this studyid-Atlantic Stumed a 100 Mby an Indepeng are examin

ment-grade-ratMid-Atlanticbia. The specnt type.

ur classificatiotered Water (

nts are capitalnger. While Rountains and ered Water plstruction costsed States, is th

rformance Est, under Curreregion (in 20

ts, under Favo(in 2013 dolla

Performan

Section 7, “POperating Expogy for the casplant capital cy factor) estim

nclusions -

y was whetheates. To addrMW wind farendent Power ned – the currted debt, and fc region incluific plant cap

ons of wind fa(shallow bays

intensive to bRidge Line anfar offshore i

lants, where ths are lower. The purpose of

timates, and Fent, Likely Fin013 dollars); orable Financars); and

nce Estima

Project Econopenses, and Fsh flow mode

costs, and soumates, projecte

- Financial

er economic isress this questrm, utilizing mProducer (IP

rent strong stfavorable fina

udes Delawarepacity factor w

arm were studs and sounds),

build, but thend Ocean planis stronger anhe wind regim

To investigatef this report.

Financial Assnancing, for 2

ing, for 2012

ates, and F

omic Inputs anFinancial Assueling. The mources of projeced operating e

Results of

ssues would btion, the authomeasured winPP) on a limiteandard, as of ancing, whiche, Maryland, Vwill be adjuste

died. These ar, and Ocean (

en operate witnts are more end steady, whime may be nee these trade-o

sumptions; 2012 Wind En

2 Wind Energy

inancial As

nd Assumptioumptions.” Se

odel inputs incct funds (debtexpenses, and

f the Cash F

be a barrier toors performed

nds in the ranged recourse P

f first-half 201h assumes betVirginia, Nored based on w

re: Coastal Pl(offshore on

th “free fuel,”expensive to ich may offseearly as strongoffs and effec

nergy Plants,

y Plants, loca

ssumption

ons – Financiection 7 sets clude PJM t and equity).d financial

37

Flow

o d ge of

Project 12, tter rth wind

lains,

” over

et the g and cts, in

ated

ns

al forth

They

38

6.1.1 F By way o“Calculateequity andadequate a By the secand debt rthe pro foto market As is wellTransmissmethod, twgiven receEPA Utilimany exis 6.1.2 F Wind specapital colocations prepare fo The four pare:

1. D

2. C

3. C

4. F

6.1.3 A Cash floware assummarket at sites with As discuspurchase astrong, es When theby (have rinvestors from the d

Forward Prici

f summary, twed COE.” Byd debt returnsand either pro

cond method,returns are en

orma 25-year rprices, and w

l known, PJMsion Organizawo sets of forent fuel and pity MACT (Msting coal pow

Four Wind Ma

eds were measts and operawere matched

our sets of PJM

proposed plan

DPL-ODEC, C

Cloverdale, Ri

Calvert Cliffs,

entress, Ocea

A Merchant P

w analysis wasmed to sell pow

rates that flucstrong deman

sed with Sectagreement (Ptablished dev

y are financerecourse to) oseek assurancdeveloper. Fo

ing vs. Calcu

wo types of fiy the first meths, as after-tax oceeds, revam

, a Calculatedntered into therevenue strea

will proceed, r

M refers to theation (RTO) frward prices wpower forecasMaximum Achwer plants, as

arket Segme

asured and proating expensesd against PJMM forward pr

nts, located cl

Coastal Plains

idgeline;

Shallow Wat

an.

Power Finan

s performed fwer on a mercctuate. The dend and high p

tion 7.7, selliPPA). Accordivelopers.

d by limited ronly the projece they will bor a merchant

ulated COE

financial analyhod, PJM forwIRR and deb

mps, or rejects

d Cost of Enere cash flow mam that is necerevamp, or rej

e Penn-Jersey-for the Mid-Awere preparedts [19], and ahievable Cont discussed in

ents and Fou

oposed 100 Ms projected, fo

M nodes; compricing schedul

lose to PJM n

s;

ter Bay; and

cial Case wi

for each of thechant basis, meveloper will prices.

ng merchant ingly, some m

recourse project and not the

be repaid, by eplant utilizin

ysis were perfward power pt coverage. Ts the proposed

rgy (COE) is model as const

essary. The pject the propo

-Maryland InAtlantic Statesd: 2.5% escala high case, tetrol TechnoloSection 5.

ur Plants

MW wind eneor each of theprising substales.

nodes are map

ith BB-Rated

e four plants, meaning powe

investigate p

power is riskimerchant plan

ect finance, we developer’s evidence of a

ng limited reco

formed – termprices are fore

The project ded project.

figured, aftertraints, so the project develoosed project.

nterconnections and certain nlation, which ermed “2015 Aogy) standards

ergy power ple four wind mations, aggreg

pped in Sectio

d Debt.

assuming a 2er is sold on thprojected dem

kier than sellinnts are finance

where debt another assets, well-structur

ourse project

med “Forwardecast, so the m

eveloper decid

r reasonably amodel calcul

oper compares

n, which is thnearby areas. is a conservaAdder Prices,s are impleme

lants were bromarket segmengate locations

on 5, with Fig

25-year projeche competitiv

mand for powe

ng under a loned “on balanc

d equity invethe merchant

red project anfinance, in to

d Pricing” andmodel calculades if returns

attractive equlates and outps the plant’s C

he Regional Under the fir

ative estimate ,” which assuented, affectin

oadly definednts. These s, and other; t

gure 5.3. The

ct life. The plve wholesale er, looking fo

ng-term powece sheet” by

estors are secut power plant

nd by guaranteoday’s market

d ates are

uity puts COE

rst

umes ng

d with

to

ey

lants

r

er

ured ’s ees t

(first half investmen 6.1.4 5 Because downership By curren50% debt because mAcceleratis assumecan fully uand used tBB-rated estimated If a compchanges infraction minvestors modeling to examinrisk, IRR debt cove Conseque50% BB-rThey are 2with impr 6.1.5 F Cost of Enor other pSection 7future pric The two ocalculatedfigures thlevelizes tdiscount rrate, it proor nominanecessarythen defla

2012), currennt-grade.

0% Debt Fra

debt coveragep, the debt fra

nt, likely finanto 50% equit

most of the eqed Cost Recod the developutilize the proto assist with debt, with coas 3.0 times

lex ownershipn allocations

might be set hitake both casproject cash

ne a project wwould increarage limits se

ently, current rated, 20-year22% for Bay,roved debt ter

Financial Figu

nergy (COE),project finance.1.4. Year onces will be es

other measured based upon e Net Presentthe NPV into rate, it producoduces a levelal debt is repa

y to inflate andate these reven

nt, likely debt

action

e is the limitinaction is limit

ncing, the capty. Because th

quipment is deovery System)per seeks to fioject’s tax bendebt repayme

overage calculaverage and 1

p-financing stof cash and taigher. Howevh and tax benflows. The de

with 70% debtase significantet by lenders.

(first half 201r debt at 7.5%, and 25% forrms, is describ

ures of Meri

, debt coverage or business e COE is a si

scalated or oth

es are levelizethe project’s t Value (NPVone level pay

ces a levelizedlized constanaid and incomd figure the nnues.

t is unlikely to

ng or tight conted to 50%.

pital fraction ohe 10-year Seepreciated as ), the projectsind outside eqnefits. The PTent over the flated as annua1.8 times min

tructure, withax benefits ovver, for a “planefits, debt coebt fraction m, for exampletly, but the de

12), likely IPP% to 50% equir Ocean, reflebed later, with

t to Evaluate

ge, and IRR aopportunity. mple measureherwise calcu

ed nominal-donominal reve

V) of revenuesyment per yead nominal-dot-dollar COE

me tax is calcunominal reven

o be rated hig

nstraint, unde

of the project ection 45 Prodfive-year pro

s show signifiquity investorTC is assumedfirst ten years al operating in

nimum.

h Tax Investorver time to diain vanilla” owoverage becommust be set at e, assuming ineveloper woul

P project finaity. Target eqcting greater h Section 6.3

e a Project

are important That three mee; it is the pro

ulated.

ollar COE andenue stream ovs using the noar. If levelizatllar COE. If p, which exclu

ulated as a pernues that cove

gher than BB,

er conservativ

was estimateduction Tax Coperty (under icant tax beners, who are in d to be “monof project lifncome over t

rs and “flips”fferent ownerwnership strumes the limiti50% of total

nterest rates dld need a high

ance of the 10quity returns arisk. The fav

3.

measures in eeasures of COoject’s bid pri

d levelized cover its 25 yea

ominal-dollartion is performperformed usiudes inflationrcentage of no

er project expe

, which is one

ve, “plain van

ed at a conserCredit (PTC) iMACRS, the

efits as well aa positive ea

netized,” or cofe. Limits for the annual deb

” were assumership classes,

ucture, where ing or tight cocapital. If the

did not rise duher revenue s

00 MW wind pare 17% for laorable financ

evaluating a wOE are preparice for its firs

onstant-dollarar life, where r discount ratemed using theing the consta. When controminal profitenses, costs a

e level below

nilla” financin

rvative ratio ois utilized, an

e Modified as a cash returarnings mode onverted to cadebt coveragbt payment, a

ed, where flipthen the debtthe equity

onstraint in e developer wue to increasedstream to mee

projects assumand-based placing set of cas

wind energy pred is describest year, from w

r COE. Thesethe analyst fie and then e nominal ant-dollar disactually-spects, then it is and returns an

39

ng-

of nd

rn. It and

ash ge for are

ps are t

wished d

et the

mes ants. ses,

plant ed in which

e are irst

count cified

nd to

40

Debt coveincome agminimum IRR (Interflows to ethe preseninvestmenallows pro Other meathe projectax cash fdisadvantBy contra The otherinvestmenwhether thmeasure p 6.2 Econ

Wind Results oflikely finapresented performedwith 2015outputs deassumed acalculated 6.2.1 D As shownPJM forw$0.0540 pdeveloperdisappoinbelow the For the sethe year oCOE is $0below targ For the thaverage anwhich beafall slightl

erage and IRRgainst the ann

m (worst year)

rnal Rate of Requity investont value of thent. IRR is the ojects of diffe

asures to evalct, by the weigflows less initage of IRR is

ast, the NPV c

r measure of pnt is paid backhe later yearsprovides a qui

nomic Analyd Energy Pl

f cash flow mancing at 50%below, with

d, including 15 Adder Priceebt coverage as given paramd the project’s

DPL-ODEC C

n, cases 1-3 coward pricing atper kWh, nomr sees that debnting because e target of 17%

econd case, wone COE is $00.0611. Debt get. IRR is be

hird case, whicnd 2.21 timesats the 17% taly below targ

R are discussenual debt paym.

Return) is calcors, over all the stream of afrate where N

erent sizes to

luate a projecghted averageial equity inv

s that it assumcalculation as

project value ik by the proje of project retick means to

ysis Resultslants

modeling for a% debt to 50%

Table 6-1. Fo1) PJM Forwas; and 3) Calcand the after-meters into ths COE.

Coastal Plains

oncern the DPt 2.5%, reven

minal levelizedbt coverage isthey are belo

%.

with PJM forw0.0559 per kWcoverage is b

etter at 15.72%

ch is Calculats minimum, warget. If cash

get.

ed fully in Secment (interest

culated by cohe years of profter-tax cash

NPV (describebe compared

ct also may bee cost of capitvestment. Projmes all cash flo

sumes cash fl

is payback, wect’s after-taxturn are fat orlearn when h

s, under Cur

all four wind e% equity, inclu

or each of theard Pricing at culated COE.-tax IRR. For he model, so t

s

PL-ODEC Conues are givend COE is $0.0s 2.18 times aw the targets

ward pricing uWh, nominal lbetter, at 2.69%, but this rem

ted COE, debwhich meet thflows were ru

ction 7. Debtt plus principa

nsidering theoject life. IRRflows equals

ed below) bec.

e considered. tal, Net Presejects with a pows are reinv

flows are reinv

which measurex cash flows. Pr lean. Nonethe or she will r

rrent, Likel

energy plants,uding BB-ratee four plants, conservative

. For the first the third case

the model out

oastal Plains Wn, but it is inte0661, and converage and 1.of 3.0 times a

using 2015 Adlevelized COEtimes averag

mains below

bt coverage is he targets of 3un to achieve

t coverage comal). One calcu

e after-tax casR is defined athe present v

comes zero. A

After discounent Value is thositive NPV a

vested at the Ivested at the c

es the numberPayback ignoheless, for therecover the in

ly Financing

, selling merced, 20-year dethree sets of f

e 2.5% escalattwo cases, re

e, attractive dtputs a revenu

Wind Energy eresting to nonstant-dollar l.70 times minand 1.8 times

dder prices, reE is $0.0786,

ge and 1.79 tim17%.

the tight con.0 times and 17% IRR exa

mpares each yulates the ave

sh flow of the as that discounvalue of the inAs a simple pe

nting the afterhe discountedare attractiveIRR rate, whiccost of capita

r of years untores time value risk-adversenitial investm

g, for Mid-A

chant power; ebt at a 7.50%financial analtion; 2) PJM evenues are gidebt coverageue stream, fro

Plant. For thote that year olevelized COEnimum, whichs. IRR is 12.4

evenues again and constantmes minimum

nstraint, and it1.8 times. IRRactly, then de

year’s operatierage ratio and

project, whicnt rate at whi

nitial equity ercentage, IRR

r-tax cash flod sum of the a. One ch may be hig

al discount rat

til initial equiue of money ae investor, thi

ment.

Atlantic

under current% interest ratelysis were Forward Pric

iven, so the m and IRR are

om which is

he first case, wone COE is E is $0.0513.h are a bit 48%, which is

n are given. Ht-dollar levelim, but these re

t is 3.00 timesR is 18.42%,

ebt coverage w

ing d the

ch ch

R

ws of after-

gh. te.

ity and is

t, e; are

cing model

with

The

s

Here, ized emain

s

would

The COEis $0.0859with 2015higher tha 6.2.2 C For the ClPJM forwprices for and constminimumbelow the For the seare given.levelized minimum For the th3.02 timesto surpassThe year oCOE is $0 All three Cfor Coastathe PJM fover 2.5 ccalculated1.0 cent h Nearby, itturbines aby Synergpower purMW Roth(Newark, Universitywas sold tGestamp

s are the key 9, which is ab5 Adder Pricean PJM prices

Cloverdale Rid

loverdale Ridward pricing at

Cloverdale aant-dollar lev

m, which are be target of 17%

econd case, w. The year oneCOE is $0.04

m, but these are

hird case, cases average ands the 17% targone COE is $0.0577 per kW

Cloverdale Ral Plains. Howforward pricescents higher thd constant-dolhigher than PJ

t is noted thatand is located gics and starterchasers, whoh Rock plant sDE) and 10 M

y system, undto Gestamp W[21], and its t

points of intebout 2.0 centss. The constas at 2.5% and

dgeline

dgeline Wind t 2.5% and re

are low. The yvelized COE ielow the BB-

%.

which is case 5e COE is $0.0455. Debt cove below targe

e 6, which is Cd 2.29 times mget for land-b$0.0629 per kWWh.

Ridgeline COEwever, markes with cases 4han PJM pricllar levelized JM 2015 Add

t the 50 MW Ron the ridgel

ed up in Deceo pay higher psells 40 MW pMW power toder the GeneraWind North Atax equity sha

erest. The yeas higher than fant-dollar leve

0.6 cent high

Energy Plantevenues givenyear one COEis $0.0368. D-rated debt tar

5, with PJM fo0375 per kWhverage improvet. IRR is bett

Calculated COminimum, whased wind enWh. Nominal

Es, when calct prices at Clo

4 and 5. The ces at 2.5% anCOE at US$0er Prices.

Roth Rock wine in Garrett

ember 2010 [2prices. That ispower and re

o Maryland’s ating Clean H

America, a busare was sold t

ar one COE isfor PJM forwelized COE isher than PJM

t, results are pn, COEs mighE is $0.0367 pebt coverage rgets of 3.0 ti

forward pricinh, nominal levves because itter at 14.02%,

OE, debt covehich meet the tnergy plants. Fl levelized CO

ulated, are aboverdale, neacalculated nomnd 1.5 cents hi0.0577 is 2.0

ind energy plt County Mar20], transmitss, under two 2newable enerDepartment o

Horizons progsiness subsidio US Bancorp

s $0.0739 per ward pricing ats $0.0667 per with 2015 Ad

presented withht be considerper kWh, nomis 1.86 times

imes and 1.8 t

ng using 2015velized COE t is 2.39 times, but it is still

erage is the titargets of 3.0For CalculateOE is $0.0743

bout 1.0 cent lar Roanoke Viminal levelizeigher than PJcents higher

lant, which feryland, whichs and sells mu20-year Powergy credits to of General Se

gram [21,22]. iary of the larp [23].

kWh. Nomint 2.5% and 0.

r kWh, which dder Prices.

h cases 4-6. Fred low. The P

minal levelizeds average and times. IRR is

5 Adder priceis $0.0585, as average andl below 17%.

ight constrain0 and 1.8 timed COE, the C3, and constan

lower than thirginia, are loed COE at US

JM with 2015than PJM pri

eatures 20 Noh was financeduch of its power Purchase ADelmarva Po

ervices and thIn 2011, the

rge Spanish in

nal levelized C.7 cent higheris about 1.6 c

For case 4, wiPJM forward d COE is $0.01.42 times 10.33%, whi

s, revenues agand constant-dd 1.55 times

nt. Debt coveres. IRR is 19.6COEs are critint-dollar leve

he calculated Cow, as revealeS$0.0743 is ju Adder Pricesices at 2.5% a

ordex 2.5 MWd and develop

wer to more diAgreements, thower & Light he Maryland SRoth Rock pl

ndustrial comp

41

COE r than cent

ith

0473,

ich is

gain dollar

rage is 69%, ical. elized

COEs ed by ust s. The and

W ped istant he 50

State lant

mpany

4

Tf

42

Table 6-1. Cash Flowfor 2012 Mid-Atlant

Ownershi

1 DPL-ODEC

2 DPL-ODEC

3 DPL-ODEC

4 Cloverdale R

5 Cloverdale R

6 Cloverdale R

w Analysis Results ftic 100 MW Wind E

ip/Financing Struct

C Coastal Plains - PJMCOE & Debt Cov

IRRNPV a

Payback (yC Coastal Plains – PJM

COE & Debt CovIRR

NPV aPayback (y

C Coastal Plains – COCOE & Debt Cov

IRRNPV a

Payback (yRidge Line - PJM Fo

COE & Debt CovIRR

NPV aPayback (y

Ridge Line - PJM FoCOE & Debt Cov

IRRNPV a

Payback (yRidge Line - COEs c

COE & Debt CovIRR

NPV aPayback (y

for Current Likely FEnergy Plants (in 20

ure COE as Y

One Pr(US$/kW

M Forward Pricing aterage 0.0R (%) at 9% years) M Forward Pricing uerage 0.0R (%) at 9% years) OEs calculated to meeerage 0.0R (%) at 9% years) orward Pricing at 2.5%erage 0.0R (%) at 9% years) orward Pricing using erage 0.0R (%) at 9% years) calculated to meet tarerage 0.0R (%) at 9% years)

Financing 13 dollars)

Year rice Wh)

Nominal Cover contr

life (US$/kW

t 2.5% increase per y0540 0.06

using 2015 Adder Pri0559 0.07

et target IRR and deb0739 0.08

% increase per year; 0367 0.04

2015 Adder Prices; 50375 0.05

rget IRR and debt cov0629 0.07

OE act

Wh)

Constant dollCOE over

contract life(US$/kWh)

year; 50% debt/50% e661 0.0513

ces; 50% debt/50% e786 0.0611

bt coverage; 50% deb859 0.0667

50% debt/50% equity473 0.0368

50% debt/50% equity585 0.0455

verage; 50% debt/50%743 0.0577

lar

e )

Average Debt Coverage

(times). Target3.0 X

equity 3 2.18

equity 1 2.69

bt/50% equity 7 3.00

y 8 1.86

y 5 2.39

% equity 7 3.02

t

Minimum Debt Coverage (times)

Target 1.80 X

1.70

1.79

2.21

1.42

1.55

2.29

. After-tax, leveraTargets: 17.0% l

22% Bay, 25% O

12.4$13.899

15.7$30.251

18.4$41.000

10.3$5.167

14.0$22.577

19.6$48.967

aged. land,

Ocean.

Pre-tax,unleverag

48% 4.49 mil ($57.783 m

5

72% 6.7 mil ($30.530 m

5

42% 8.00 mil ($12.606 m

4

33% 2.2mil ($86.651 m

6

02% 4.97 mil ($57.634 m

5

69% 8.07 mil ($13.586 m

4

, ed

7% mil)

17

7%

mil) 13

5%

mil) 12

9%

mil) 20

2%

mil) 16

4%

mil) 12

Ownershi

7 Calvert Clif

8 Calvert Clif

9 Calvert Cli

10 Fentress Oc

11 Fentress Oc

12 Fentress Oc

ip/Financing Struct

ffs Shallow Bay - PJM

COE & Debt CovIRR

NPV a

Payback (yffs Shallow Bay - PJM

COE & Debt CovIRR

NPV aPayback (y

ffs Shallow Bay - CCOE & Debt Cove

IRRNPV a

Payback (ycean - PJM Forward

COE & Debt CoveIRR

NPV aPayback (y

cean - PJM ForwardCOE & Debt Cove

IRRNPV a

Payback (ycean - COEs calcula

COE & Debt CoveIRR

NPV aPayback (y

ure COE as Y

One Pr(US$/kW

M Forward Pricing at

erage 0.0R (%)

at 9%

years) M Forward Pricing userage 0.0R (%) at 9% years)

COEs calculated to merage 0.1

R (%) at 9% years) d Pricing at 2.5% incerage 0.0

R (%) at 9% years) d Pricing using 2015erage 0.0

R (%) at 9% years) ated to meet target IRerage 0.1

R (%) at 9% years)

Year rice Wh)

Nominal Cover contr

life (US$/kW

t 2.5% increase per y

0531 0.06

sing 2015 Adder Pric0546 0.07

meet target IRR and 1004 0.11

crease per year; 50%0472 0.05

5 Adder Prices; 50%0479 0.06

RR and debt covera1821 0.21

OE act

Wh)

Constant dollCOE over

contract life(US$/kWh)

year; 50% debt/50% e

659 0.0512

ces; 50% debt/50% eq784 0.0609

debt coverage; 50%67 0.0907

% debt/50% equity 79 0.0450

% debt/50% equity 689 0.0535

age; 50% debt/50% e54 0.1674

lar

e )

Average Debt Coverage

(times). Target3.0 X

equity

2 2.00

quity 9 2.43

% debt/50% equity 7 3.70

0 1.00

5 1.26

equity 4 4.53

t

Minimum Debt Coverage (times)

Target 1.80 X

1.56

1.64

2.58

0.80

0.90

2.96

. After-tax, leveraTargets: 17.0% l

22% Bay, 25% O

10.2

$7.453

13.2$27.597

22.0$92.404

-2.9($78.608 m

1.0($60.432 m

25.0$188.060

43

aged. land,

Ocean.

Pre-tax,unleverag

29% 4.0

mil ($91.268 m

6

26% 6.07 mil ($57.694 m

5

04% 11.45

mil $50.324 m4

97% -1.76mil) ($246.308 mn/a

05% 0.30mil) ($216.015 m

24

01% 15.10

mil $198.180 m4

, ed

5%

mil)

17

8%

mil) 14

5% mil

9

6%

mil) n/a

0%

mil) 25

0% mil

7

6.2.3 C In Table 6PJM forw$0.0659, athose for Dtimes aver10.29%, w For case 8$0.0546 pAgain, the1.64 times For case 9which meminimum$0.1004 p$0.0907 pwith 2015escalation 6.2.4 F The last s10, PJM f$0.0579, aothers, exaverage anincome is negative rinitial inv Case 11, wthey still w$0.0689, atimes min For case 125.01%, wand 2.96 tCOE is $0is $0.1674and with 22.5% escagreatly ex

Calvert Cliffs

6.1, cases 7-9ward pricing at

and constant-DPL-ODEC, rage and 1.56which is signi

8, with PJM fper kWh, nomese revenues s minimum, w

9, with Calculeets the Shelte

m, which beat tper kWh, the nper kWh. The 5 Adder pricen and with 20

Fentress, Oc

et of entries iforward pricinand constant-

xcept for Clovnd 0.80 times too low for th

return means vestment, muc

with PJM forwwould be judgand constant-

nimum, which

12, the last cawhich meets ttimes minimu0.1821 per kW4 per kWh. Th2015 Adder palation and wixceed market

Shallow Bay

9 concern the t 2.5%, show

-dollar levelizfor the Coast

6 times minimificantly below

forward pricinminal levelized

are very closewhich are belo

lated COE, IRered Bay targethe targets of nominal levelnominal COE

s. The consta15 Adder Pric

ean

n Table 6.1 ang at 2.5%, th-dollar levelizverdale Ridge

minimum. Whe project to pthe equity inv

ch less make a

ward pricing ged very nega-dollar levelizh are very low

ase, with Calcthe Ocean targum, which excWh, the nominhe nominal C

prices. The coith 2015 Addprices.

y

Calvert Cliffs year one CO

zed COE is $0tal Plains case

mum, which arw the shallow

ng using 2015d COE is $0.0e to those for ow target. IRR

RR, the equityet of 22%. De

f 3.0 times andlized COE is E is 5.0 to 4.0

ant-dollar COEces.

are cases 10-1he year one Czed COE is $0line. For Fent

When debt covpay its full debvestors lose many return.

using 2015 Aative. Year onzed COE is $0w. IRR is bare

culated COE, get of 25%. Fceed the targenal levelized

COE is 15.7 toonstant-dollar der Prices. Wh

fs Shallow BaOE is $0.05310.0512. Thesee. For Calvertre low, agains

w bay target o

5 Adder price0784, and conDPL-ODECR is 13.26%,

y return, is thebt coverage id 1.8 times. R$0.1167, and0 cents higherE is 4.0 to 3.0

12, for the FenOE is $0.4720.0450. Thesetress Ocean, d

verage is less tbt payment. L

money on thei

Adder prices, sne COE is $00.0535. Debt ely positive, a

IRR, the equiFor Fentress Oets of 3.0 timeCOE is $0.21

o 14.6 cents hCOE is 12.0

hen Calculate

ay Wind Ener1 per kWh, noe prices, whict Cliffs Shallost targets of 3

of 22%.

s, revenues arnstant-dollar l. Debt coverawhich is belo

e limiting conis 3.70 times

Regarding COd the constant-r than the PJM0 cents higher

ntress Ocean 2 per kWh, noe prices, whicdebt coveragethan 1.0 times

Likewise, IRRir investment.

shows a sligh.0479 per kWcoverage is 1

at 1.05%.

ity return, is tOcean, debt coes and 1.8 tim154, and the chigher than the

to 11.0 centsd COEs are f

rgy Plant. Theominal levelizch are given, aow Bay, debt 3.0 times and

re given. Herlevelized COEage is 2.43 timow 22%.

nstraint, and iaverage and

OEs, the year -dollar leveliz

M prices at 2.r than the PJM

Wind Energyominal levelizch are given, ae is very low s, it means the

R is very low, a. They do not

ht improvemeWh, nominal le1.26 times ave

the limiting coverage is 4.5

mes. For Fentrconstant-dollae PJM prices

s higher than tfigured, the Fe

e first case, cazed COE is are very closet coverage is 21.8 times. IR

re, year one CE is $0.0609.

mes average a

it is 22.04%, 2.58 times one COE is zed COE is 5% escalation

M prices at 2.

y Plant. For czed COE is are lower thanat 1.00 times

e plant’s operaat -2.97%. A t recover their

ent in results, evelized COEerage and 0.90

onstraint. It i53 times averress, the year ar levelized Cat 2.5% escathe PJM priceentress COEs

45

ase 7,

e to 2.00

RR is

COE is

and

n and 5%

ase

n the

ating

r

but E is 0

s rage one

COE alation es at s

46

6.2.5 S The chartpricing CO

Figure 6-1.

Figure 6-2.

Summary of F

s below showOEs for each

COEs for Four

COE Results f

Findings

w the wind eneof the four pl

r Plants with Cu

for Four Plants

ergy plant COlants. Figure

urrent, Likely F

with Current, L

OEs described6-2 shows C

Financing using

Likely Financin

d above. Figualculated CO

g PJM Forward

ng using Calcul

ure 6-1 showsOE for each of

d Prices (2013 D

lated COE (201

s PJM forwarf the four plan

Dollars).

3 Dollars)

rd nts.

Figure 6-Reference3.0 times 17% land Figure 6-assumed tcents per kprices in aas shown 6.3 Eco

Ener Results ofbelow, in Purchase FavorableBBB-ratedebt repayFor this lominimum

As done ePJM Forwand 3) Caand the afparameterCOE. In reviewiare improone may r

-1, for currente to Table 6-1average and -based, 22% B

-2, for currentto be met. ForkWh and the a broad sensein Figure 6-1

nomic Anargy Plants.

f cash flow mTable 6-2. FAgreement (P

e financing, atd, 20-year deyment. As disower risk, BB

m. The target e

earlier, for eacward Pricing aalculated COEfter-tax IRR. Frs into the mo

ing cash flowved. The readrefer to Figur

t likely financ1 shows that n1.8 times worBay, or 25%

t likely financr example, foconstant-doll. However, th1.

alysis Resu.

modeling for aavorable finaPPA) at somet this point inbt at a 4.00%scussed in Sec

BB-rated debt,equity returns

ch of the fourat conservativE. For the firstFor the third c

odel, so the m

w results, methder is encourare 6-3 and Fig

cing, shows Cnone of these rst year. NoneOcean.

cing, shows Cr Cloverdale lar levelized Chey are all hig

ults, under

all four wind eancing is possewhat fixed ran time (first ha% interest rate,

ction 7, BBB, debt coveragare 17% for

r plants, threeve 2.5% escalt two cases, rcase, attractiv

model outputs

hodology is idaged to reviewgure 6-4 belo

COEs that are plants meet d

e of the plants

COEs that resuRidgeline, thCOE is 5.77 cgher than resp

r Favorable

energy plants ible when the

ates or when oalf 2012) assu, where the Se-rated debt isge targets are land-based pl

sets of financation; 2) PJM

revenues are gve debt coveraa revenue stre

dentical to thaw Table 6-2 cow.

given, as a redebt coverages meet IRR ta

ult when debthe nominal-docents. Some opective PJM w

e Financin

under favorae plants sell powners offer umes 60% debection 45 PTCs the lowest le

1.50 times avlants, 22% fo

cial analysis wM Forward Prigiven, so the mage and IRR eam, from wh

at used with Scarefully. For

esult of PJM fe requirementargets for equ

t coverage anollar levelizedof the results awholesale pric

ng, for Mid-

able financingpower under alenders stronbt to 40% equC is monetizeevel of investmverage and 1.

or Bay and 25

were performicing with 20model outputare assumed hich is calcula

Section 6.2. Hr summarized

forward pricits for lenders

uity investors

nd IRR targetsd COE is 7.43are close to mces at their no

-Atlantic W

g are set fortha long-term Pog guarantees.uity, and inclued to assist wiment-grade d.30 times % for Ocean.

med, including15 Adder Pricts debt coveraas given ated the proje

However, resuresults, howe

47

ng. of of

s are 3 market odes,

Wind

h ower udes ith

debt.

.

g 1) ces;

age

ect’s

ults ever,

4

Tf

48

Table 6-2. Cash Flowfor 2012 Mid-Atlant

Ownersh

1 DPL-ODEC

2 DPL-ODEC

3 DPL-ODEC

4 Cloverdale R

5 Cloverdale R

6 Cloverdale R

w Analysis Results Atic 100 MW Wind E

ip/Financing Struct

C Coastal Plains - PJMCOE & Debt Cov

IRRNPV

Payback (yC Coastal Plains – PJM

COE & Debt CovIRR

NPV Payback (y

C Coastal Plains – COCOE & Debt Cov

IRRNPV

Payback (yRidge Line - PJM Fo

COE & Debt CovIRR

NPV Payback (y

Ridge Line - PJM FoCOE & Debt Cov

IRRNPV

Payback (yRidge Line - COEs c

COE & Debt CovIRR

NPV Payback (y

Assuming FavorablEnergy Plants (in 20

ture COE as

One Pr($/kW

M Forward Pricing atverage 0.R (%) at 9% years) M Forward Pricing u

verage 0.R (%) at 9% years) OEs calculated to meeverage 0.R (%) at 9% years) orward Pricing at 2.5%verage 0.R (%) at 9% years) orward Pricing using verage 0.R (%) at 9% years) calculated to meet tarverage 0.R (%) at 9% years)

e Financing 13 dollars).

Year rice

Wh)

Nominal Cover contrlife ($/kW


using 2015 Adder Pri0559 0.07


% increase per year; 0367 0.04

2015 Adder Prices; 60375 0.05

rget IRR and debt cov0389 0.04

COE ract

Wh)

Constant dolCOE over

contract lif($/kWh)

year; 60% debt/40% e661 0.051

ces; 60% debt/40% e786 0.061


60% debt/40% equity473 0.036

60% debt/40% equity585 0.045

verage; 60% debt/40%451 0.035

llar r fe

Average DebtCoverage

(times). Targe1.50 X

equity 13 2.21

equity 11 2.72

bt/40% equity 50 1.93

y 68 1.89

y 55 2.41

% equity 51 1.78

t

et

Minimum DebtCoverage (times

Target 1.30 X

1.73

2.05

1.56

1.47

1.90

1.35

t s).

After-tax, levera Targets: 17.0%

22% Bay, 25Ocean.

19.6 $30.540

23.1 $46.891

17.0 $20.151

17.1 $22.483

21.0 $39.893

17.1 $19.753

aged. land,

% Pre-tax,

unleverag

61% 4.4 mil ($57.385 m

4

11% 6.8 mil ($30.133 m

4

06% 2.5 mil ($74.692 m

4

17% 2.2 mil ($86.253 m

4

09% 4.94 mil ($57.237 m

4

14% 1.24 mil ($90.740 m

4

, ed

8% mil)

16

0%

mil) 13

6%

mil) 19

9%

mil) 20

4%

mil) 16

4%

mil) 22

Ownersh

7 Calvert Clif

8 Calvert Clif

9 Calvert Clif

10 Fentress Oc

11 Fentress Oc

12 Fentress Oc

ip/Financing Struct

ffs Shallow Bay - PJMCOE & Debt Cov

IRRNPV

Payback (yffs Shallow Bay - PJM

COE & Debt CovIRR

NPV Payback (y

ffs Shallow Bay - COCOE & Debt Cov

IRRNPV

Payback (ycean - PJM Forward P

COE & Debt CovIRR

NPV Payback (y

cean - PJM Forward PCOE & Debt Cov

IRRNPV

Payback (ycean - COEs calculate

COE & Debt CovIRR

NPV Payback (y

ture COE as

One Pr($/kW

M Forward Pricing atverage 0.R (%) at 9% years) M Forward Pricing usverage 0.R (%) at 9% years)

OEs calculated to meeverage 0.R (%) at 9% years) Pricing at 2.5% increverage 0.R (%) at 9% years) Pricing using 2015 Average 0.R (%) at 9% years) ed to meet target IRRverage 0.R (%) at 9% years)

Year rice

Wh)

Nominal Cover contrlife ($/kW


sing 2015 Adder Pric0546 0.07


ase per year; 60% de0472 0.05

Adder Prices; 60% deb0479 0.06

R and debt coverage; 1319 0.15

COE ract

Wh)

Constant dolCOE over

contract lif($/kWh)

year; 60% debt/40% e659 0.051

ces; 60% debt/40% eq784 0.060


ebt/40% equity 579 0.045

bt/40% equity 689 0.053

60% debt/40% equity538 0.119

llar r fe

Average DebtCoverage

(times). Targe1.50 X

equity 12 2.03

quity 09 2.45

bt/40% equity 27 2.57

50 1.02

35 1.28

y 95 3.22

t

et

Minimum DebtCoverage (times

Target 1.30 X

1.57

1.84

1.90

0.81

1.02

2.19

t s).

After-tax, levera Targets: 17.0%

22% Bay, 25Ocean.

16.8 $32.248

20.1 $52.393

22.0 $57.713

-1.1 ($41.956 m

4.2 ($23.780 m

25.0

$121.411

49

aged. land,

% Pre-tax,

unleverag

84% 4.0 mil ($90.712 m

4

10% 6.1 mil ($57.138 m

4

09% 6.4 mil ($48.266 m

3

17% -1.7mil) ($245.466 mn/a

29% 0.3mil) ($215.173 m

18

02% 10.6 mil $26.853 m

3

, ed

6% mil)

17

0%

mil) 14

0%

mil) 13

7%

mil) n/a

0%

mil) 25

7% mil 10

50

6.3.1 S The chartshows PJMshows Ca

Figure 6-3.

Figure 6-4.

Summary of F

s below showM forward pr

alculated COE

COEs of Four

COE Results o

Findings

w the wind enericing COEs, uE, under favor

Plants with Fav

of Four Plants w

ergy plant COunder favorabrable financin

vorable Financi

with Favorable

OEs that wereble financing,ng, for each of

ing using PJM

Financing using

e presented w, for each of tf the four plan

Forward Prices

g Calculated CO

with Table 6-2the four plantnts.

s (2013 Dollars)

OE (2013 Dolla

2. Figure 6-3ts. Figure 6-4

).

ars)

4

Figure 6-Table 6-2for equitymeet debtmeet debt Both Calvhitting thecase 8, wiOcean casIRR return 6.4 Find Earlier, it fuel.” Theinsurance Virginia, Water Bayoff-shore 6.4.1 L Land-BasLikely Fin As the subplants, forThey appeCoastal Pltimes min

Barrierlikely fiinvestmtimes avare 22% Mitigatassume spread olarge grofurther. With timmore cooffshorefinancintimes avand 25%

-3, for favorab2 shows that sy investors. Spt coverage tart coverage and

vert Cliffs Shae equity targeith 2015 Addeses (cases 10 ns.

dings and C

was noted their annual opeand major mthe District oy and Ocean pwas stronger

and-Based P

ed Plants are nancing.

bsequent analr Coastal Plaiear economiclains and case

nimum and th

r – Risk premnancing, the b

ment-grade, whverage and 1.8

% and 25%

tion Option –some project

over a large group of equity

me, as developomfortable ane demonstrationg rates for deverage and 1.3%, for Bay and

ble financing,several of thespecifically, thrgets and showd IRR targets

allow Bay plat levels of 22er Prices, hasand 11) are s

Comments

hat wind energerating expen

maintenance anf Columbia, aplants were m, to produce m

Plants

Financially F

lysis showed,ins and Ridgecally feasible. es 4 and 5 fore IRR target o

iums for bothbest debt for mhich carries a 8 times minim

– Power Purchrisk, will ass

roup of buyery investors, ca

pers, power pd experiencedon projects webt, with lowe3 times minimd Ocean, will

, shows COEsse plants mee

he two DPL-Ow IRRs over 1.

ants meet deb% Bay. Case an IRR of 20everely defic

s

gy plants are cses are low, cnd overhauls.and Washingtmore expensivmore power, w

Feasible with

under favoraeline, met fina

From Table r Ridgeline mof 17%.

h debt and equmost developlong-term int

mum. For Sha

hase Agreemeist with windrs, individual an share some

purchasers andd with offshor

will be helpfuler interest ratemum, will becl decline to ne

s that are giveet debt coveraODEC Coasta17%. The two

bt coverage re7, with a 2.5

0.10%, whereient, with ver

capital-intenscomposed onl For the Mid-ton DC; it wave to build, thwhich might o

Favorable Fi

able financingancial targets 6.2, looking

meet debt cove

uity investorspers (with rareterest rate 0f allow Water B

ents, where crd energy devel

risk is reducee of the initial

d end customre wind energl, but only if tes and with tacome availablear those of la

en under PJMage requiremeal Plains caseso Cloverdale

equirements, b% price incre

e the latter is fry low debt co

sive to build, bly of O&M, la-Atlantic stateas postulated that the wind rovercome the

inancing. The

g with BBB-rfor debt coveat PJM forwa

erage targets o

s, are high. Une exceptions) 7.5% and deb

Bay and Ocea

redit-worthy, lopment. If ined. If a large l risk, initial,

mers, and debt gy plants, riskthey are locatearget debt covle. Equity targand-based pla

M forward pricents for lenders (cases 1 andRidgeline cas

but they are bease, has an IRfairly close. Boverage ration

but then operand rental feees of Marylanthat while Ridregime in the e costs.

ey “come clos

rated debt, theerage and equard pricing, caof 1.5 times a

nder current (is rated BB,

bt coverage taan plants, targ

large power nitial purchasdeveloper, teindividual ris

and equity ink is reduced. Ped in this regverage on the get returns, esants, at about

cing. Referenrs and IRR ta

d 2 in Table 6ses (cases 4 a

both a little shRR of 16.84%Both Fentress ns and very lo

rate with “freees, property tand, Delaware,dgeline, Sheltmountains an

se” with Curre

e two land-bauity rate of retases 1 and 2 faverage and 1

(first half 201one level beloargets of 3.0 get equity retu

purchasers e risk can be aming with a

sk is reduced

nvestors becoPlanned DOEion. Favorablorder of 1.5

stimated at 2217%.

51

nce to argets 6-2) and 5)

hy in % and

ow

e ax, , tered

nd

ent,

sed turn. for .3

2), ow

urns

a

me E le

2%

52

From Tabnominal-dconstant d4.50 conscent to 2 cnominal avalues (caenergy plaprices, wh If one “strinterest rapricing at come partboth comeThey are b From Tabnominal-dCOEs areODEC (caRidgelinePJM forwby 2.7 to 6.4.2 R The Ridgemountain But it enjo Under favlevelized COEs fromCOEs for local neig Under curCalculatedconstant-dat Cloverdregion. 6.4.3 S Under Favmeeting eprices, thokWh, exis

ble 6.2, lookindollar and condollar COE extant, which arcents nominaland 3.51 consases 4 and 5) bants, assuminhich is obviou

resses” the plate, then their

2015 Adder tway to meetie close to meeboth close to

ble 6.1, lookindollar and con 8.59 cents peases 1 and 2)

e COEs are 7.4ward prices for

1.5 cents nom

Ridgeline Pla

eline plant shlocation, at $

oys better per

vorable financCOE of 4.51 m both sets oRidgeline are

ghborhood of

rrent likely find COE case 6dollar COE ofdale Ridgelin

Shallow Wate

vorable Finanequity return tose with 2015sts, which is n

ng at Calculatnstant-dollar lxcludes inflatre less than thl and 0.5 centtant, in 2013 by about 0.2

ng favorable fusly attractive

ants, by assumeconomic pePrices, whiching the averageting the minthe equity ret

ng at Calculatnstant-dollar ler kWh nominby about 2 to43 cents per kr Ridgeline (c

minal and 2.1

ants Show th

hows only a m$1,600 per kWrformance, wi

cing, from Tacents per kW

of PJM forware slightly lessCloverdale R

nancing, from6 for Ridgelinf 5.77 cents pe, but they ar

er Bay Plant

ncing, the Shatargets. It is w5 Adders. Undnot insurmoun

ted COE, caslevelized COEtion. The Coaheir respectivet to 1.5 cents dollars, whiccent to 1.3 ce

financing, proe to power pur

ming current,erformance slih is higher revge 3.0 times dnimum 1.8 timturn 17% targ

ted COE, caslevelized COEnal and 6.67 co 1 cents per kkWh nominalcases 4 and 5)to 1.2 cents c

he Best Econ

modest increasW vs. $1,530 fith a capacity

able 6-2, the CWh and a const

rd pricing (at s than the pric

Ridgeline unde

m Table 6-1, rne shows a noper kWh. Thesre in the gener

ts

allow Water Bwithin 0.3 cender current likntable.

e 3 for CoastaEs that are wistal Plains COe PJM forwarconstant. Theh are less tha

ents nominal aoduce power archasers.

, likely financips some. Frovenue, case 2 debt coveragemes debt coverget, with IRRs

e 3 for CoastaEs that are cloconstant, whikWh nominall and 5.77 con), which are thconstant.

nomics

se in capital cfor overnight

y factor of 34.

Calculated COtant-dollar CO2.5% escalati

ces of 4.73 ceer PJM forwa

results are lesminal levelizse are over thral range of m

Bay plant meents per kWh okely financing

al Plains and ithin market pOEs are 5.79 rd pricing vale Ridgeline Can their respecand 0.2 cent tat COEs that a

cing, with riskom Table 6.1,

for Coastal Pe target, at 2.6rage target, as of 15.72% a

al Plains and ose to marketich exceed PJl and 1.5 to 0.nstant, in 201he lowest pric

cost over the Ccapital cost (2% vs. 28.4%

OE case 6 forOE of 3.51 cetion or with 20ents nominal aard pricing (ca

ss dramatic, bzed COE of 7.he COEs for bmarket prices

ets debt coverf meeting theg, a gap to ma

case 6 for Riprices. As discents per kW

lues (cases 1 aCOEs are 4.51ctive PJM forto 1.0 cents coare less than t

kier BB-rated, looking at P

Plains and cas69 times and 2at 1.79 times aand 14.02%.

case 6 for Rit prices. The CJM forward pr.5 cents per k3 dollars. Theces for all nod

Coastal Plains(See Table 7-4% (see Table 7

r Ridgeline shents per kWh015 Adders). and 3.68 centase 4), with c

but the trend s.43 cents per both sets of PJfor the broad

rage and “come higher set ofarket prices, o

dgeline showscussed, the

Wh nominal anand 2) by abo cents per kW

rward pricing onstant. The wthe PJM forw

d debt at a higPJM forward se 5 for Ridge2.39 times. Thand 1.55 time

dgeline showCoastal Plainricing for DP

kWh constant.ey compare todes, as in exc

s plant, due to4 and Table 77-8).

hows a nomin. These are unThe Calculat

ts constant forcase 5 higher.

still holds. ThkWh and a JM forward p

der PJM whole

mes close” tof PJM forwardof 3 to 4 cents

w

nd out 1 Wh

wind ward

gher

eline hey

es.

w ns L-. The o cess

o its 7-5).

nal nder ted r the

he

prices esale

d s per

Specificalbecause o7-4 and T Under favwith 2015average anof 1.57 anand 20.1% For Calve8.07 cents0.3 cents pCalvert C6.11 centsand 6.09 ccents per knominal a Under curmarket prtargets. Thcents per kwith 2015about 3.8 6.4.4 O The Offshunder bothper kWh n Comparedcost, partlper kW, wfactor is 3 Under favfor both psafety to mreturns arefor case 1 For Fentreand a con(cases 10 constant. Under curslightly wpayback i

lly, the Shalloof its tougher, Table 7-5). Its

vorable financ5 Adder Pricend 1.3 times m

nd 1.84 times.%.

ert Cliffs Shals per kWh andper kWh, to tliffs. Specifics constant forcents constankWh nomina

and 5.12 cents

rrent likely finrices. The PJMhe CalculatedkWh and a co

5 Adders, the and 3.0 cents

Ocean Plants

hore Ocean plh favorable finominal and

d to the other ly due to the nwhich is nearl36.2% vs. 28.4

vorable financprojects, debt meet the payme slightly neg0 and is 18 ye

ess Ocean, thstant-dollar Cand 11) by 8.These represe

rrent likely finweaker. All de

s 24 years. Th

ow Water Baywater locatio

s capacity fact

cing, from Tas, which are cminimum eas. However, th

llow Water Bd a constant-dthe COEs fromcally, the Calv

DPL-ODEC t for Calvert Cl and 1.1 cents constant (ca

nancing, fromM forward prid COE case 9 onstant-dollarprices of 7.84

s.

s

lant fails to minancing and 12 to 16.7 cen

wind energy need for massly double the 4% for Coast

cing, from Tacoverage is e

ment, and cougative for caseears for case

e Calculated COE of 11.95 .5 cents to 9.5ent a significa

nancing, fromebt coverage ihe Fentress C

y plant showson, at $2,300 ptor is 35.4% v

able 6-2, lookcases 7 and 8sily, with averhey are both s

ay, the Calcudollar COE ofm PJM forwavert Cliffs BaCoastal Plain

Cliffs Bay (cats constant, ab

ase 7).

m Table 6-1, ricing cases (cfor Shallow W

r COE of 9.074 cents nomin

meet debt covecurrent likelynts per kWh c

plants, the Osive foundatio$1,530 Coastal (see Table

able 6-2, the textremely lowuld fail to be ae 10 and only11.

COE case 12cents per kW

5 cents per kWant gap to cur

m Table 6-1, rs under 1.25 t

Calculated CO

s increased caper kW vs. $1vs. 28.4% (se

king at PJM fo, the projects rage coveragehy in meeting

ulated COE caf 6.27 cents p

ard pricing wiay COEs compns (case 2). Tase 8). The Bbove PJM pri

results for theases 7 and 8) Water Bay sh7 cents per kWnal and 6.09 c

erage and equy financing. Cconstant.

Offshore Oceanons needed intal Plains coste 7-8).

two PJM forww at about 1.0 adequate with

y 4% for case

shows a nomWh. These excWh nominal arrent market p

results for thetimes, IRRs a

OE case 12 sh

apital cost aga1,530 for ove

ee Table 7-8).

orward pricinmeet debt co

e of 2.03 and g the 22% Ba

ase 9 shows aper kWh. Theith 2015 Adde

mpare to pricesThey compare Bay prices are ices at 2.5% i

e Shallow Wa do not meet

hows a nominWh. These arecents constant

uity return tarCalculated CO

an plant showsn severe oceant (See Table

ward pricing cto 1.2 times,

h a slight shift11, at great ri

minal levelizeceed the Fentrand by 6.5 cenprices.

e Fentress Ocare no better tows a nomina

ainst the Coasernight capital.

ng with 2.5% overage target

2.45 times anay return, with

a nominal levese are very clers for DPL-Os of 7.86 cent to prices of 7only a pennyncrease, whic

ater Bay case debt coverag

nal levelized Ce over, for PJt for Calvert C

rgets by a signOEs range from

s the highest n water condi7-4 and Tabl

cases are 10 awhich leaves

ft in circumstaisk. Payback

d COE of 15.ress PJM forwnts to 7.5 cen

cean cases (cathan 1.05%, aal levelized C

stal Plains plal cost (See Ta

escalation ants of 1.5 timesnd with minimh IRRs of 16.

elized COE olose, at 0.2 ceODEC and fots nominal and7.84 cents nomy difference, ach are 6.59 ce

are not so cloe or equity reCOE of 11.67JM forward prCliffs (case 8

nificant margim 15. to 21.5

overnight capitions, at $3,3le 7-5). Its cap

and 11. As shos no margin oances. The eqis never reach

.38 cents per ward pricing Cnts per kWh

ases 10 and 11and the better COE of 21.54

53

ant, able

d s mums 8%

of ents to or d minal at 1.5 ents

ose to eturn 7 ricing ), by

in, 5 cent

pital 90 pacity

own, of quity hed

kWh COEs

1) are

cents

54

per kWh aby 11 to 1 6.4.5 F The authofour differforward pVariabilitymight be cshould invofficials a In additioenergy prithey fetchThe Calcuconstant, load centeRidgeline That said,plants in t Under favmarket proffset to tor slightlyHowever,attractive Plains plaand Tableproduces the COEs Second, socean plan(35.4%), aplants is l$2,300 vs Under favproducingnominal aby 0.3 cen2.5% pricincreases,market pr Under curon the ord

and a constan16 cents.

Final Comme

ors of this reprent wind ene

pricing curvesy to our estimconsidered “bvestigate furthand others.

n, the PJM foices, and ackn

h low off-peakulated COE ewhich approaers and associe plants.

, what do finathe Mid-Atlan

vorable financrices. Under che slightly hi

y reduced cos, even thoughCOEs that m

ant, due to its e 7-5, but withpower efficie often will be

hallow water nts. Bay planas do the offsikely to be lo

s. $3,390 for O

vorable financg power at maand 6.27 centsnts per kWh ace increase. Th, if capital cosrices increase.

rrent, likely fider of 3 to 5 c

nt-dollar COE

ents

ort used budgergy plants, los for four nodemates exists, sball park” numher, working

orward pricingnowledge thak power paymstimates assuach does not diated transmis

ancial results ntic States are

cing, both Cocurrent likely gher financiats and/or oper

h the Ridgelinmeet market pr

mountain loch an improve

ently. When pe attractive to

bay and sounts enjoy nearl

shore Ocean pwer with less

Ocean, per kW

cing, the Calvarket rates. Ws per kWh conand by 1.5 to hese increasests decline wi.

inancing, the cents. Specific

E of 16.74 cen

get pricing estocated two ones. Financing

so our equity rmbers that showith prospect

g estimates mat some Mid-Aments from a mume one capacdistinguish session cost, an

of the cash fle “about ready

astal Plains a(higher-price

al costs, such arating expense plants pay trices. With oncation, at $1,6ed capacity facpower from th

various buye

nd plants showly as good a wplants (36.2%s costly foundW-capacity.

vert Cliffs ShaWith favorable

nstant (case 91.1 cents, fors are not veryith greater ope

Calvert Cliffcally, the Bay

nts per kWh. T

timates to pron land and twog assumptionsreturn percenow a trend or tive power pu

match hourly wAtlantic windmarket that pacity factor foreasonal and timd environmen

ow analysis sy to go.”

nd Ridgeline d) financing cas a site with ses, or a powethe lowest manly a modest i600 per kW foctor of 34.2%

he Ridgeline pers.

w much bettewind regime, ), as stated in

dations than fo

allow Water Bfinancing, th

9, Table 6-2),r PJM forwardy large. They erating experi

fs Bay plant Cy COEs are 11

These greatly

oject capital co in the waters are based onntages and COr direction. Frurchasers, lan

wind plant capds blow strongays top dollarr the year andme-of-day difntal concerns

show? First, th

plants can beconditions, thstronger win

er purchaser warket prices ofincrease in caor overnight c

%, as shown inplants is sold

er financial reas shown by

n Table 7-8. Bor offshore O

Bay plant COhe Bay plant C, are only sligd pricing withmay be overc

rience and/or

COEs, exceed1.67 cents per

y exceed curre

costs and operr. We likewisn first half 201OE results arerom this basisndowners, com

apacity factorsg at night andr for summer

d one energy pfferences. Homust be addr

he land-based

e built to prodhe developer mnds and a highwho will pay f the four nodapital cost ovecapital cost, an Table 7-8, tinto PJM’s w

sults than do their high cap

But the capitaOcean. Overni

OE estimates “COEs, at 8.07ghtly above PJh 2015 Addercome if wind economies of

d market pricer kWh nomin

ent market pri

rating expense projected P12 conditions

e not exact. Ths, a developermmunity and

s against hourd during winte

day time peapayment that owever, distanressed for

d wind energy

duce power atmust look forher capacity faa small prem

des, they shower the Coastal

as seen in Tabthe Ridgeline

wholesale netw

the off-shorepacity factor

al cost of Bay ght capital co

“come close” 7 cents per kWJM market prrs and with thcapacity fact

f scale, or if

es by a greaternal and 9.07 ce

ices,

ses for PJM s. hey r state

rly er aks. holds

nce to

y

t r an factor,

mium. w l

ble 7-4 e plant work,

e

ost is

to Wh rices,

he tor

r gap, ents

per kWh cby 5 to 4 cmay be ovdecline by However,Ocean plaShallow Bfuture dev One final marginal, shortage, the trend iopportuni However,equity invreflect botlow, but itmight shorepaid, agbe cheape

constant (casecents, for PJMvercome withy learning cur

, the Fentress ants offer vastBay wind enervelopment of

note is that Pvariable costspot prices wis. For an “oldity, especially

, for the new cvestors. A capth fixed and vt will not rise

ow a long, stegainst which ser to customer

e 9, Table 6-1M forward prih time, as the trve effects an

Ocean COEst area potentiargy plants weboth Bay and

PJM must be rt, so during an

will rise. Powed, mature” sm

y as fuel price

capital-intenspital intensivevariable costse to meet spot ady, revenue

spot prices risrs in the long

1), which excicing with 20technology imd scale econo

s do not appeaal, but bridginere built, the fd Ocean plant

recognized asny period of oer plants sellinmall power plaes rise.

sive plant, have power plant . The wind enmarket highsstream that in

se and fall likerun.

ceed PJM mar15 Adders anmproves, so thomies.

ar economicang such a largfield experients.

s a spot markeoversupply orng at PJM whant, that has r

ving prices fotends to be p

nergy plant’s s. The tariff pncreases slowe waves again

rket prices, bynd with the 2.5he capacity fa

ally viable forge economic gnce gained in

et. Spot markr glut, spot prholesale pricerepaid its deb

ollow a variabpriced better u

tariff would npattern for a pwer than inflatnst a wall. Th

y 3.8 to 3.0 ce5% price incractor increase

r the foreseeabgap will be chdoing so wou

ket prices tendices will fall.

es “ride along”bt, this represe

ble path is upsunder long-ternot fall to me

profitable wintion and dips

he long, steady

ents per kWhrease. This gaes and capital

ble future. Thhallenging. Ifuld benefit the

d to reflect During a

” with whatevents a great

setting to debrm contracts weet the spot mnd energy plan

down after dey tariff patter

55

h and ap

costs

he f e

ver

bt and which

market nt ebt is

rn can

7.0 ProPlant C For the MSection 6of Class 4Project Fi2012, whibetter termCarolina, location a Across thePlains (lan(offshore As is wella project lconstruct,cost. Anoas for Oceand effect This chap

7.1 Pr

7.2 P

7.3 C

7.4 S

7.5 P

7.6 O

7.7 FP

7.1 Pow The SectiInvestmenassume limthe one prIndependebalance, amay be m Plant perfof revenu

oject EconCapital Co

Mid-Atlantic W. As discusse

4, which is owinance basis. Tich tends to inms. As discusand the Distr

and equipmen

e Mid-Atlantind), Ridge Lion continenta

l known, windlife running 2, the wind regther option isean, but wherts, in the Mid

pter will discu

roject Financ

JM Forward P

Capital Costs f

ources of Fun

erformance (P

Operating Exp

inancial Assulants.

wer Plant Pr

on 6 results wnt (DCF-ROI)mited recoursroject, not by ent Power Proas 40% to 50%

much longer, s

formance and es, operating

nomic Inpusts, Opera

Wind energy rd, the authors

wned and finaTwo types ofnvolve non-inssed, the Mid-rict of Columbnt type.

ic region, fouine (mountainal shelf).

d energy plan25 years or longime in the mos Sheltered Wre construction-Atlantic regi

uss:

e Discounted

Pricing Forec

for the Wind

nds for the W

Plant Capacit

penses for the

umptions for C

roject Disco

were obtained) analysis. Finse project finathe balance s

oducer, acting% of cost, as eo debt term is

capital cost texpenses, and

uts and Aating Exp

report, resultss assume a 10

anced by an Inf financing arenvestment-gra-Atlantic regibia. The spec

ur classificationous land), Sh

nts are capitalnger. While Rountains and

Water plants, wn cost is loweion of the Uni

d Cash Flow –

casts – Energy

Energy Plant

Wind Energy P

ty Factors) for

Wind Energy

Current, Like

ounted Cas

d by reviewingnancing and oance, where dsheets of the pg as developeequity. The prs 20 years.

to build the pld other charg

ssumptioenses, an

s of the cash f00 MW wind ndependent Poe examined –ade-rated debton includes Dific plant cap

ons of wind faheltered Wate

intensive to bRidge Line anfar offshore i

where the winer than for Ocited States, is

– Return On I

y and Capacit

s,

Plants,

r the Wind En

y Plants, and

ely and for Fa

sh Flow – R

g the projectsownership fordebt and equitproject develor, raises debt roject has a 2

lant are estimges. After-tax

ons – Finand Financ

flow analysis farm, utilizinower Produce

– the current st, and favorab

Delaware, Mapacity factor w

arm will be ster (shallow ba

build, but thend Ocean planis stronger and regime may

cean plants. Ts the purpose

Investment M

ty Payments

nergy Plants,

avorable Finan

Return on I

s using Discour each of the ty investors aroper or otherat 60% to 50

25-year contra

mated, with forcash flow is c

ncial Methial Assum

were set forthng measured wer (IPP) on a strong standarble financing,aryland, Virgiwill be adjuste

tudied. Theseays and sound

en operate witnts are more end steady, whiy be nearly as

To investigateof this report

Methodology,

ncing of the W

Investment

unted Cash F100 MW winre secured onequity invest

0% of capital act life, althou

rward projectcalculated.

hodologymptions

h in the previwinds in the rlimited recou

rd, as of first-, which assuminia, North ed based on

e are: Coastal ds), and Ocean

th “free fuel,”expensive to ich may offses strong and se these trade-ot.

Wind Energy

t Methodol

Flow – Returnnd energy plannly by assets fors. An cost and raiseugh useful life

tions for 25 y

57

,

ous range urse half

mes

n

” over

et the steady offs

logy

n on nts for

es the fe

years

58

Two methprices arecoverage.model cal 7.1.1 P As discusOrganizatStates. PJon the net For this reFigure 5.central tracentral traare derivepower, pr PJM forwso as to defour pricinpricing daforward e In order towas determthe inflatipower escwith implfrom 2013 When forwon equity developerimprove tby increaswith a betparticipan 7.1.2 C By contrareasonablstream frorate) and m

9 The US Enover the nexThe rate wa

hods of perfor forecast; so t The second ilculates the as

PJM Forward

sed, PJM is thtion (RTO) thM nodes are rtwork.

eport, four PJ3. Western H

ading hub andading hub, Weed . Prices at nices at nodes

ward prices areevelop a “basng points (e.gata from NYMnergy pricing

o best accounmined to repronary adder,

calation [19].9ementation o3 through 203

ward prices winvestment, a

r proceeds witthe project, bysing revenuestter wind regints may reject

Calculated C

ast, methodoloe return (to d

om which to fminimum deb

nergy Informatioxt 25 years (2010as 2.8% per the 2

rming cash flothe model calis where an atssociated reve

d Pricing

he Penn-Jersehat operates threpresentative

JM nodes plusHub, which is d is located viestern Hub’s nodes reflect can run high

e forecast, bassis” or differeng., Calvert CliMEX; and Qug. See Section

nt for the effecresent these riwhich is cons

9 The high casf EPA Utility

37.

were preparedas after-tax IRth the projecty reducing caps by negotiatinme. If IRR ant the project, b

OE

ogy for the caebt and equityfigure Cost ofbt coverage re

on Administratio0 – 2035), per th2011 AEO.

ow financial alculates returnttractive equitenue stream o

ey-Maryland he power gride of substatio

s PJM’s Westan aggregatioirtually near Pprices serve alocal supply a. The four nod

sed on regresntial for impaiffs vs. Weste

ualitative Anan 5 for details

cts of the poteisks by two seservative basese, termed “2

y standards, as

d and entered RR, and debt t. If IRR and dpital cost if thng with the pond debt coverbelieving that

alculated COEy investors), af Energy (COequirements,

on projects the Whe 2012 Annual E

analysis weren on equity inty return and

or Cost of Ene

Interconnectid and wholesaons, aggregate

tern Hub baseon of about 10Pittsburgh, PAas reference eand demand. des are descri

sion analysis act experienceern Hub); threlysis perform

s.

ential future iets of forwarded on recent r015 Adder Prs discussed in

into the cash coverage. If Idebt coveragehis can be donower purchas

rage are very lt project econ

E approach is and enter thisE), which meis the output

Wholesale Price IEnergy Outlook

e utilized. Thenvestment, as

adequate debergy (COE) n

ion, which is ale electric maed locations, g

e node were e00 underlyingA. As the moselectric pricesWhen there iibed in Sectio

of four yearsed between thee years of act

med on potenti

impacts to ened prices. The respected ecorices,” assumn Section 5. P

flow analysisIRR and debt e are slightly ne safely, by ser or by posslow, the deve

nomics cannot

to estimate ths data as the meets minimumof cash flow

Index for Fuel ak (AEO), early re

e first is wherafter-tax IRR

bt coverage arnecessary.

the Regional arket of the Mgenerators an

examined, as mg physical nodst liquid points against whicis congestion on 5.

s of historic hhe Western Htual Commodial impacts of

ergy pricing flower case as

onomic forecamed price escaProject analys

s, the model ccoverage loolow, the devereducing ope

sibly relocatineloper and otht be sufficient

he plant’s cosmodel’s inputm IRR require

modeling.

and Power to increlease version, d

re forward poR, and debt re assumed, s

TransmissionMid-Atlantic nd other locati

mapped withdes, is PJM’s t and PJM’s ch all other noin supplying

hourly nodal pHub and each odities futures f factors affec

for this reportssumed 2.5% asts for fuel analation associasis runs 25 ye

calculates retuok attractive, teloper looks trating charge

ng to another her project tly improved.

sts plus a ts. A revenue ements (the hu

rease by 3.1% pdated January 20

ower

o the

n

ions

odes

prices, of the

cting

t, it for

nd ated ars,

urn the to es, or site

.

urdle

er year 12.

From thisis at or bemarket pris relative It is usefusome Middifferencecalculatedthat holds 7.1.3 T Conseque7-1 belowconservatcomprisin7.7. As sh Table 7-1. A

Anal

conservat

1 Reve2.5%

2 Reve2015

3 Reveassumequit

favorable

4 Reve2.5%

5 Reve2015

6 Reveassumequit

7.1.4 T For each aare preparone, on a as inflatio

analysis, theelow market prices, then theely high, the d

ul to note that d-Atlantic wines in pricing, d COE approas constant.

Three Sets of

ently, for eachw. Furthermor

ive, current-dng 60% BBB-hown, six case

Analysis Metho

lysis Method

tive 50% debt t

enues Given, as% Escalation.

enues Given, asAdder Prices.

enue Pricing bymes attractive dy return are giv

e financing with

enues Given, as% Escalation.

enues Given, asAdder Prices.

enue Pricing bymes attractive dy return are giv

Three Measu

analysis, whered. These incunit basis, or

on or inflation

analyst compprices, the deve developer wdeveloper may

PJM forwardnds blow stronby hourly on-ach is simplifi

f Analysis pe

h of the four nre, assuming aday 50% BB-r-rated 20-yeares are examin

od per Node/Pla

to 50% equity

s PJM Forward

s PJM Forward

y Calculated COdebt coverage aven.

h 60% BBB-ra

s PJM Forward

s PJM Forward

y Calculated COdebt coverage aven.

ures of COE

ether it reflectclude year onper kWh. Be

n less one half

pares the planveloper will p

will negotiate py reject the pr

d pricing estimnger at night -peak/off-pea

fied, assuming

er Node/Plan

nodes, three sa 25-year projrated 20-year r debt at 4.0%ned for each p

ant Site

d Pricing with

d Pricing with

OE, which and after-tax

ated debt at a lo

d Pricing with

d Pricing with

OE, which and after-tax

ts PJM forware COE, which

ecause future f percent, the

nt’s COE to wproceed with tproject detailsroject.

mates match hand during w

ak rates and byg one capacity

nt Location

ets of analysiject life, two debt at 7.5%

% to 40% equiproject/plant s

Model O

After-taxCoverag

After-taxCoverag

Revenuecalculate

ower interest ra

After-taxCoverag

After-taxCoverag

Revenuecalculate

rd pricing or ah is the combrevenues ofteyear one figu

what the markthe project. Ifs and terms, a

hourly wind pwinter) against

y season (e.gy factor for th

is are performtypes of finan

% to 50% equitity. These aresite.

Output

x Equity IRR age Level.


e Stream, from ed the Project’s

ate to 40% equ



e Stream, from ed the Project’s

a calculated Cbined energy aen are projecture serves as a

ket is paying. f the COE is cas described a

plant capacityt hourly energ., summer pe

he year and on

med. These arencing are examty and favora

e described la

and Debt

and Debt

m which is s COE.

uity

and Debt

and Debt

m which is s COE.

COE, three mand capacity rted to escalatean easy rule o

If the plant’s close to a rangabove. If the C

y factors (e.g.gy prices showak). The ne energy pay

e listed in Tamined –

able financingater, with Sect

measures of COrevenues for e by a patternof thumb.

59

COE ge of COE

, that wing

yment

ble

g, tion

OE year , such

60

The otherreflect 25 heavily. Tless operaThe analynon-deducThe analyyear Sectiyears of afigured byrecording To figure year, comaverage coalternate spreferablerevenues, calculate oValue. Th If the analCOE. If aalso termeexample, 4.39% (asmakers fofuture. Note that contractuathen the avalue, fromay yieldinflation-f When runtends to bcharged toafter-tax iinvestors.process. 7.2 PJM Energy coforecasts athe Wester5.1.2. Ave

r two measureyears of proj

To figure nomating expensesyst then figurectible paymen

yst then deducion 45 Producafter-tax cash y comparing ethe average a

COE, the anambining energy

ost of capital source of powe to introducinthe analyst c

one level payhe analyst div

lyst uses a noa constant-doled a real COEif the nomina

s (1 + 0.07)/(1or setting metr

when financially-specific o

analyst must pm which to c

d a different afree taxable in

nning a cash fbalance three oo customers; 2internal rate o As new infor

M Forward

omprises the laare based on forn Hub and th

erage on-peak

es are levelizeect revenues,

minal COE, ths, interest, anes annual cashnts like princicts income taxction Tax Creare used to fieach year’s opand minimum

alyst returns ty and capacityof a tradition

wer to end cusng a mix of raalculates a Ne

yment per yeaides by annua

ominal discoular rate, exclu

E. Constant-doal discount rat1 + 0.025) – 1rics and goals

ing a power por nominal deprepare nominalculate the lenswer. The Uncome.

flow analysis,objectives. Th2) adequate d

of return (IRRrmation is dev

Pricing Fo

arger share of four years of hihree years of ac

and off-peak

ed nominal-do, but time value analyst calcd non-cash chh flows as befipal on debt ax payable andedit. This giveigure the projeperating incom

m (worst year)

to his cash floy payments. F

nal utility, becstomers, and tates reflectinget Present Va

ar over the yeaal power prod

unt rate to leveuding inflationollar levelizedte is 7.00% an1). Constant-ds and for prep

plant project oebt and paymenal inflated caevelized cons

US Internal Re

either with ahese are: 1) a debt coverageR) on investmeveloped, the c

orecasts – E

PJM wholesaistorical PJM ctual NYMEXenergy prices,

ollar COE andue of money mculates 25 yeaharges, to figufore-tax incomand any reservd adds back anes after-tax caect’s IRR (Intme against th).

ow analysis anFor his discoucause the utilithe utility’s rag different devalue. He or shars of project duced to figur

elize the nomn, is used, thed COEs are lond inflation isdollar COEs aparing R&D b

or other businent of incomeash flows, whstant-dollar Cevenue Servic

a revenue strealow Cost of E for lenders oent, composecash flows ar

Energy and

le power pricepower prices,

X data extrapo, were broken

d levelized comeans that eaars of project ure before-taxme plus depreve fund paymny tax creditsash. Against iternal Rate of

he debt payme

nd lists the prunt rate, he ority either buyate will standvelopers. Fro

he then levelizlife that is eq

re a unit COE

minal NPV, heen the analystower, becauses 2.50%, thenare useful to gbudgets, whic

ness venture ine tax (calculathich are deflatOE. Performice does not re

am given or tEnergy (COE

or other debt ied of cash andre rerun in wh

d Capacity

es. For this an, collected by holated out 25 yn out by season

onstant-dollararly years are cash flows, sx income, andeciation and a

ments, to figurs, such as wininitial equity if Return). Deent (interest p

roject’s annuar she might us wholesale p

dardize the anaom the streamzes the Net Prquivalent to thE, per kWh.

e or she calcult figures a cone they exclud

n the constant government ach look out ma

nvolves repayted on inflateted to figure aing a constanecognize cons

to calculate CE) from the reinvestors; andd tax benefits,hat tends to be

y Payment

nalysis, the PJMhour, for each

years as descrin and are set fo

r COE. They counted mor

showing revend income taxeamortization lre before-tax cnd energy’s 10investment, th

ebt coverage iplus principal)

al revenues, bse the weight

power or is analysis. This is

m of nominal resent Value, he Net Presen

lates a nominnstant-dollar

de inflation. Fdiscount rate

and industry pany years into

yment of ed nominal pra net present

nt-dollar analystant-dollar

COE, the analyevenues (tariffd 3) an attract, for equity e an iterative

s

M Forward Prh of four nodesibed in Sectionforth in Table

each re nues es. less cash. 0-he s ), and

by ted n s

to nt

nal COE,

For e is policy o the

ofits),

ysis

yst ff) tive

ricing s plus n 7-2.

Table 7-2. P

Calvert CCloverdaDPL-OPEFentress Western H

Prices maprice dataSeptembeSummer: and Sprinlowest no

Figure 7-1 A

For capaccalculate aby 365 dacapacity fthe 20% i Table 7-3. P

UnconstrMAAC (M

PJM Power Pri

Off-PeFall

Cliffs 4.ale 3.EC 4.

4.Hub 3.

ay be illustratea covers Januaer through NoJune through

ng prices, for bde prices in a

Average PJM E

city, in the PJMannual revenu

ays. Althoughfactor of 20%s raised to act

PJM Capacity P

ained RTO ZoMid-Atlantic A

ices (Cents/kWh

ak On-Peak

.42 6.34

.28 4.70

.42 6.38

.21 5.83

.97 5.60

ed as the grouary 01, 2007 tovember, Winh August Thisboth on-peak all groups.

Energy Prices b

M forward prues, one mult

h the current f for the first ttual.

Payments

ne Area Council)

h) by Season an

k Off-Peak Winter

4 5.600 4.298 5.523 5.340 4.92

up of node prithrough Marc

nter: Decembe chart shows and off-peak

by Season

ricing forecasttiplies the payfactor is 13%,two years. If t

StraightEscala

($/MW-

nd by Node

On-Peak

6.66 5.36 6.96 6.18 6.06

ices by each och 24, 2011. Ter through Febthat PJM’s su

k, are low. In a

ts, prices are yment ($/MW it was assumthe plant prov

2.5% ation -day)

60.00175.00

Off-Peak OSpring

4.53 3.29 4.61 4.30 4.10

of four seasonThe seasons abruary, Sprinummer on-peaddition, Clov

estimated as W-day) by planmed that PJM ves it has a be

2015 Adder($/MW-d

On-Peak OffSum

6.33 5.05 6.54 5.85 5.89

ns, as shown are defined asng: March throak prices are verdale Ridge

shown belownt capacity bywould estima

etter capacity

r Prices day)

90.00 240.00

f-Peak On-Pmmer

5.67 3.46 5.44 5.47 4.73

in Figure 7-1 Autumn: ough May, anhighest. Autueline prices ar

w, in Table 7-y capacity facate a wind enefactor over ti

61

Peak

8.43 6.35 8.56 8.07 7.38

1. The

nd umn re the

-3. To ctor ergy ime,

62

The UncoFentress. establisheElectric CUtilities. Tplant slow By contraa rate of 1assumptio 7.3 Cap Wind powset forth bselected, sturbines w For the Coto the sitePrimer repplants, capwith indu The largemaintenanturbine is

Figure 7-2.

onstrained RTThe MAAC a

ed in 1994. PJCompany, MeThe escalation

wly, over man

ast, for the “C1.0% per yearon of 20% for

ital Costs

wer plant equibelow. For lanso total plant were selected,

oastal Plains e, but are simiport [24]. Baspital costs westry and gove

st difference bnce. Sea baseto be located

Offshore wind

TO (Regional areas are DPLJM states the tropolitan Edn rate for cap

ny years.

alculated COr, is used for ar the first two

for the Win

ipment and sund-based projsize is 100.5

, so total plan

plant, plant ailar to those useline costs were estimated ernment sourc

between landd tower found

d, as shown in

turbine platfor

TransmissionL-ODEC and MAAC regio

dison Companpacity is estim

OE” cases, oneall cases. The years.

nd Energy

upport facilityects, on CoasMW. For wa

nt size is 100.0

nd equipmentused by DOE were updated f

by an experieces.

d and sea basedation design

n Figure 7.2.

rm designs for s

n OrganizatioCalvert Cliff

on includes thny, Pennsylva

mated at a rate

e capacity payactual annua

Plants

y constructionstal Plains andater-based proj0 MW.

t costs and buand NREL, afor inflation aenced enginee

ed projects is ns differ accor

shallow bays an

on) areas are Wfs. MAAC is the transmissioania Electric Ce of 1% per ye

yment of $16al capacity fac

n and installatd on Ridgelin

ojects, in Bays

usiness conditas set forth in and converteder after review

attributed to trding to the d

nd ocean applic

Western Hub,the Mid-Atlan

on zones of BaCompany, andear, because u

5.00 per MWctor is used, w

tion costs usenes, 1.5 MW ts and Ocean,

tions were upNREL’s Janu

d to 2012 dollwing the litera

the cost of foepth of water

cations.

, Cloverdale, ntic Area Coualtimore Gas d PPL Electriutilities replac

W-day, escalatiwith no reduce

ed in this studturbines were5 MW wind

pdated and revuary 2008 COlars. For the oature and talk

undations andr in which the

and uncil, and

ic ce

ing at ed

dy are e

vised OE other king

d e wind

Foundatiobased ridgto site on than land- For oceancost from project coturbine inapplicatioto weight,have highsea and di For this reand to sta Below is Ttower, andRidgeline

10 The 4-legtons. These Wind Suppl11 Heffron, RMaryland, S

on costs in shageline applicabarges and so-based projec

n applicationsthe engineeri

ost and 30-40%n extreme weaons, while use, height and le

her maintenanistance from s

eport, costs arrt operating in

Table 7-4 whd step-up tran

e, to just over

g platforms for 4

are installed in tly Chain ExamplRon, et al, “Red

September 2011.

allow, 3 to 10ations. On wao overall consts.

the foundatioing firm Moff% of capital eather conditioe of the largerength transpo

nce costs than shore.

re expressed in 2013.

hich shows plnsformer and $1,600/kW fo

8 of the 6 MW Rthe North Sea inle”, at Virginia O

ducing the Cost o.

0 m, water depater, cranes anstruction cost

ons become mffatt and Nichoequipment cosns and becau

r 5 MW turbinortation restric

land-based p

in 2012 dollar

ant capital cocontrols. Turb

for Shallow B

REPower turbinen water up to 26 mOffshore Wind Dof Offshore Wind

pth in bays annd heavy conss for shallow

much heavier o11 showed thst. This is becse larger, 5Mne componentctions. In add

projects due to

rs, because th

osts. As showbine costs runay, to just ov

es being installedm deep. Source:Development Aud Turbine Found

nd sounds arestruction equiwater sites m

and more coshat foundationcause of the n

MW turbines ats is unlikely

dition, offshoro access limit

he plants are a

wn, the turbinen $1,100/kWer $1,700/kW

d in Thornton B McNeilan, T., P

uthority meetingdations”, AWEA

e assumed to bipment can be

may not be sig

stly10. Data onns can amounneed to suppoare anticipated

in land basedre applicationtations caused

assumed to be

e capital cost for Coastal P

W for Ocean.

Bank in Belgium Presentation “Eu

g, 12 January 201A Offshore Conf

be similar toe easily movegnificantly gre

n European pnt to 24% of thort and protectd for offshored applicationsns are assumedd by condition

e built during

includes turbPlains and

each weigh oveuropean Offshor12. ference, Baltimo

63

land-ed site eater

project he t the

e s due d to ns at

g 2012

bine,

r 300 e

re,

6

TA

C

P

T

T

C

TC

F

T

C

A

(

PI

I

T

T

EA

64

Table 7-4. Fully LoaAssuming IPP Own

Component

Plant Size (MW)

Turbine

Tower

Step-up TransformerControls

TURBINE CAPITACOST

Foundation

Transportation

Civil Works & Road

Assembly & Installat

System Control & D(SCADA)

Plant Substations & Intraconnection

Step-up TransformerIntraplant Interconne

Transmission Lines

Substation and Transmission Lines

Engineering, PermitsApproval

aded Capital Costs (ership and Project F

Coastal PlaiDPL-ODEC67 1.5 MW t

Cost ($/kW)

956.0

130.7

r and 13.3

AL 1,100.0

52.7

54.7

ds 85.3

tion 54.7

ata 13.3

136.7

r and ection 0.0

0.0

0.0

s, and 35.3

(Uses of Funds) for tFinance, located in t

ins – C turbines

R67

) Cost ($1,000) C

100.5

96,078

13,132

1,340

110,550

5,293

5,494

8,576

5,494

1,340

13,735

0

3,551

the 2012 100 MW Wthe Mid-Atlantic re

idgeline - Cloverdal7 1.5 MW turbines

ost ($/kW) Cost ($

956.0 9

130.7 1

13.3

1,100.0 11

60.7

63.3

98.0

63.3

13.3

157.3 1

0.0

0.0

0.0

40.7

Wind Energy Plantsgion (in 2012 dollar

le Shallow BaCalvert Cli20 5.0 MW

$1,000) Cost ($/kW

100.5

96,078 0.0

13,132 1,610.0

1,340 0.0

10,550 1,610.0

6,097 115.0

6,365 115.0

9,849 0.0

6,365 92.0

1,340 23.0

15,812 0.0

253.0

0 0.0

0.0

4,087 92.0

. rs).

ays – iffs

W turbines

O2

W) Cost ($1,000) C

100

0

0 161,000

0

0 161,000

0 11,500

0 11,500

0 0

0 9,200

0 2,300

0

0 25,300

0

0 0

0 9,200

Offshore Ocean - Fe20 5.0 MW turbines

Cost ($/kW) Cost (

0.0

1,709.7 1

0.0

1,709.7 1

460.0

230.0

0.0

200.0

41.7

0.0

583.8

0.0

0.0

166.8

entress

$1,000)

100

70,970

70,970

46,000

23,000

0

20,000

4,170

58,380

0

16,680

C

BS

IC

A5

C(5

C(dr

D5

E

Dm7y

W(w

T

Component

BALANCE OF STATION COST

INITIAL OVERNIGCAPITAL COST

Assume plant financi50% Debt to 50% eq

Construction Financi(8% * subtotal * 1 ye50% level drawdown

Construction Insuran(0.36% to 0.50% of depreciable base, frorecent quote)

Debt Financing Fees50% capital fraction)

Equity Financing Fee* 50% capital fractio

Debt Financing Resemonths payment, giv7.50% interest over 2years)

Working Capital Res(O&M * 1 year * 25%which is 3 months.)

TOTAL LOADED


Cost ($/kW)

432.7

GHT 1,532.7

ing is quity.

ing ear * n)

nce

m a

(1% * )

es (2% on)

erve (6 ven 20

serve %,

COST 1,669.2

ins – C turbines

R67

) Cost ($1,000) C

43,483

154,033

6,000

580

840

1,680

4,100

520

167,753


ost ($/kW) Cost ($

496.7 4

1,596.7 16

1,738.1 17


$1,000) Cost ($/kW

49,915 690.0

60,465 2,300.0

6,200

600

870

1,750

4,250

540

74,675 2,501.9

ays – iffs

W turbines

O2

W) Cost ($1,000) C

0 69,000

0 230,000

8,800

1,000

1,250

2,500

6,090

550

9 250,190


Cost ($/kW) Cost (

1,682.3 1

3,392.0 3

3,697.3 3

entress

$1,000)

68,230

39,200

13,200

1,780

1,850

3,700

9,000

1,000

69,730

65

66

Balance oparts and interconnebased planper kW foOcean, wh Note that water-bastransmissigrid. The Southapproved by approvprices cansystem wiopted not Also noteconnect oStates.15 Wtreat the traccording Looking aconstructeConstructmonth debfully loadCoastal Plassume cugrade, andto fully ut For favoraThe overnconstructiof the debruns $1,66$3,680 peslightly le 12 “SPP PropDistribution13 DiMugnoPublications14 NAW StaZackin Publ15 On MarcRegulation aRegionalProat http://ww

of Station (BOinstallation. Bection for thents, plus engior Coastal Plahich requires

for the land-bed plants, a sion can vary w

hwest Power Psome new pr

ving Order 10n vary widely ide electric mto include tra

the Atlantic ffshore powe

While it has yransmission l

gly. The wires

at Table 7- 4,ed are added. tion insurancebt service res

ded project caplains and Ridurrent, likely d 50% equitytilize the Sect

able financingnight capital cion insurancebt and equity r60 to $1,730 per kW for Oceess than those poses New Cost

n World, Penton o, Laura, “FERCs, Waterbury CTaff, “FERC Denlications, Waterb

ch 31, 2011, Atlaand Enforcemenoposals.htm . On

ww.atlanticwindc

OS) costs incluBOS costs fure land-based pneering desig

ains and Ridgesubstantial fo

based plants, ubstation andwidely and w

Pool and otherojects.12 In Ju000.13 In May

and because market participansmission co

Wind Connecer generation tyet to be deterlines and a plas are brought

, one sees thatThese includ

e was added, berve was addpital cost. As

dgeline, to $2,(first half 201, where the eqtion 45 Produ

g, plant capitacost is identic, and workingraised, and thper kW for Cean. It is inter listed earlier

t Sharing MethodMedia Inc.; New Final Rule Refo

T; July 26, 2011.nies Rehearing onbury CT; May 1antic Grid Holdinnt (BOEMRE). Sn December 20, 2connection.com/f

ude foundatiorther include plants or step-gns, permits, aeline, to $690oundations.

transmission d transmission

will be high fo

ers are lookinuly 2011, FER2012, FERC it is unclear w

pants, so as noosts here.

ction (AWC).to the onshorermined how thant substationto the project

t to the overnde constructiobased on a sped, as well asshown, the fu500/kW for S

12) financingquity investor

uction Tax Cre

al costs are secal by the twog capital are the debt serviceCoastal Plains resting that thr.

d for Expandingw York, NY; Aporms Transmissi n Transmission P8, 2012. ngs submitted a

See http://www.b2010, AWC fileferc/2010-12-fili

on, transportaSCADA equi-up transformand approvals0 per kW for S

lines are not n lines are notr a Ridgeline

ng at cost-sharRC addressedupheld Orde

when transmiot to confuse

. The AWC ise electrical grhe cost will bn as part of tht.

night plant cosn financing a

pring 2011 qus financing fefully loaded prShallow Bay, , with 50% ders are assumeedit (PTC).

et forth in Tab financing mehe same. Onle reserve chanand Ridgeline total loaded

g the Regional Elpril 19 2010. ion Planning, Co

Planning and Co

request for rightboemre.gov/offsd with FERC, iningsummary/.

ation, civil woipment, plant

mer and Interps. As shown, Shallow Bay,

included witht included as

e or Ocean pla

ring methods d transmissioner 1000.14Accoission is allocproject econo

s a proposed lrid of the Mide paid, in Eure grid and the

st, certain cosand a small wouote for propees to raise debroject cost ruto $3,697/kW

ebt rated BB, ed to be in a p

ble 7-5 belowethods. The cly the financinnge. As show

ne, to $2,490 pd costs under

lectric Transmis

ost Allocation,” N

ost Allocation O

t-of-way to the Bshore/Renewablen a petition for d

orks and roadt substations aplant Interconn

BOS costs ru, and to $1,68

h plant cost. Ipart of the pl

ant that is loca

and, in early n planning anordingly, bec

cated to a projomics, the aut

large transmid Atlantic andrope it is comeir costs are a

sts to get the porking capitarty damage anbt and equity

uns $1,670 to W for Ocean. which is non

positive earnin

w. As shown, construction fng fees, whic

wn, the fully loper kW for Shfavorable fin

ssion Grid,” Tran

North American

Order,” North Am

Bureau of OceaneEnergy/StateAcdeclaratory order

ds, and assemband nection for w

un $430 to $580 per kW for

In addition foant cost. Costated far from

2012, SPP d cost allocatause transmisject or to regithors of this r

ission system d New Englan

mmon practiceallocated

plant financedal reserve. nd liability. A

y, to produce a$1,740/kW foThese plants

n-investment-ngs mode and

for all four pfinancing, h are percentoaded projecthallow Bay, a

nancing are ju

nsmission &

n Windpower, Za

merican Windpow

n Management, ctivities-r. See the press r

bly of

water-00 r

or the t of the

tion ssion onal report

to nd e to

d and

A six-a or

-d able

lants.

ages t cost and to st

ackin

wer,

release

T

AalAd

P

T

T

C

TC

F

T

C

A

(

PI

I

T

T

Table 7-5. Fully Loa

Assuming IPP Ownand Project Financelocated in the Mid-Atlantic region (in 2dollars).Component

Plant Size (MW)

Turbine

Tower

Step-up TransformerControls

TURBINE CAPITACOST

Foundation

Transportation

Civil Works & Road

Assembly & Installat

System Control & D(SCADA)

Plant Substations & Intraconnection

Step-up TransformerIntraplant Interconne

Transmission Lines

Substation and Transmission Lines

aded Capital Costs (

nership e,

2012 t


Cost ($/kW)

956.0

130.7

r and 13.3

AL 1,100.0

52.7

54.7

ds 85.3

tion 54.7

ata 13.3

136.7

r and ection 0.0

0.0

0.0

(Uses of Funds) with

ins – C turbines

R67

) Cost ($1,000) C

100.5

96,078

13,132

1,340

110,550

5,293

5,494

8,576

5,494

1,340

13,735

0

h Favorable Financi


ost ($/kW) Cost ($

956.0 9

130.7 1

13.3

1,100.0 11

60.7

63.3

98.0

63.3

13.3

157.3 1

0.0

0.0

0.0

ing. for the 2012 100


$1,000) Cost ($/kW

100.5

96,078 0.0

13,132 1,610.0

1,340 0.0

10,550 1,610.0

6,097 115.0

6,365 115.0

9,849 0.0

6,365 92.0

1,340 23.0

15,812 0.0

253.0

0 0.0

0.0

0 MW Wind Energy

ays – iffs

W turbines

O2

W) Cost ($1,000) C

100

0

0 161,000

0

0 161,000

0 11,500

0 11,500

0 0

0 9,200

0 2,300

0

0 25,300

0

0 0

y Plants.


Cost ($/kW) Cost (

0.0

1,709.7 1

0.0

1,709.7 1

460.0

230.0

0.0

200.0

41.7

0.0

583.8

0.0

0.0

entress

$1,000)

100

70,970

70,970

46,000

23,000

0

20,000

4,170

58,380

0

67

6

AalAd

EA

BS

IC

A6

C(5

C(dr

D6

E

Dm4y

W(w

T

68

Assuming IPP Ownand Project Financelocated in the Mid-Atlantic region (in 2dollars).Component

Engineering, PermitsApproval

BALANCE OF STATION COST

INITIAL OVERNIGCAPITAL COST

Assume plant financi60% Debt to 40% eq

Construction Financi(8% * subtotal * 1 ye50% level drawdown

Construction Insuran(0.36% to 0.42% of depreciable base, frorecent quote)

Debt Financing Fees60% capital fraction)

Equity Financing Fee* 40% capital fractio

Debt Financing Resemonths payment, giv4.00% interest over 2years)

Working Capital Res(O&M * 1 year * 25%which is 3 months.)

TOTAL LOADED

nership e,

2012 t


Cost ($/kW)

s, and 35.3

432.7

GHT 1,532.7

ing is quity.

ing ear * n)

nce

m a

(1% * )

es (2% on)

erve (6 ven 20

serve %,

COST 1,663.1

ins – C turbines

R67

) Cost ($1,000) C

3,551

43,483

154,033

6,000

580

1,000

1,340

3,670

520

167,143


ost ($/kW) Cost ($

40.7

496.7 4

1,596.7 16

1,732.0 17


$1,000) Cost ($/kW

4,087 92.0

49,915 690.0

60,465 2,300.0

6,200

600

1,040

1,400

3,820

540

74,065 2,493.2

ays – iffs

W turbines

O2

W) Cost ($1,000) C

0 9,200

0 69,000

0 230,000

8,800

1,000

1,500

2,000

5,470

550

2 249,320


Cost ($/kW) Cost (

166.8

1,682.3 1

3,392.0 3

3,684.3 3

entress

$1,000)

16,680

68,230

39,200

13,200

1,780

2,200

2,950

8,100

1,000

68,430

7.4 Sou For the MIndependeMW, this or munici Given Useshown in Table 7-6. SAssuming 5

Funds

Debt

Second Lo

Equity

Total

Table 7-7. SAssuming 6

Funds

Debt

Second Lo

Equity

Total

As will beTax Credilikely finaDPL-ODEfinancing,and $149.

rces of Fu

Mid-Atlantic Went Power Prois the more lipal utility mi

es of Funds, aTable 7-6 an

Sources of Fund50% Debt to 50

s DPL-O

CoasPlai

8

oan

8

16

Sources of Fund60% Debt to 40

s DPL-O

CoasPlai

10

oan

6

16

e discussed lait (PTC), whiancing approaEC Coastal Pl, the debt frac.592 million f

nds

Wind Energy soducer using ikely ownershght pursue wi

as shown in Tnd Table 7-7,

ds for 2012 100 0% Equity (in 2

ODEC stal ins

CloveRidge

83,877 8

0

83,877 8

67,754 17

ds Under Favor0% Equity (in 2

ODEC stal ins

CloveRidge

00,286 10

0

66,857 6

67,143 17

ater, under Finch offers a taxach, the fractilains and $12ction increasefor Calvert Cl

study, it is asslimited recouhip/financingind energy pl

Table 7-4 andfor the differ

MW Wind Ene012 dollars).

rdale eline

CalvCli

ShaBa

87,338 12

0

87,338 12

74,676 25

rable Financing012 dollars).

rdale eline

CalvCli

ShaBa

04,439 14

0

69,626 9

74,065 24

nancial Assumx benefit but ion of debt is 25.095 milliones to 60%, whliffs Shallow

sumed that wurse Project Fi option for abant ownership

d Table 7-5, trent cases for

ergy Plants.

vert iffs llow ay

FentOc

25,095 1

0

25,095 1

50,190 369

g for 2012 100 M

vert iffs llow ay

FentOc

49,592 2

0

99,728 1

49,320 3

mptions, to mnot cash withreduced to 50

n for Calvert Chich is $100.2Bay.

wind energy plinance. For a

bout the next p.

then Source o2012.

tress cean

84,865 at 7.5%custommonet

0

84,865 receivover 2remain

9,730

MW Wind Ener

tress cean

21,058 at 4.0%custommonet

0

47,372 receivover 2remain

68,430

make better ush which to rep0%. For examCliffs Shallow

286 million fo

lant ownershia wind energyten years, alth

of Funds could

Comments

% for 20 years, pmized schedule wtized Section 45

ving cash and tax25-year contract nder value

rgy Plants.

Comments

% for 20 years, pmized schedule wtized Section 45

ving cash and tax25-year contract nder value

e of the Sectipay debt, und

mple, debt is $w Bay. With or DPL-ODEC

ip will be by ay plant sized ahough a regul

d be prepared

s

paid on a with PTC

x benefits, life, plus

s

paid on a with PTC

x benefits, life, plus

ion 45 Producder the current$83.877 milliofavorable C Coastal Pla

69

an at 100 lated

d, as

ction t, on for

ains

70

Because cfinancing,Treasuriescustomize By favoralowest invfinancing,expected tprobably might dec As Table is 50% or ODEC Coequity framillion foits 25-yea Note that benefits (ibenefits. I“monetizeAssumpti2013. Induthe ITC (Ihigh powe When it isand calcul Furthermoownershipcomplicatbasic case

contracted pla, fixed rate ins at 1.75% aned payment of

able financingvestment-grad, for 20-year dto increase, bdecline, so th

cline slightly.

7-6 and Tab40% of the p

oastal Plains aaction is reducor Calvert Clifar contract life

it is assumedi.e., from fiveIt has been coe” the Sectionons, the PTC ustry observeInvestment Taer production

s “monetized,late the debt c

ore, this analyp pattern invoted ownershipe, the after-tax

ant life is 25 ynterest is estimnd a spread off principal.

g, against 10-yde, is smaller,debt is 4.00%

but spreads forhe energy proj

le 7-7 show, project cost. Fand $125.095ced to 40%, wffs Shallow Be, plus remain

d that outside e-year rapid dommon practin 45 PTC and

was extendeders are hopefuax Credit), wh

n, regardless o

,” the PTC is coverage ratio

ysis representolving variousp strategy is dx return on eq

years, the debmated at a ratef 5.70%, roun

year Treasuri, at 2.25%. Th

%. When futurr corporate, pject’s nomina

for these winFor example, b5 million for Cwhich is $66.8Bay. Equity owning value.

equity investodepreciation ace, over abou

d use it to repad in 2009 for

ul this credit fhich rewards

of cost. The S

“counted” wio. This practi

ts a basic cases classes of eqdesired, the baquity, includin

bt term is 20 ye of 7.50%, foded up slight

es at 1.75%, therefore, the pre economic cproject, and otal current likel

d energy projby current finCalvert Cliffs857 million fowners receive

ors will be sond ten years o

ut the past decay debt. As wthree years, f

for wind energhigh cost, theection 45 PTC

ith operating ce was used h

e over which quity investorasic project wng all cash an

years. For curor BB-rated dtly. Debt repay

the spread forproject’s inte

conditions imther debt and ly interest rat

jects, the balanancing, equit Shallow Bayor DPL-ODECe all the proje

ought, who caof Section 45cade, for wind

will be describfor plants placgy will be exte PTC rewardC for wind is

profits againshere.

a developer mrs, including T

will stand on itnd tax benefits

rrent (first haldebt, assumingayment is twic

r BBB-rated derest rate, und

mprove, Treasuespecially fo

te is not expec

ance of fundinty is $83.877 y. With favoraC Coastal Pla

ect’s cash and

an fully utilize5 PTC), as wed energy plan

bed later with ced in servicetended again ds efficiency, $0.022 per k

st the debt pa

may place a mTax Investorsts own. Conses, is project-w

lf 2012), likelg 10-year ce per year, by

debt, which isder favorable ury rates are or riskier debtcted to rise an

ng is equity, wmillion for D

able financingains and $99.7d tax benefits

e the project’sell as its cash nt developers

Financing e before Januabecause, unliin the form o

kWh in 2012.

ayment, to pay

more complicas. If no equently, for

wide.

ly

y

s the

t, will nd

which DPL-g, the 728 over

s tax

to

ary 1, ike of

y debt

ated

the

7.5 Perf To show hcalculatedhourly capthe four pon-peak a Table 7-8. P

Calvert ClifCloverdale –DPL-OPECPlains Fentress – O

These capchart, for highest inThey are lconsidereSection 5.

Figure 7-3.

formance (

how much pod. Capacity fapacity and ass

plant locationsand for off-pe

Plant Capacity

O

ffs - Bay – Ridgeline

C – Coastal

Ocean

pacity factors each season,

n winter, both lowest in sumd to be repres. Wind resour

Plant Capacity

(Plant Capa

ower would beactor is definesuming 8,760s. Table 7-8 bak hours.

Factors by Nod

Off-Peak On-PFall 34.13% 3333.42% 30

26.55% 23

33.76% 33

are also showto orient a refor on-peak a

mmer. The capsentative of earces estimates

y Factors by No

acity Facto

e produced ated as annual p0 hours of opebelow shows

de, by Season.

Peak Off-PeakWinter

3.64% 45.330.13% 48.46

3.34% 40.11

3.27% 47.17

wn in Figure ader. As Figuand off-peakpacity factor each wind mars and assump

ode

ors) for the

t each plant lopower produceration. Tableplant capacity

k On-Peak r 3% 43.58%6% 48.46%

% 36.41%

7% 45.13%

7- 3 below. Ture 7- 3 showhours. Capacestimates are rket sector an

ptions are disc

e Wind Ene

ocation, planted by the plane 5-4 shows cy factors by s

Off-Peak OnSpring

41.50%35.62%

37.96%

42.26%

The Calvert Cws, for all plancity factors are

all based on nd are used in cussed in deta

ergy Plants

t capacity factnt over capac

capacity factoseason, furthe

n-Peak Off-P Sum

36.44% 234.71% 2

35.89% 1

40.50% 2

Cliffs data labents, that capace second highmeasured datthe Forward

ail in Section

s

tors were city at full rateors, by seasoner broken out

Peak On-Pemmer 24.26% 23.722.08% 19.0

15.02% 12.9

25.04% 23.5

el is printed ocity factors arhest in springta at sites thatpricing mode9 of this repo

71

ed n, for for

ak AverageAnnual

74% 35.35%01% 34.20%

95% 28.43%

50% 36.20%

on the re . t are els in ort.

%%

%

%

72

7.6 Ope The methofor the wi Table 7-9. M

Expense

Operations a

Major Main

Site Owner

Property Ta

Property, CaInterruption

For each pDPL-ODErent is $0.Operatingfinancing Note that expressedthe plant descalated For propejurisdictioenergy pla

erating Exp

odology to esind energy pla

Methodology fo

and Maintenanc

ntenance and Ov

Land Rent (or R

ax

asualty and Busin Insurance

plant, operatinEC Coastal Pl.335 million. g expenses are.

the wind ened in 2012 US ddoes not startone year to 2

erty tax, rates on. See Tableants for Delaw

penses for

stimate annuaants is describ

or Estimating W

Comm

e For C$32,0$200,

erhauls For C$9,18

Royalty) For CShalloEstimfor Rino proline d

iness Estimmilliocost, aShallomillio

ng expenses alains, the planProperty tax,e the same, w

rgy plant is bdollars. Capitup till Januar

2013, to be “y

and methods e 7-14, at the ware, Maryla

the Wind E

al operating exbed below in

Wind Energy Pla

ments

Coastal Plains, es000 per 1.5 MW ,000 per 5.0 MW

Coastal Plains, es80. For Shallow BCoastal and Ridgow Bay and Oce

mated as 1.10% oidgeline. Assumoperty tax for Ba

depreciation of 4mated as 0.311% on for Ridgeline,annual revenuesow Bay and Oceon.

and performant capacity fa insurance, an

whether the pla

built during 20tal costs will bry 1, 2013, soear one” expe

of assessmenend of this chnd, North Car

Energy Pla

xpenses, rangTable 7-9.

ant Operating E

stimated as $31,0turbine or $21.3

W turbine or $22.stimated as $9,00Bay and Ocean, eline, assume re

ean, assume rent of depreciable ba

me the assessmenay or Ocean. As.0% [1.0/25] is dof depreciable b, in spring 2011.

s, deductibles, anean, assume perc

nce are showactor is 28.4%nd major mainant is finance

012, so it is cobe paid as the

o operating exenses.

nt vary by stathapter, for detrolina, Virgin

ants

ging from O&

Expenses

000 per 1.5 MW33/kW. For Shall.00/kW and $4000 per 1.5 MW tas $35,000 and

ent is $5,000 per t is $4,000 per 5.ase, at $160.6 mint increases by insume equipmentdeducted, till onbase, at $160.6 m. Insurance cost nd so forth, whiccentages are 0.44

wn in Table 7-%. O&M is est

ntenance andd by current m

onsidered a 2e plant is consxpenses for th

te and, withintailed propertnia, and the D

&M to land ren

W turbine or $20.low Bay and Oc.00/kW. turbine per year.$45,000 per 5.01.5 MW turbine

.0 MW turbine oillion for Coastanflation, which isnt life is 25 yearsne reaches a minimillion for Coastis calculated bas

ch works out to t4% and 0.45% o

-10 below. Fotimated as $2

d overhauls armethods or by

2012 plant andstructed durin

he cash flow p

n a state, by cty tax informa

District of Col

nt and insuran

67/kW. For Ridgcean, $110,000 a

. For Ridgeline, 0 MW turbine. e or $3.33/kW. For $0.80/kW. al and $167.3 mis 2.5% here. Ass

s, so annual straiimum level of 30tal Plains and $1sed on replacemthis percentage. on $239.8 and $3

or example, fo.077 million.

re added. y favorable

d costs are ng 2012. Howprojections ar

county and location for windlumbia.

nce,

geline, and

as

For

llion sume ght-0%. 167.3 ent For

354.2

or Land

wever, re

cal d

T

L

Table 7-10. Perform

Located in the Mid-A

mance and Annual O

Atlantic region (in 20

Operating Expenses

13 dollars, except fir

for 2012 Wind Ener

st column. Plant is co

rgy Plants.

onstructed in 2012 annd begins operating inn 2013.)

73

74

Regardingdrawn dowannual exneeded, theach year taken to simpact on 7.7 Fina

Ener Finance aMid-Atlan25 years. repaymenownershipalternate, or iron-claInvestors assume eqincluding 7.7.1 P For the parenewablebalance-shto, as colland other other projother lend 7.7.2 D Because pproblem iinvestors tariff redu As describpower, sizTable 7-1institutioninvest. Hisaid to hato CCC, o

g major maintwn every fifthpense, estima

hey may be saand a deposihelter income

n COE.

ancial Assurgy Plants

and project owntic Wind stuBecause the p

nt and becausep flips is assufavorable finad guaranteesor flips, is 60

quity investorfive-year dep

Project Finan

ast 20 to 30 yee energy, werheet corporatateral, only thassets of the ects. Because

ding, debt and

Debt Feature

project life is n debt paymeenjoy an outs

uction beginni

bed earlier, cuzed at 100 MW11 below. Nonnal investors (igh-yield interve “fallen off

over comparab

tenance, someh or tenth yeaated here as $aved for the nt to a reserve e. The tax sav

umptions f

wnership assuudy, inflation plants are selle the Section

umed, therefornancing scenars from an esta0% debt to 40rs are in a pospreciation and

nce

ears, many inre structured ae finance, Prohe assets of thdeveloper an

e IPP Project d equity inves

es, including

25 years, debent may be “wsized return, wing in year 21

urrent, likely,W or more, ten-investment (as required brest rates are f a cliff” and sble Treasurie

e wind energyar, to perform 6/ to $9/kW-c

next year. Althfund is not, o

vings from ex

for current

umptions repreis estimated aling merchant45 PTC is takre, the projectrio, which ass

ablished, cred% equity. Bo

sitive earningsd the PTC.

ndependent poand financed uoject Finance he project. Dend they do not

Finance is risstors require a

Rating and

bt term is 20 yworked out.” Iwhich they m1.

, long-term prends to be rategrade debt is

by their bylawmuch higher spreads of abs.

y projects wilmajor overha

capacity, thathough a majoonce the overhpensing majo

t likely and

esent an impoat 2.50% and t power, whicken and no cot’s capital frasumes either a

dible developeoth financing ss mode, so th

ower projects utilizing limitgives its debt

ebt and equityt have recoursskier than bala higher rate o

Interest Rat

years. This ofIf there are noay share partl

roject debt fored BB, whichs termed high-ws) and other

than those foout 300 to 90

ll deposit monauls. Anothert escalates witor maintenanchaul is perfor

or maintenanc

d favorable

ortant area forproject life is

ch is riskier toomplicated straction is set ata strong Power if selling mscenarios util

hey may fully

(IPPs), whetted recourse pt and equity i

y investors dose to assets orlance sheet coof return.

te

ffers a short po debt repaymly with the po

r a large windh is one grade-yield or “juninvestors (as

or investment 00 basis point

ney to a reserr approach is th inflation. Ice expense is rmed, repair dce does not ha

e financing

r cash flow ms assumed to bo the lender seructure with Tt 50% debt to

wer Purchase Amerchant, and lize a monetizutilize all tax

ther fossil-fueproject financinvestors’ seco not have recr earnings of torporate finan

period of five ment problemower purchase

d energy plane below investnk” debt, into a matter of chgrade, with rs or higher, fo

rve fund, to bto assume an f funds are notax-deductibl

depreciation cave a significa

g of the Win

modeling. For be contract lieeking certainTax Investors50% equity.

Agreement (Pagain with no

zed PTC and x benefits,

eled or using cing. In contracurity or recoucourse to the cthe developer

nce and certain

years, where ms, then equity

er, by a slight

nt, selling mertment grade. which certain

hoice) will norates sometimfor debt rated

e ot le can be ant

nd

this fe, at nty of s or The

PPA) o Tax

ast to urse cash r’s n

any y t

rchant See n ot

mes BB+

Table 7-11.As describe

S&P andothers

AAA

AA+ AA AA-

A+

A A-

BBB+

BBB BBB-

At the prequote of 1range of acrisis in la4.00%, beSeptembe Ten-year 2012, giveamong gloTreasury r

16 Richard CYork; New 17 Bloomberhttp://www.

. Classic Long-Td in the 1994 Fe

Investment

d Moody’

Aaa

Aa1 Aa2 Aa3

A1

A2 A3

Baa1

Baa2 Baa3

esent time, in 1.74% from Babout 3.50% tate 2008. Oveefore trading fer 22, 2011, w

Treasuries laten the “easy mobal investmerates.

Cantor and FrankYork, NY; Sumrg Government B.bloomberg.com

Term Senior Deederal Reserve B

t Grade Rating

’s Inte

Highest qu

High qualit

Strong pay

Adequate pcapacity.

mid-May 201Bloomberg at to 5.20% fromer the past twofrom a high o

with a bounce

tely range fromoney” policents. See Figu

k Packer, “The C

mmer-Fall 1994, pBonds: 10-year T

m/markets/rates-b

ebt Ratings Bank of New Yor

s

rpretation

uality.

ty.

yment capacity.

payment

12, the 1.75%the close on M

m 2005 througo and a half y

of about 3.70%and a fall to a

om about 1.70cies of the Fedure 7-4 below

Credit Rating Indpage 3. Treasury Notes;

bonds/governmen

rk Quarterly Rev

S&P and others

BB+

BB BB- B+ B B-

CCC+

CCC CCC-

C

D

% estimated raMay 25, 2012gh mid-2008, years, ten-year%, during the a historical lo

0% to 2.40%, deral Reservew, which pres

dustry,” FRBNY

New York, NYnt-bonds/us/ ; M

view.16

Speculati

Moody

Ba1

Ba2 Ba3 B1 B2 B3

Caa

Ca

D

ate for 10-yea2.17 Ten-year before fallin

ar Treasury ratfirst half of 2

ow of 1.57% o

from Septeme and the percents an appro

Y Quarterly Revi

; internet site: May 15, 2012 and

ive Grade Ratin

y’s I

Likely tongoing High ris Current default, (Moody In bankrother ma

ar Treasuries iTreasuries tra

ng to 2.10% duates ranged fro2011, down toon May 31, 2

mber 2011 throceived safety ooximate 13-ye

iew: Federal Res

d May 25, 2012.

ngs

Interpretation

to fulfill obligatig uncertainty.

sk obligations.

vulnerability to or in default

y’s).

ruptcy or defaultarked shortcomi

is correct, witaded within auring the finaom about 1.70o 1.72% on

2012.

ough late-Maof US Treasuear history of

serve Bank of N

75

ons;

t, or ing.

th a a ancial 0% to

ay uries f

ew

76

Figure 7-4.

Source: FedMaturity Ra Current mis 5.70%. one perce Limits forannual opminimum For favoracurrent minvestmenis 4.00%. times aver Debt repaoperating Cloverdalintervals, years 6-102.5%, 2.52.1%, 2.1 7.7.3 E As describequity. Wproject’s cassumed tfrom five-targets forfor ocean.

10-Year Treas

deral Reserve Baate: 01/02/1999 –

market conditiThe spread mnt. Conseque

r debt coveragperating incom

m.

able financingmarket conditio

nt-grade debt.Limits for derage and 1.3 t

ayment is assucash flow an

le – Ridgelineby five-year 0: 2.7%, 2.7%%, 2.5%, 2.5%%, 2%, and 2

Equity Featur

bed earlier, unWith favorable

cash and tax bthat outside e-year rapid der after tax IRR. Rates are hig

ury Note Intere

ank of St. Louis, – 05/21/2012; pr

ions suggest tmay be cited antly, the wind

ge for BB-ratme over the an

g, against 10-ons, is 2.25%. The project’ebt coverage ftimes minimu

umed to be twnd ten-year rece, under curreincrements, i

%, 3.1%, 3.1%%, 2.5%, 2.5%

2%.

res

nder current, financing, th

benefits over quity investorepreciation anR are 17% forgh because ri

est Rates: Jan 1

Fred Graph Obsrepared May 23,

that against 10as 570 basis pd energy proj

ed debt, by cunnual debt pa

-year Treasuri or 225 basis s interest ratefor BBB-ratedum. The debt

wice per year, ceipt of the Sent, likely finas: years 1-5:

%, 3.5%, 3.5%%, 2.5%; and

likely long-tehe equity fract

its 25-year cors will be sound ten years or land based wsk exists and

1999 – May 2012

servations, St. L 2012.

0-year Treasupoints, where ect’s interest

urrent marketyment, are es

ies at 1.75%, points. Sprea

e, under favord debt, by curfraction is es

by customizeection 45 Proancing, the pr1%, 1%, 1.5%

%, 4%, 4%, 4.2d years 16:20:

erm financingtion is reduceontract life, pught, who canof Section 45 wind energy pthe cash flow

2.

Louis MO; intern

uries at 1.75%one basis poirate for 20-ye

t conditions, wstimated as 3.

the spread foads are markerable financinrrent market ctimated as 60

ed payment ooduction Tax rincipal paym%, 1.5%, 1.8%2%, 4.2%; ye: 2.5%, 2.5%,

g, capital raiseed to 40%. Eqplus remainingn fully utilize PTC), as welplants, 22% f

ws are only es

net site: 10-Year

%, the spread fint (bp) is oneear, BB-rated

with coverage0 times avera

or BBB-rated edly lower forng, for 20-yeaconditions, ar0%, against 40

of principal, thCredit. For ex

ment schedule,%, 1.8%, 2%, ears 11-15: 2., 2.5%, 2.5%,

ed is expectedquity owners rg value. As dithe project’s

ll as its cash bfor shallow wastimates.

Treasury Consta

for BB-rated e one-hundredd debt is 7.50%

e calculated aage and 1.8 tim

debt, under r less risky, ar, BBB-ratedre estimated a0% equity.

hat follows xample, for , at six-month2%, 2.4%, 2.2%, 2.2%, 2. 2.5%, 2.5%,

d to include 5receive all theiscussed it is tax benefits (

benefits. Projeater bay, and

ant

debt dth of %.

as mes

d debt as 1.5

h .4%; 5%,

50% e

(i.e., ected 25%

For this anrepay debto calcula When comfraction mdeveloperreceive dicomplicatthe basic c Financial Summary Section 4NREL, whis assumepractice. Beyond thDepreciatcredits proif construthey are nincentivesenergy pla Financial below in T

nalysis, an unbt. When it is ate the debt co

mplex ownersmay be increasr may place a ifferent percented ownershipcase, the after

assumptions y descriptions

5 Productionhere the Sectid for this repo

he Section 45tion, were incovided under ction is begun

not a permanes will be extenant of 100 MW

assumptions Table 7-12.

nderlying assu“monetized,”

overage ratio a

ship-financingsed. Howevermore complintages of cashp strategy be pr-tax return on

for the Mid-Aof how and w

n Tax Credit (ion 45 PTC wort that the PT

PTC, no otheluded in this 2009 ARRA

n during 2011ent part of the nded, and becW or more, it

for the cash f

umption is tha” the PTC is “and it is used

g structures inr, as stated eaicated ownersh and tax benproposed, then equity, com

Atlantic windwhy certain va

(PTC): Note twas not includTC is include

er recent inceanalysis. For , which can ru1 and is compUS Tax Cod

cause there is t was decided

flow analysis

at the Section“counted” with

to repay deb

nvolving Tax arlier, this anaship pattern, wnefits, that “flie basic projectmposed of bot

d energy projealues were se

that in contraded because ited. Including t

entives or subexample, theun 30% of ca

pleted by Decde, it is difficu

a certain “lagd not to includ

of Mid-Atlan

n 45 PTC willth operating pt.

Investors arealysis is the bawith various cip” or changet will stand onth cash and ta

ect are shownelected are inc

ast to some fort is not a permthe Section 4

bsidies, such ae Section 1603apital cost for ember 31, 20

ult to predict wg time” to plade special ince

ntic wind ene

l be “monetizprofits against

e employed, thasic case overclasses of eque over time. Sn its own. Co

ax benefits, is

n below in Tacluded also.

rmal estimatemanent part o5 PTC is com

as cash grants3 cash grants qualified win

012; are not inwhether or noan and build aentives.

rgy plants are

zed” and used t the debt pay

he project’s dr which the

uity investorshould no

onsequently, fproject-wide

ble 7-12.

es at DOE andf the Tax Cod

mmon industry

s or Bonus in lieu of tax

nd energy plancluded. Becaot these speciaa large wind

e summarized

77

to yment,

debt

who

for e.

d de, it y

x ants; ause al

d

7

T

A

1

78

Table 7-12. Financia

Assuming IPP Own

Parameter

Lifetime

Inflation Start Year Construction Period

Debt/Equity

Debt Rate

Debt Term Debt Rating Level (meet this level, wherated or not)

After-tax Leveraged

Income Tax Rate

Debt Coverage (defioperating income ovpayment, composedprincipal) Cost Of Energy (CO

IOU Cost of Capitalfor COE

18 “Range of State C

al Assumptions for 2

ership and Project F

Cu

25

2.520

d (years) 1.0

50

7.5rou20

project must ether actually

BB“jupo

d Equity Return 1722407.6ra6.

fined as ver the debt d of interest and

Avthe

OE) Coprido

l Discount Rate 7.04.3

Corporate Income Tax

2012 100 MW Wind

Finance, located in t

urrent (2012), Likely

5 years.

50% 013 0

0/50 with PTC.

50%, assuming 10-yeunded.

0 years. B, first level below inunk” debt. For currenower on a merchant b

7.00% target for Land2% target for Bay; an0.0% combined, as an69% deductible statetes are Delaware =9%, Virginia = 6.0verage of 3.00 times;e project sells power

ost Of Energy is presice, b) a discounted n

ollar, levelized charge00% nominal; 39% constant = [1.07

x Rates (For tax year

d Energy Plants.

the Mid-Atlantic re

y Conditions for IPP P

ear Treasuries at 1.75

nvestment-grade, whint, likely 2012 financbasis, its debt will pro

d-based plants; d 25% target for Oce

n “average” federal/st. For .the Mid-Atlan

= 8.7%, Maryland =%, and Washington minimum of 1.80 timon a merchant basis.

ented by three measunominal levelized chae, where the latter exc

70/1.025-1]

r 2011…)”; Federatio

gion (in 2012 dollar

Project Finance

5% and a spread of 5.

ich is also termed higcing, if the wind energobably be rated BB, a

ean. tate rate, assuming 35ntic states, maximu

= 8.25%, North Carn DC = 9.975%.18

mes, assuming a BB-.

ures, as: a) a raw yeaarge, and c) a discouncludes inflation.

on of Tax Administra

rs)

Fav

sam

samsamsam

60/

.70%, 4.0sprsam

gh-yield or gy plant sells at the highest

BBfavPoa Mandfrowosam

5% federal and um corporate rolina =

sam

-rating, where Ava Beithgu

ar-one bid nted, constant-

sam

sam

ators; Washington DC

avorable Conditions f

me

me me me

0/40 with PTC.

00%, assuming 10-yeread of 2.25%. me BB, lowest level of invorable financing, a Bower Purchase AgreemMerchant Plant be locd that it have extrem

om the developer’s paorthy entity, which isme

me

verage of 1.80 times; BBB-rating. The invether by a strong PPA,uarantees from a largeme

me

C; February 2011.

for IPP Project Finan

ear Treasuries at 1.75

nvestment-grade debtBBB-rated project rement. Alternatively, cated to receive attracely strong, contractedarent corporation or o

s probably a rare even

minimum of 1.30 timestment-grade rating , or possibly by iron-e, credit-worthy deve

ce

5% and a

t. Under quires a strong it requires that ctive prices d guarantees other credit-nt.

mes, assuming is achieved clad

eloper.

Parameter

Merchant Plant MetPower Purchase Agr

Energy Payment

Capacity Payment

Energy Payment Esc

Cu

thodology vs. reement (PPA)

ThwhpriBeca

Th$pco Fofor20pareqCaadcapaca2.5M20pethecaca AseqAsye

calation Rate ThbalonestAn Thinfwh


he project is assumedholesale market, wheicing curve, as can beecause merchant saleapable developer and

he energy componentper kWh, that is basedomponents. This is hi

or this analysis, the enrecast, customized by

015 Adder prices. Othayment is the revenuequirements. apacity is a fixed paydministered forward lapacity auctions haveayment, estimated at [apacity factor. For unc50% escalation and $AAC regions, the rat

015 adders. PJM nowerformance once histoe rate would be adjus

apacity factor used theapacity factor is alway

s a measure of proporquivalent of about $0.ssume 1.0% escalatioears. he PJM Forward Pricased on four years of nger-term escalation timated at 2.5%. Thennual Energy Outloo

he “Calculated COE”flation less 0.5%. Thhere power prices inc


d to sell power on a mere rates fluctuate, bue estimated for PJM s are risker, debt is pother project particip

t of the tariff paymend on marginal fuel, opstorically the larger s

nergy payment is figuy PJM node, and utiliherwise, by the “Calce required to meet pro

yment, paid as $ per kooking auction. For tpaid wind energy pla

[$rate/MW-day] * plconstrained RTO reg

$90/MW-day with 20te is $175/MW-day a

w allows units to use aoric data is available.sted to 20% for the fiereafter. By the “Calys used. .

rtion, the capacity pa.001 to $0.007 per kWon because utilities re

ing forecasts assumehistorical prices, plusprojected, One varia

e 2.5% rate is conservk 2012 project faster

” method assumes 2.0is revenue pattern allcrease slower than inf

Project Finance

merchant basis, to the ut may be estimated w(Penn-Jersey-Maryla

probably rated BB, depants.

nt is a variable paymeperating expense, andshare of the tariff pay

ured by a PJM Forwaizing either 2.5% escculated COE” methodojected cost and retur

kW-capacity, that is bthe Mid-Atlantic statants an as-delivered cant MW size * 365 d

gions, the rate is $60/M015 environment addeat 2.50% and $240/Ma capacity factor of 1 For this analysis, it wrst two years, with thculated COE” metho

ayment here ranges frWh, so it is less than eplace plant slowly, o

e customized initial ess NYMEX futures pr

able in forecasting is ivative because sourcer energy inflation [19

0% escalation, whichlows, conservatively,flation.

Fav

competitive with a forward and) RTO. espite a

A 2to utidebmigu

ent, paid as d other

yment.

ard Pricing calation or d, the energy rn

sam

based on PJM es, the PJM capacity

days/year * MW-day at er prices. For

MW-day with 3% or actual was assumed he actual od, the actual

rom the one cent.

over many

sam

scalation rices, and with inflation, es like EIA’s ].

h is 2.5% , for the pattern

Sam


25-year Power Purchbe signed with a larg

ility. This contract rebt is rated BBB. In a ight be rated BBB, if

uarantees. me

me

ame.


hase Agreement (PPAge, established, creditduces risk for the prorare instance, a merc

f the developer provid

79

ce

A) is assumed t-worthy oject, such that chant plant des iron-clad

8 80

Parameter

Renewable Energy C(REC) Price

Energy Production aof Expected Product

Section 45 Productio

Principal Repaymen

Cu

Certificate $0pebu ReCrpoor enplano In utireqcehotheREbuRE20tha

as Percentage tion.

10vaapcoan

on Tax Credit Incmi0.0Int

nt of Debt Cuopthe


0.003/kWh or $3.00/Mercent slower than infundled into the tariff p

enewable Energy Cerredits or “green tags”ower produced by a re

separate from the elenvironmental and sociant. If RECs are sold

o longer considered to

those states with Renilities to sell a certainquirements by buyingrtain commercial and

omeowners) voluntarie utility can meet its ECs, then prices tenduy from far out-of-staECs are assumed to b011 price in Marylandan inflation, which is

00%. It is assumed thalue (i.e., what is termpproach to accountingonservative P90 (90%nd financial investors cluded in this analysiix of outside equity in022 per kWh. See httternal Revenue Bulleustomized repaymentperating income. Whee first 10 years, than


MWh, escalating by 2flation). Assume RECprice.

rtificates (RECs), som”, represent the enviroenewable energy planectricity produced byial benefits from 1,00

d separately from the o be green.

newable Portfolio Stan percentage of greeng RECs. A few sociad industrial companieily buy RECs, but theobligation only by bu

d to be higher, on the ate, then prices are lowbe sold at $3/MWh ord. Prices are assumeds 2.0%. at energy production

med P50 – 50% probag for energy producti

% probability of occurmight impose when

is. Paid to the projectnvestors plus the devtp://www.irs.gov/irb/etin: 2012-21, dated t schedule, where theen the PTC is monetiotherwise.

Project Finance

2.0% per year (whichCs are sold separately

metimes termed Reneonmental and social bnt. RECs may be soldy the plant. One REC00 kWh from a renewplant’s power, then t

andards (RPS), whichn power, utilities oftenally-conscious customes, certain schools, a ey are mostly boughtuying in-state or nearorder of $40/REC. Ifwer, on the order of $r $0.003/kWh, whichd to escalate at one ha

n will be at 100% of itability of occurring). on is more aggressivrring) approach that revaluating wind projt’s owners, who are pveloper. For 2012, the/2012-21_IRB/ar07.hMay 21, 2012.

e payment is adjustedized, payments are hi

Fav

h is one half y and not

ewable Energy benefits from d bundled with is the

wable energy that power is

h require their n meet their

mers (e.g., few residential t by utilities. If r-regional f the utility can $3/REC. Here, h is a recent alf percent less

sam

ts projected Therefore, this e than the rating agencies ject financing.

sam

probably some e value is $ html with

sam

d to follow igher during

sam


me

me

me

me


ce

1

2

2

2

Parameter

“Monetized” PTC

Depreciation

Unleveraged Pretax

19 FPL Energy, “FPL20 Doug Harvin and B21 Fitch Ratings, “Fit22 Fitch Ratings, “Fit

Cu

WTaobowfinpo AntheCoopCotha20Hoinc5-ythathaSyFustranPlacoAptheWha

Equity Return Thcobeof paeareq

L Energy announces cBen Cooper, “FPL Etch Downgrades FPLtch Downgrades FPL


When the developer strax Credit “counts” asbtains an ironclad guawners, so they, in turnnancing so that equityortion of the debt pay

n example is that FPLe PTC to FPL Energyompany’s March 200perating wind farms oompany’s related offeat in 2009, FPL Ener

012, Fitch Ratings dooldCo notes to B, beccreased levels of O&year MACRS using hat wind (and solar) enat can be treated as fiystem of MACRS, theurther, Tax Regulatioructures or other comnd thus eligible for theant is 5-year property

omponents (e.g., fencpplying the half-year e annual fractions are

With 50% Bonus Depralf according to the gihe cash flow model uomparison. With no Pe much lower than thef return for this case fassboook savings accoarned on a money marquirement, but occas

completion of subsidnergy National Wind

L Energy Nat’l Wind L Energy National Wi


ructures the project s money with which t

arantee, to provide can, can pay the lender y investors, who are tment from their tax s

L Group Capital uncoy National Wind LLC05 wind portfolio finaof $365 million of “Bering of $100 millionrgy was renamed Nexwngraded the OpCo cause of lower than p

&M, following an intehalf-year conventionnergy plants are consive-year property unde Modified Acceleratns Section 1.48-1(e)(

mponents to be conside same tax treatmenty, but Tax Counsel ming) must take longer

r convention to 5-yeare: 20.0%, 32.0%, 19reciation, half is depriven schedule, but Bo

used here runs a pretaPTC and no debt, the e leveraged equity retformerly was about 4ount, but lately is morket account at a banionally it can become

diary bond offerings,”d, LLC;” Fitch Ratingto ‘BBB-‘and …;” Find OpCo Sr. Secure

Project Finance

o that the Section 45 to repay debt. Either tash equivalent to the Por lenders structure tthe project’s owners savings from the PTC

onditionally guaranteC, in connection withance offering, coverin

BBB-“ -rated notes ann of “BB-“-rated notextEra Energy ResourcSenior Secured notes

projected wind resourermediate downgrade. Section 168 of the tsidered alternative ender the General Deprted Cost Recovery Sy(1) permits “closely r

dered as part of the or. It is assumed all the

might research whether depreciation. r MACRS depreciati.2%, 11.52%, 11.52%eciated in year one anonus Depreciation is ax, unleveraged case apretax, unleveraged Iturn. The minimum a%, as would be earne

ore like 2.0% to 1.0%k. Most cases easily e the tight constraint.

” FPL Energy press regs; New York; March

Fitch Ratings; New Yd …;” Fitch Ratings;

Fav

Production the developer PTC to project the debt will pay a

C.

eed payment of h the Operating ng nine nd the Holding es. 19 20 Note ces. In January s to BB+ and rces and e in 2011.21 22

sam

tax code states nergy property eciation ystem. related” riginal plant e Wind Energy er some

on means that %, and 5.76%. nd the other not used here.

sam

as a point of IRR tends to acceptable rate ed on a

%, as would be exceed this .

sam

elease, Miami FL, Feh 9, 2005.

York; January 25, 201; New York; January


me

me

me

ebruary 23, 2005.

11. y 06, 2012.


81

ce

8 82

Parameter

Positive Before-Tax

Phantom Income, denegative after-tax ca

Cu

x Cash Flow In pobe

efined as ash flow.

Prpriof deontheinvthe


similar fashion, it is ositive. It must exceedecome the tight constrrevent phantom incomincipal repayment, de

f interest, profits are heductible debt principne or the other out of e project takes on lesvestors will refuse toe project to default to


required that each yed zero. For IPP projeraint. me or hold it very lowebt payments are comhigh and taxes are higpal payments are highhis or her pocket. Ph

ss debt. Note that if p make payments and

o the lender. .

Project Finance

ear of Before Tax cascts taking the PTC, th

w. In the latter years omposed mostly of pringh, and at the same tih, so therefore the owhantom income can behantom income is onwill “mail in the key

Fav

sh flow be his can

sam

of debt ncipal and less ime non-

wner must pay e "cured" if

nerous, equity ys,” causing

sam


me

me


ce

One may weighted produce can IOU wconstant-dflow analy Debt covebecause ocoverage merchant below invhedge powrisk mana Lastly, as PTC can btax credit water, a lathe projecregulated worthy. Iftheir tax c 7.7.4 P State propNorth Carto land-bafor a discu

comment upoaverage cost

competitive powith 55% debtdollar discounysis separatel

erage standardof the Power Pcan be somewbasis, which

vestment gradwer prices agaagement.

described prebe converted to cash. That

arge, establishct owners can utility affiliat

f there is no gcredits, and th

Property Tax

perty taxes arerolina, Virginased wind eneussion of state

on a couple poof capital of aower. Given 2at 5.50%, 1%

nt rate is 4.39ly sets out inc

ds for BBB-raPurchase Agrewhat low, at 1is riskier, the

de. To reduce ainst commod

eviously, it isto cash and u

t is, the develohed guarantorpay the lende

te is acting asguarantor, thenhey must prov

es

e set out in Tnia and The Dergy plants, bue and local pr

oints in Tabla typical Inve2.50% inflatio

% preferred st% [1.070/1.0

come taxes.

ated debt finaeement, whic1.5 times averen as discusserisk, a merchdity fuel price

s assumed thaused to pay thoper and his or will provideer. This guaras a developer n the equity i

vide adequate

able 7-13. InDistrict of Colu

ut are sometimrograms bene

e 7-12. For itestor Owned Uon, the discoutock at 5.30%25 -1]. The d

ancing are notch guarantees rage and 1.3 ted, its debt lathant plant’s owes for exampl

at the develope debt paymeor her lender e cash equivalantor may be of wind energnvestors musreassurance t

formation is pumbia figure mes reduced bfiting wind p

ts discount ratUtility that wunt rate is esti

%, and 44% codiscount rate i

t high. For thea price for al

times minimutely would bewners may pule, or they ma

per “monetizeent. Monetizinaccept a guarlent to the PTa utility holdgy projects. T

st agree to paythat the lende

provided on hassessments by state law fower generat

te, this analyswould buy pow

imated to be 7ommon stock is before-tax,

e IPP using Pll the plant’s oum. If the plane rated BB, whut together a say investigate

s the PTC” orng the PTC mrantee that, co

TC to the projeding companyThis guarantoy debt from cer or debt inve

how Delawareand rates. Profor such planttors.

sis employs thwer or would 7.00%, assumat 9.0%. Thebecause the c

Project Financoutput, debt nt sold powerhich is one lesynthetic PPA other financi

r considers thmeans convertome hell or hiect owners, so

y, if a non-r must be creash saved threstors are sati

e, Maryland, operty taxes ats. See Sectio

83

he

ming e cash

ce,

r on a vel

A, to ial

hat the ting a igh o that

edit-rough isfied.

apply on 8

8

T

SD

M

2

2

2

2

84

Table 7-13. Property

State AssDelaware De

locprocerassdiffdat ForCas50%CouSusdistthe

Maryland Bupromoas uat hassAssAsslesssimsim At ow(Noandutil

23 “State Tax Round24 “Delaware Proper25 Ibid. 26 “Report of the M

y Taxes for Wind E

sessment laware is composedal level and tax rat

operty, including rertain state property essments on marke

fferent assessment rtes and different rat

r example, Kent Costle County at 100%% of the 1974 markunty taxes at 100%ssex County taxes atinct School Distric three counties. 23, 2

siness property in Moperty, which are buoveable; as personautility property. Pehigher rates, but somessment. Assessmesessments and Taxsessments are calcus accrued depreciat

milar property, and milar to a stock mar

one wind energy pwned by the site own

on-Utility Generatod interconnect equility personal proper

dup: Delaware;” Bankrty Tax Rates: 2010-2

Maryland Business Tax

nergy Plants in the

d of three countieses. They are genera

esidential, commerctax incentives. The

et value at differentratios. Certain citietios.

ounty taxes at 60%% of the 1983 markket value. However

% of the 2002 assessat 50% of the 2000cts in Cities or unin24

Maryland is classifuildings and heavyl property, which irsonal property andmetimes a fractionents are calculated ation, from Baltimulated based on: 1)tion; 2) market whi3) capitalized incom

rket P/E ratio is app

plant in Garrett Couner and storage buior) are classed as repment owned by thrty.26, 27

krate.com; February 2011;” Delaware Eco

x Reform Commissio

Mid-Atlantic States

. Property taxes areally the same for alcial, and industrial,e three counties bast dates in time and s and towns use mo

of the 1987 markeket value; and Sussr, the town of Milfosment; the town of

0 assessment. Therencorporated areas w

fied in three ways: y fixed equipment ts equipment that isd utility property ar

nal multiplier is appby the state Depart

more or at field offic cost, which is replich is the recent salme, where a multipplied to earnings.

unty in western Maildings owned by theal property. The whe NUG are classed

2, 2009. onomic Development

on,” Chairman Raym

s.

Re levied at the ll types of , except for se their employ ore recent

et value; New sex County at ford in Kent f Lewes in e are over 20 within each of

ATGthC$ Rm

as real hat are not

s movable; and re often taxed

plied to the tment of ces. lacement cost les price of a plier that is

aryland, land he NUG

wind turbines d as non-

Tlain$$stafoa TCtatuC$5

t Office, Industry Res

mond S. Wacks; Anna

Rates About four to five pThese include the CGuard rate, and Vo-he County rate is $0

City rate is $0.49, th0.2666, for a total

Rates vary by schoomust investigate his

The real property taarger County and Cn the City of Gaithe0.112/$100 assessm0.262, for a total otate rate is $0.112 assessment. In Garror Non-Utility Genssessment.

The non-utility persCity/Town/District ax. In Maryland, a urbine and intercon

County, the County 0.530, for a total o0% exemption. In

search & Analysis Ce

apolis MD; Decembe

property tax rates arCounty rate, School-Tech rate. For exa0.3983/$100 assesshe Library rate is $tax rate of $3.7686

ol distract and locats or her location.25

ax in Maryland inclCity/Town/Special ersburg in Montgoment, the County r

of $1.073 per $100 and the City rate isrett County, the statnerators is $0.990, f

sonal property tax icomponents, but th50% exemption ap

nnect equipment. Iny rate is $1.747/$10of $2.277 per $100

Baltimore City, the

enter; Dover DE; Sep

er 15, 2010.

re charged by Delal rate, City rate, Libample, in Lewes in sment, the School r

$0.0467, and the Vo6 per $100 assessm

tion. The proposed

ludes a small state District componenmery County, the s

rate is $0.699, and tassessment. In Bal

s $2.268, for a totalte rate is $0.112 anfor a total of $1.10

in Maryland includhere is no state perspplies to most but nn Gaithersburg in M00 assessment and tassessment or aboue City rate is $5.67

ptember 2010.

aware counties. brary or Crossing Sussex County, rate is $2.567, the o-Tech rate is

ment.

d business owner

component and nts. For example, state rate is the City rate is ltimore City, the l of $2.380/$100 nd the County rate 2/$100

des County and sonal property not all of the wind Montgomery the City rate is ut $1.14 after the 7, for a total of

S

NC

2

2

2

3

3

3

23

3

3

2

State Ass

North Carolina

In NdefRevandsch Thapreestieleplayea(18straSinassene

27 March 25, 2011 p28 Ibid. 29 “2010‐2011 Coun30 “Report of the M31 March 30, 2011 ph32 “2011 Cost Index 2011. 33 March 25, 2011 ph34 Ibid. 35 “North Carolina 22011.

sessment

North Carolina, pofined as public utilivenue. Power plantd are assessed localhedule.

at schedule is the “epared by the Northimate replacement ctric generating eq

ant equipment as hyar life), steam powe8-year life). The assaight-line depreciatnce 2008, North Caessment for solar e

ergy plants or lobbi

phone conversation: P

ty Tax Rates;” MarylMaryland Business Tax

hone conversation: Pand Depreciation Sch

hone conversation: P

010-2011 Tax Rates

wer plants that sellities and are assessets that sell power tolly, as real property

“2011 Cost Index anh Carolina Departmcost new (RCN) leuipment, North Ca

ydroelectric (50-yeaered (28-year life), sessment tends to btion, but adjusted sarolina has applied electric, but no taxpied for tax benefits

PERI and Maryland S

and State Departmex Reform CommissioERI and Maryland Shedules,” North Caro

ERI and North Carol

and Effective Tax Ra

l power to end use ed by the NC Depao a utility are not py, according to a sta

nd Depreciation Scment of Revenue, wess depreciation. Harolina categorizes ar life), natural gasand solar photovol

be based on cost leslightly for trendingan 80% reduction t

payers have yet bui.32, 33

State Department of A

nt of Assessments anon,” Chairman Raymtate Department of A

olina Department of R

lina Department of R

ates;” North Carolina

R$Colod

customers are artment of ublic utilities andard

chedules,” which seeks to

ere, for the types of

s-fired (18-ltaic electric ss accrued g factors. to the ilt wind

InraoF$an$ NT

Assessments and Tax

nd Taxation; Baltimomond S. Wacks; AnnaAssessments and TaxaRevenue, Local Gove

Revenue manager (Ra

a Department of Reve

Rates 5.67/$100 assessm

County, the County f $2.475/$100 asseocations in Marylan

depreciation per yea

n North Carolina, bate. To obtain currer decrease the lates

For example, in Wa0.5340/$100 assessnd the 2010 ratio is1.0801/$100 assess

North Carolina has The proposed busin

xation (SDAT) Super

re MD; February 18, apolis MD; Decembeation (SDAT) Adminernment Division, Pro

aleigh NC).

enue, Policy Analysi

ment or $2.84 after ty rate for Non-Utilitessment or $1.24 afnd, with time, taxaar till it hits a minim

both counties and ment market prices, ast assessment, to obake County, in Waksment, the Municips 1.0346 times, so sment.

over 500 locationsness owner must inv

rvisor (Garrett Co, M

2011. er 15, 2010, pages 8-9nistrator (Baltimore, roperty Tax Section; R

is and Statistics Divis

the 50% exemptionty Generators is $2fter the 50% exemp

able base is reducedmum level of 25%.

municipalities charga sales assessment btain the effective cke Forest, the Counpal rate is $0.5100/the effective comb

with different propvestigate his or her

MD).

9. MD). Raleigh NC; effectiv

sion; Raleigh NC; ab

85

n. In Garrett 2.475, for a total ption. For all d by 5% .28, 29, 30, 31

ge a property tax ratio will increase combined rate. nty rate is /$100 assessment,

bined rate is

perty tax rates. r location.34, 35

ve January 1,

bout early

8

SV

To

3

3

3

3

86

State AssVirginia For

proall assperpregooyeaass

The District of Columbia

For“untaxeneclar

36 March 24, 2011 an37 May 22, 2012 pho38 “Real Property As39 Ibid.

sessment r Virginia, the Stateoperty tax assessmeelectricity generatiessed by the SCC e

rsonal property rateepares its assessmenod factor. Depreciaars. An equalizationessment with that o

r The District of Coniform and accuratexation.” At this poiergy plant is proposrification beyond th

nd May 31, 2012 phoone conversation: PEssessment Process,” T

e Corporation Coment for public servicing plants over 25 Mexcept autos and tre for property assesnt based strictly onation is calculated, rn ratio is applied, toof the region, based

olumbia, the Officee assessments are tint in time, until a psed, the authors of his general goal.38

one conversation: PERERI and Rockingham The District of Colum

mmission (SCC) perce corporations, whMW. All entity prorucks. There is no sssed by the SCC. Tn cost, adjusted by areflecting plant lifeo equalize the utilitd on recent sales in

e of Tax and Reventhe foundation of fapossible site for a lathis report did not

RI and Virginia SCCCounty VA represen

mbia Office of Tax an

Rrforms the real hich includes operty is separate he SCC a percentage e of 20 to 25 ty property

n that region.36

Varao F$pb

nue states that air property arge wind seek further

Fmis

C manager (Richmondntative. nd Revenue, Washing

Rates Virginia charges no ssessment to the coates. Tax rates varyn town or special d

For example, in Lou1.30/$100 assessmroperty tax rate forusiness owner mus

For The District of Cmillion and less is tas taxed at $1.85/$10

d VA).

gton DC, internet dow

o state property tax.ounties which applyy by county. An addistrict.

udon County, the rement. In Rockinghamr 2012 is $0.64/$10st investigate his or

Columbia, commeraxed at $1.65/$10000.39

wnload March 25, 20

. The Virginia SCCy commercial real

dditional tax may be

eal commercial prom County, the real 00 assessment.37 Tr her location.

rcial real property a0. The residual valu

011.

C sends its property tax e charged based

operty tax rate is commercial

The proposed

assessed at $3 ue over $3 million

8.0 Reg With the venvironmthose regunew winddetermineprojects. Wthe ordinaactivities degree to power. Thsuperior wresources differencethe rate an RidgelineCarolina tshed and nconcerns wbelow, actresources Coastal wopportunilimited. Edevelopmensures thissues exa 8.1 Virg Virginia penergy to financial igreater tha(Dominiofor the fordevelopmincentive an additiodoes not pCommonw

40 DSIRE isrenewable eongoing pro41 In this dis

gulatory a

very substantental groups, ulatory and pod projects in the the extent toWhere possibances and statand debates. which the po

his perceptionwind resourceand positive

e in general pnd extent of w

e wind resourcthan in neighbnoise issues awill likely detion at the stain the state.

wind resourcesities for devel

Each state in thment of renewahat they will bamined by the

ginia

provides for athe Common

incentives in an the cost ofn) and Appalreseeable futu

ment of wind pfor independe

onal revenue sprovide an incwealth or else

s a comprehensivenergy and energoject of the N.C. scussion we refe

and Policy

ial assistanceand industry

olicy issues thhe region. Coo which perceble, primary sotutes themselvIn general the

olicies and actn alone is likees. Accordingsupport fromerception of s

wind power de

ces are, for thboring states are likely be otermine whet

ate level in No

s are not well loping wind phe region hasable resourcebe ineffectivee PERI team a

a voluntary RPnwealth’s regulieu of a man

f the RPG thalachian Powerure, this aspecpower by inveent power prostream to sourcentive for thewhere.

ve source of infogy efficiency. Es

Solar Center anr to the District

y Issues

of the Databand governm

hat had substaomplaints and eived barriers ources, such aves, were reviere is a substations of the diely to be a drivly, developer

m the public anstate policy, sevelopment in

he most part, mof West Virg

of more concether ridge lineorth Carolina

understood apower in Nort adopted a RPs, but in most. What followand its consul

PG that proviulated utilitie

ndate, [25] butat to date Virgr Company (Act of Virginiaestor owned uoducers (IPPsrces of renewe developmen

ormation on statestablished in 199nd the Interstate Rof Columbia as

ase of State Iment representantial adverseconcerns raisactually drovas the actual piewed in addiantial differenifferent statesver of future rs are likely tond state and loseveral key issn the region.

more concentinia and Pennern and the ace resources whas effective

and overly broth Carolina anPS or RPG tht of the states

ws is a more dltants.

ides financial s. This prograt the incentiv

ginia’s largestAPCO) have ’s program do

utilities (IOUss) and, as disc

wable energy tnt of new sou

e, local, utility an95 and funded byRenewable Enera state.

Incentives fortatives, team e impact on thsed by partiesve decisions toprinted decisiition to mediance in the percs41 in the regiodevelopment o initially seleocal governmsues were ide

trated in Marynsylvania. Forctions of only

will be developely curtailed d

oad state studnd Virginia sthat is nominal in the region

detailed discu

incentives foam has been ces provided bt utilities, Domchosen to paroes not appeas). However, cussed below,that have been

urces of renew

nd federal inceny the U.S. Deparrgy Council. ww

r Renewable Emembers set

he potential fos were investio build, deferions of regulaa and other acception of maon are supporas no state in

ect locations wments. In additentified that a

yland, Virginir this reason,

y a few countiped. In additiodevelopment o

dies have suggtate waters arelly intended ton, the design oussion of the m

or the purchascriticized becby the programminion Electrrticipate. Accar to be a barrthe program p, the programn in existence

wable energy

ntives and policiertment of Energy

ww.dsireusa.org

Energy (DSIRout to identif

or developmeigated to r or abandon atory agenciesccounts of ongany parties ofrtive of wind n the region hwith good wintion to this

are likely to im

ia and North potential view

ies regarding on, as explainof ridge line

gested that e extremely o encourage tof these progrmore relevant

se of renewabcause it providm are so mucric Power ordingly, at lerier to provides no d

m merely prove for decades,in the

es that promote y, DSIRE is an

87

RE),40 fy ent of

s and going f the

has nd

mpact

w these

ned

the rams t

ble des h

east

direct ides , and

88

Virginia lmillion foprogram. create 30 jgenerationshould bewho manualso has thvariety ofHowever,much prac Virginia da public bpower to tCo-operatcustomersProgram.”per kWh; kWh for eEnergy Cresidentiamaximumpurchasinstandards Virginia’sthe use ofPlan speci “[ en te The 2006 ”[ di of coand “[ ag ac or

42 The progr43 Not availakW are char

aw also provior wind and soThis incentivjobs in the Con equipment m noted, howevufacture equiphe legal authof projects that , to our knowlctical assistan

does not provbenefit fund totwo electric ctive, that servs to TVA’s “G” The former while the latt

energy that caertificates (RE

al and non-resm generation ong 100 percen

and a model

s “Commonwf coal, naturalifically establ

[s]upport resenergy sourcesechnologies th

Virginia law

[a]ll agenciesiscretionary af the Commoonsistent ther

[t]he Commogencies and pction with regr override any

ram is subject toable to customerrged transmissio

ides for a poteolar equipmen

ve is availableommonwealthmanufacturerver, that the ipment used toority to arrangtheoretically

ledge, this funnce to a utility

ide personal, o support winco-operatives,vice very smalGeneration Paprogram wouter program oan be resold toECs). In addi

sidential renewof the affectedt renewable ezoning ordin

wealth Energyl gas, oil, nucllishes a policy

earch and devs” and to “[p]hat do not con

w further provi

and politicalaction with renwealth Ener

rewith”

nwealth Enerpolitical subdigard to energyy contrary pro

o the further discrs of municipally

on and distributio

ential42 Cleannt manufacture to wind powh. The investm

rs are substantncentive applo produce enege for low-int could includnd has never y-scale projec

corporate or nd power proj, the Powell Vll areas in souartners Prograuld pay small offers larger go TVA’s custition, Virginiawable on a “fd utility43 andenergy. Virginance to assist

y Policy” codilear energy asy for the Com

velopment of, romote the gentribute to gre

ided that

l subdivisionsgard to energrgy Policy and

rgy Policy is iivisions of they issues, and sovision of app

retionary provisy owned utilitieson system fees. N

n Energy Manrers and biom

wer equipmentment and job tially greater lies to the “prergy from bioterest state bo

de wind generbeen employ

ct.

sales tax relieects. The Ten

Valley Electriuthwest Virgiam” and “Midgenerators (u

generators (uptomers as “grea provides forfirst-come, fird mandates thania has also pt localities in p

ified in 2006, s well as rene

mmonwealth t

and promoteeneration of eeenhouse gase

s of the Commgy issues, shald where appro

intended to pre Commonweshall not be cplicable law.”

ion of funds by ts. Residential cusNet excess gener

nufacturing Inmass producert manufacturethresholds fothan for wind

roducers” of bomass. The Viond-backed loration of poweed for this pu

ef for wind ponnessee Valleic Co-operativinia. These end-Sized Reneup to 50 kW)p to 20 MW) aeen energy” ar a modest prorst-served” baat utilities pro

promulgated rpermitting w

is an “all of tewable energyto

e the use of, reelectricity throes and global

monwealth, inll recognize thopriate, shall

rovide guidanealth in takingconstrued to a”

the Legislature.stomers with a gration is sold to

ncentive grantrs, over the sixers who invesor biomass prd equipment mbiomass, not mirginia Resou

oans to local aer by the loca

urpose and is t

ower projectsey Authority (ve and the Apntities providewable Standaretail electrican average prand the associogram of net

asis, of up to 1ovide consumreasonable intind power fac

the above” ply and energy

enewable ough l warming.” [2

n taking he elements act in a mann

nce to the g discretionaramend, repeal

generating capacthe utility on an

t, capped at $x-year life of st $10 millionoducers and smanufacturersmerely to tho

urces Authoritauthorities foral governmenttoo small to b

s and does not(TVA) providppalachian Ele access to theard Offer c rates plus $0rice of $0.055iated Renewametering of

1 percent of thmers the optionterconnectioncilities.

lan that promoconservation

26]

ner

ry ,

city of greater tha“avoided cost”

$36 f the n and solar s. It

ose ty r a t. be of

t have des ectric eir

0.03 5 per able

he n of

n

otes . The

an 10 basis.

The Commpolicy; in"permit bypermittingthe permitother minestablishesite plannThe permstreamline However,generationone by thesubsequendevelopm 8.1.1 R The RPG 2017 the gwhich owsales. Undsuch as D0.5 percenthe Virginnet presenperformanvalue of $the bonus(to which In its appllargely thrTier II REbeneficialPortfolio pTier II REpre-existinwhile it mintended texisting hthrough 2

44 It should goals are mo45 Estimates(Nov 20, 2046 Based on 47 Virginia’s48 Tier 1 RE.

monwealth hacluding estaby rule" applieg requirementt by rule callsimal requirem

es reasonable ning, public pa

mit by rule incles the process

, notwithstandn and the adoe State Corpontly adopted p

ment of wind p

Renewable P

goal throughgoal increases

wns substantiader the statuteominion are ent rate of retunia State Corpnt value of $3nce bonuses a$987 million t will rise withthe increasin

lication [27] trough existin

ECs. Tier II Rl that Tier I soprograms. It s

ECs, the valueng Tier I REC

might constructo purchase T

hydropower ge025 was $7.9

be noted that beore modest than s provided in Sta009) and in Dom

2005 data respes hydropower ge

EC prices are sub

as taken a numblishing a streaes to wind enet on projects os for notifyingments. For prorequirementsarticipation, pludes projectss for addressin

ding Virginiaption of an ef

oration Commproscriptive zpower in Virg

Portfolio Goa

h 2016 is set as to 7 percentl nuclear resoe, all costs, inentitled to rec

urn on equity. poration Com30 million th

and penalties through 2025h the increase

ng goals are ap

to participate g47 in-state hy

RECs are geneources and theshould be note of even TierCS are allowect new renewa

Tier II RECs theneration. Do

9 million, com

cause a substantit otherwise mig

ate Corporation Cminion’s applicatiecting Dominioneneration has an bstantially less to

mber of usefuamlined permergy projects of less than 5g the Virginiaojects exceedis for potentialpermit fees, ins located in stng those issue

’s codified pofficient permi

mission, the otzoning regulatginia.

al (RPG) Pro

at 4 percent oft and in 2025 ources, the tarncluding Rec acover all of thFor Dominio

mmission staffhrough 2025. Tthat could eit. As the Dom

e in equity helpplied) is fixe

in the prograydropower reerated by soureir use is consted, that whiler I RECs is ined for compliaable generatiohroughout the

ominion estimmpared to $22

tial portion of theght appear. Commission stafion.

n’s capital base.average age of a

oday than at the

ul and potentimitting mecha

less than 10000 kW; for pr

a Department ing 5 MW anl environmentnter-agency cotate waters fores.

olicy of suppoitting mechanther by severations, have cr

ogram Desig

f the non-nuclto 12 percent

rget through 2and administr

heir costs of pon, the “bonusf45 to amount tThe SCC stafther eliminate

minion system ld by the comed at 2007 gen

am, Dominionsources, supprces that are gstrained or pre there is a di

nsufficient to iance with theon if market ce life of the R

mated that the 21 million for

e electricity sold

ff review of Dom

approximately 7time of Dominio

ially importananism. The pe0 MW. The rurojects more tof Environm

nd up to 100Mtal impact anaonsultations, r wind farms

orting and facnism, several al political subreated substan

gn

lear44 2007 sat of non-nucle2016 translaterative expense

participation ins” for participto nominally ff also pointede the bonus or

m grows over tmpany, even th

neration leve

n acknowledgplemented as generally conrohibited in a fference betwincentivize ne

e RPS or RPGconditions waRPG program

net present vTier I RECs4

d in Virginia is g

minion’s applica

70 years. on’s application

nt steps to impermit regulatioule places no ethan 500 kW

mental QualityMW, the permalysis, mitigacompliance aless than 100

cilitating new sets of discre

ubdivisions ofntial barriers t

ales of electriear 2007 saleses to 2.7 percees are reimbun the programpating has bee$39 million p

d out that the r increase it tothe next 13 yehough the “bals.

ged that it wounecessary by

nsidered less enumber of R

ween the valueew renewable

G. Dominion iarranted doingto fill any sh

value of the us48. Thus, the f

generated by nuc

ation; Case No. P

.

plement this on, known as environmentaand up to 5 M

y and imposesmit regulation ation plans, faand enforcem0 MW, and

wind power tionary action

f the state thatto the

city in the stas. For Dominent of total 20

ursed and IOUm and an addien estimated bper year46 andstatute provid

o a net presenears, the amouaseline” gene

uld meet the gy the purchaseenvironmenta

Renewable e of Tier I ande developmenindicated thatg so, the comp

hortfall from se of Tier II Rflaw in the de

clear power, Virg

PUE-2009-00082

89

al MW, s

acility ment.

ns; t

ate. In nion, 007 Us itional by d a des

nt unt of ration

goal e of ally

d nt if t, pany

RECs esign

ginia’s

2

90

of Virginiprioritizesthat have millions oneed an inreturn on 8.1.2 A At about tparticipatethat two pprudent” mas other gthe RPG wwould be renewableit would buse of Tieutilized [2unreasona

“Flothac

This decislarge rate violationsthat “… wto serve cuin Virginicost of anrenewablerelease thelevel was Energy (Cwhat the rsubstantia A bill wasCorporati

49 http://ww50 “The Comreflected in without signstatute.” Or 51 Here, howoffsetting be

ia’s RPG progs the use of woccurred dec

of dollars fromncentive to opequity, but is

Appalachian

the same timee in the RPG

power purchasmeans of com

generation souwere not miniconsidered “r

e generation tbe needed to mer II RECs, ho28]. Notably, able, but held

For example, ow when comhe Commissioctions incurrin

sion may be oincreases nee

s of the Cleanwe do not, by ustomers” ania. However,

ny new sourcee energy genee terms of thedetermined t

COE) for windrate increase fally higher tha

s introduced ion Commissi

ww.scc.virginia.gmpany's evidencthe statute.” “He

nificant offsettinrder, p. 11 (emph

wever, the new penefits and, furth

gram is not thwhat are know

ades earlier. Am ratepayers tperate and an unlikely to in

Power Com

e the State Coprogram, APse agreements

mplying with turces). The Coimums to be mreasonable anthat was not nmeet the goal olding that whthe Commissthat this ques

even if a utilmpared to otheon to find thatng such cost.”

one where “baeded to install

n Air Act, a fathis Order, in

nd the Commigiven the larg

e of renewableeration compae APCO PPAo be impruded power compfor the consuman that of Tier

in the Virginiion to conside

gov/pue/renew/apce shows that theere, however, th

ng benefits and, fhasis added)

proposals would hermore, are not

he fact that it wn in emissionAs a consequto operators oeven larger ancentivize ne

pany (APCO

orporation CoPCO submitteds (PPA) for nthe RPG (as rommission remet and exceend prudent” unneeded to mee

established fhere a lower csion did not fistion was not

ity shows thaer high cost ret such cost is ”

ad facts makel pollution co

act noted by thndicate that wission has appge price differe energy, it isatible with the, and therefor

ent. It should bpared to fossimer would ber II RECs.

a legislature ter the codified

pco_renew_09.pese PPAs are note new proposalsfurthermore, are

exacerbate an alt needed at this ti

is voluntary, ns trading circence, Virgini

of existing renamount to the w wind or oth

O) State Cor

mmission wad its applicati

new wind powrequired by thejected APCOeded, but capnder the Comet the currentlfor later yearscost method oind that the codispositive.

at the cost of ienewable resoreasonable or

e bad law” as ontrol equipmhe Commissio

wind power caproved proposrential betwees hard to image RPG prograre, wind powebe noted that il-fueled or nue. It merely de

to correct thisd Virginia En

pdf t needed at this ts would exacerba

not needed at th

lready difficult rime to meet volu

but the fact thcles as “anywa’s RPG prognewable geneparticipating

her renewable

rporation Co

as reviewing Dion to the Com

wer generationhe statute for O’s request anps on the amoummission’s ruly applicable s. The Commiof complianceost of energy

its proposed rources, the star that it is pru

APCO had rement and resolv

on in its Ordeannot be part osals from IPPen the marketgine the Commam unfortunater developersthe Commiss

uclear generaecided that th

s situation bynergy Policy w

time to achieve tate an already dihis time to meet

rate environmentuntary RPS goal

hat it not onlyway credits” – gram will tranerating facilitig IOUs in the e power proje

ommission D

Dominion’s ammission forn were “reasonew renewab

nd determinedunt of renewales [28].49 Thgoal50 was noission also noe is available,in the propos

renewable resatute does notudent for a uti

ecently requeve the compaer.51 The Comof a portfolio

Ps to build wint value of Tiemission will ftely. The Coms do not even sion did not reation and did nhe cost of the

y specifically rwhen conside

those goals undeifficult rate envirt voluntary RPS

t for customers wls under the statu

y allows, but credit for act

nsfer many ies that do notform of bonuects in Virgin

Decision

application to r a determinatonable and ble energy as wd that the goalable energy th

hus any new ot prudent, evoted Dominio, it must be sed PPAs was

source is t require ility to take

ested and receany’s ongoingmmission asse

of energy sond power projer II RECs andfind any new mmission did know what peview a Cost not determinePPA was

requiring the ering such ma

er the time frameronment for custgoals under the

without significaute.

tions

t us nia.

tion

well ls of hat

ven if on’s

s

eived g erted urces jects d the

not price

of e

State atters.

e tomers

ant

“I ca co or §§ However,resourcesamended. Several stnot adequCommissiof one or a noticeabCommissielsewherehigher thaemploy thstandard ffrustrated 8.1.3 Z Local opppower in ttime and cgenerationevaluate othose whoregion, eacommercisetting. Towelcome adverse im Almost alstrong winyears devVirginia. ordinancePennsylvafairly narrTrail and lower Chedecided bCounty, pof wind pcommerci

In determininapacity to its onsider the exr by contract,§67-101 and

, this bill was s is likely to re

tate observersuate to addression was alreamore 100 MW

ble increase inion that where in the countran fossil-fuelehe price of Tiefor what costsand millions

Zoning Ordin

position to newthe Mid-Atlancost of addresn and render aor address envo oppose windarly projects, iial-scale windoward this ensensible sitin

mpact on the c

ll of the lowernd resources, elopers have In response to

es. Virginia’s ania, West Virow band andNational Foreesapeake Bayy a relativelyrovide for senower [29]. Otial wind powe

ng the reasonacustomers fro

xtent to which, further the o67-102.”

amended to aesult in unrea

s and develops the problemdy obligated W wind farmsn utility rates e the cost of ary, that projeced generation er II RECs fros may be consof dollars of

nances

w wind powentic area. Evessing challenga project econvironmental id power genein particular, d farm is an innd wind poweg and noise recommunity an

r elevation prand so this isexpressed into this expressridgeline and

irginia or othed developable ests. Coastal r

y or Atlantic Oy small numbensible setbackther ordinancer developme

ableness or prom renewableh such renewaobjectives of t

also require thasonable incre

ers believe thm, especially s

to consider ths to Virginia’and so, this aa proposed prct should be aor the purcha

om existing ssidered reasonf ratepayer’s m

er projects canen if local oppges raised by nomically unvssues, the eve

erally. If windmust be good

ndustrial enteer developers egulation andnd the enviro

roperty in Virssue does not terest in a numsion of interesd coastal winder states. In Vsites are furth

resources are Ocean. Thus, er of countiesk and noise cones, such as th

ent.

rudence of a e energy resoable energy rethe Commonw

he Commissioeases in rates

hat, because osince under thhe Commonws energy pool

amended langroject is consiapproved, evease of RECs. ources (or Tienable and prumoney will be

n be a significposition is unopponents caviable. Moreoent is widely pd power is to gd neighbors. Drprise that oft(and early wi

d should adoponment.

ginia, except affect most o

mber of potenst, a number od power resouVirginia, high her constraineavailable onlthe future of . Some ordinantrols that reg

he ordinance a

utility providources, the Coesources, whe

wealth Energy

on to consides paid by cons

of this amendmhe 2006 statutwealth Energyl of 25,000 M

guage may be istent with simen though the If, however, er I RECs fro

udent, Virginie wasted.

cant barrier toable to stop a

an significantlover, when a publicized angain public acDevelopers shften must be loind power dev

pt conservativ

along the coaof Virginia’s cntial ridge lineof Virginia cources are not nvalue ridgelined by Nationaly in those comuch of Virgances, such agulate, but nonadopted by Ta

ding energy anommission shaether utility-oy Policy set fo

er “whether thsumers” and

ment, the revite the State Coy Policy. HowMW of capacit

sufficient to milar renewabcost of electrthe Commiss

om such sourcia’s Energy P

o the developma project as a mly increase thdeveloper fai

nd becomes grcceptance in thould understocated in a pavelopers in pa

ve designs tha

ast, does not hcounties. Ovee and a few coounties have enearly as dispne sites are coal Park land,

ounties that arginia’s wind pas that enactednetheless permazewell Coun

nd all owned orth in

he costs of sucpassed as

ised legislatioorporation

wever, the addty will not leasignal to the ble projects ricity may be sion continuesces) as the olicy will be

ment of windmatter of law

he cost of ils to properlyrist for the mithe Mid-Atlantand that a astoral or ruraarticular) shou

at minimize an

have sufficiener the past 10 oastal locatioenacted zoninpersed as thosoncentrated inthe Appalach

re adjacent to power will bed by Roanokemit, developmnty, effectivel

91

ch

on is

dition ad to

s to

d w, the

y ill of ntic

al uld ny

ntly

ons in ng se in n a

hian the

e e ment ly bar

92

Historicalalmost allCommonwenergy facthe Commsolar facilCommonwprovisionsincluding decommismodel zonappears toCommonw Floyd Couproposed,statutes anCommissiVirginia. greatest co While locforward, ithere are nthat is gengovernmecollaboratmany Virgimprove, that wind gain accep 8.1.4 V As noted ridge line economicResourcesChesapeakCommissiChesapeakresource. report; theaccordingChesapeakcompreheadditionalsuitable fo

52 Id.“Any m

lly, the Virginl situations, inwealth passedcilities that ge

monwealth Enlity while prowealth to proms establishingprovisions lim

ssioning. In Aning ordinanco exempt thoswealth’s 2006

unty likely ha, and is currennd effectivelyioners on thisIn contrast, Aoastal resourc

cal zoning ordit is still premno commercianerated by opent has attemptive fashion toginia countiesthere will likepower can be

ptance in cou

Virginia Marin

earlier, muchsites in weste

cally viable ws Commissionke Bay and ition determineke Bay. The pHowever, a de analysis doe

g to the reportke on further

ensive review l studies woulor developme

measures requir

nia state govencluding the sd a statute [30enerate electrnergy Policy, viding for themote the gene

g reasonable rmiting noise,

April of 2012,ce to assist locse zoning ordi6 Energy Poli

as greater winntly contemply bar any coms issue will haAccomack Coces, has been

dinances havemature to state

al scale wind ponents of wipted to addreso develop a res that are willely be some we a good neig

unties that curr

ne Resource

h of central Viern Virginia, ind resourcesn (VMRC) tots environs. Ined that existinpublication ofdetailed reviewes not supportt, may prove treview. The of the underl

ld need to be ent. For the m

ed by the ordina

ernment has bsiting of fossi0] requiring thricity from wiprovide reasoe protection oeration of enerequirements u

requiring buf, the Commoncal governmeinances that hicy.52

nd energy resolating, a zonin

mmercial scaleave a significaunty, one of tsupportive of

e clearly blocke that this issu

farms in the ind energy; soss the concerneasonable moling to acceptwind power dhbor that conrently do not

es Commiss

irginia does nonly the lowe

s. In 2009, the determine th

n a widely disng competing f this report ew of this repot this conclusto be appropristudy was nolying issues aconducted be

most part, the V

ance shall be con

een highly del fuel-fired pohat any local ond or solar re

onable criteriaof the locality ergy from winupon the sitinffer areas andnwealth, workents in addresshave already b

ources than anng ordinance e wind power ant impact onthe two Virgif the developm

ked several wue will be a sigCommonweaome degree ons of opponenodel ordinancet wind power.evelopment. D

ntributes to ecpermit comm

ion Report

not possess deer Chesapeake Virginia leghe feasibility osseminated anuses ruled ou

effectively endort reveals thaion. Indeed, tiate locationst sufficiently

and so it is notefore large areVMRC Repor

nsistent with the

eferential to loower plants. Hordinance addesources be coa to be addres in a manner nd and solar rng of any suchd setbacks, anking with locasing these issbeen adopted

ny other ridgethat would ig

r developmentn the prospectinia eastern shment of wind

wind power prgnificant barr

alth and, with of skepticism nts by workine to address l. Therefore, oDone properl

conomic growmercial scale w

evelopable wike Bay and adjgislature direcof leasing statnd quoted reput any commeded any consiat, while this the report idens for the devel

funded by tht surprising theas of the Chrt provides on

locality’s existin

ocal zoning dHowever, in 2dressing the sonsistent withssed in the sitconsistent wi

resources; andh renewable e

nd addressing al governmen

sues [31]. Howd even if they

eline county. gnore both thet. The decisiots of ridgelinehore counties d power.

rojects in Virgrier over the l

h the amount ois to be antici

ng with local gocal siting iss

once economily, this develo

wth in the regiwind power.

ind resourcesdjacent lands hcted the Virginte-owned bot

port [32] publiercial scale wideration of thconclusion isntifies a numlopment of w

he legislature that the report

hesapeake counly a superfic

ng ordinances.”

determination2011, the siting of renewh the provisioting of any wiith the goals od include energy facilitygeneration fa

nts published wever, the stacontravene th

The County he 2006 and 20on of the Coune wind power

likely to hav

ginia from golong term. Asof misinformaipated. The stgovernments sues, and theric conditions opment can shion and thereb

. Other than thave potentiania Marine ttomlands in tished in 2010

wind farms in he use of this

s stated in the mber of areas twind power in

to attempt a concludes th

uld be declarecial examinati

s in

wable ons of ind or of the

y, acility a

atute he

has 011 nty in

ve the

oing s yet, ation tate in a re are

how by

the ally

the 0, the the

s

that, the

hat ed ion of

potential ia tiering oillustratio The Repo “[

anF

The Commin an EastOcean fromost of thThe harboused by reVirginia pOnancock“shippingbars and sbe undersapart and harbors ofmore thanshallower The VMRunexplodewith militThese areBut the Uand local military wwhere turbradar interMaryland

issues and conof areas wherens most clear

ort identifies “

[a]reas for whnchorages, macility range,

mission’s mapt-West directiom the back bhe claimed “shors that are seecreational boportion of the k and Puncoteg lanes” identishifting channtood that the pose no threaf the lower Ban 100 feet deer waters are re

RC Report alsed ordinance tary, FAA andas include the

U.S. military, wgovernments

would object tbines can interference areas

d, Center for I

nflicts that we more extensrly reveals the

“Excluded Ar

hich there is ailitary securitBaylor Grou

p of these areion between thbays of the eashipping lanes

erved by theseoaters and smEastern Shor

eague Creek aified on Virginels that can bindividual tur

at to the navigay. The main

ep. The main eadily availab

o excludes lain some areasd weather rade approaches with its own rin addressing

to the siting oerfere with ras are clearly dntegrative Re

ould need to bsive review we short comin

reas” (Figure

a legally definty and trainingunds (public o

eas identifieshe Bay’s eaststern shore. As” are unmarke “shipping la

mall fishing crare is at Cape Care deep enouinia’s Atlanticbe navigated brbines in a wigation of smanorth/south s

shipping chanble.

arge areas unds of the Bay.

dar signals canto Norfolk an

renewable eneg such issues,

of any wind fadar. In contradefined and thesearch [34]. T

be addressed would be requ

gs of the repo

8-1), which i

ned use or prog areas, FAA

oyster grounds

a large numbtern and weste

A review of thked open wateanes” are oftenaft, not “shipsCharles Town

ugh to supportc coast are geby small, shalind farm are tller vessels sushipping channnel would no

der the headinThere also arn be disruptednd Patuxent Nergy goals [33, and there is arm in Chesapast, within theheir basis is eThat report su

as any projecuired. Examinort.

it defines as:

otection such A restriction ar

s) and private

ber of what it ern shores an

he nautical chers that are ton less than sixs.” The only sn, while a cout occasional b

enerally smallllow draft, botypically spacuch as those cnnel of the Baot be consider

ng of “Militarre areas whered by reflectedNaval Air Stat3] has been gno indicationpeake Bay boe State of Marexplained in auggests poten

ct proposed fonation of sever

as navigationreas, the NASe shellfish lea

styles “shippnd eastward inharts for the aro shallow forx or eight feesignificant hauple of creeksbarge traffic. l ocean inlets,oats, not shipsced approximcapable of usiay is clearly mred for a wind

ry” and, indeee the potentia

d signals fromtion further n

generally coopn in the Reporottomlands, exryland, milita

a report by Unntial mitigatio

or these areasral of the repo

n channels anSA Wallops Fases”.

ping lanes” thnto the Atlantrea reveals thr ships to enteet in depth andarbor on the s, such as the Similarly, the, guarded by ss. Here, it sho

mately 1000 yaing the small

marked and ofd farm where

ed, there is al for interfere

m wind turbinenorth in Marylperative with rt that the U.Sxcept in areasary and weathniversity of on measures.

93

s and ort’s

d Flight

hat run tic

hat er. d are

e sand

ould ards

ften e

ence es. land. state

S. s her

94

Figure 8-1.

The VMR“major co “w

dewbaduovcrwbe

There is liCarolina, portrayed conflictedrecreation

53 Actually,

VMRC Report

RC Report theonflicts.” Maj

where there aevelopment. E

with depths lesarrier islands,ue to the largverwinter in trab spawning

well as high coeaches.”

ikely to be soNew Jersey ain the VMRC

d both becausenal use.

the VMRC desi

t Excluded Are

en identifies aor conflict (F

are significantExamples of ass than 2 mete, and areas aloe number of sthe area. This and nursery

ommercial shi

ome conflict wand elsewhereC report. The e it is environ

ignates all water

as

an additional bFigure 8-2) ar

t use or resourareas suggesters,53 includinong the coast species and in area includesareas and fishipping and re

with migratorye have shownpolicy expert

nmentally sen

rs less than two m

broad swath oreas are define

rces conflictsted for this cang the Easternthat are of co

ndividuals thas much of thehery, marine mcreational use

y bird flywayn, such conflict also notes th

nsitive and bec

meters deep as m

of the lower Ced by the Rep

s that would aategory includn Shore lagooontinental andat migrate throe Bay mouth tmammal and e areas includ

ys along the ccts are unlikelhat the VMRCcause there is

major conflicts.

Chesapeake Bport as those a

appear to precde sensitive shon system behd global impoough this corthat overlaps turtle migrat

ding those nea

oastline, but aly to extend aC Report asses high comme

Bay that contaareas

clude wind enhallow water hind Virginia’ortance to birdrridor and or is near bluory corridors ar recreationa

as studies in Nas broadly as erts that this aercial shippin

ains

nergy areas ’s ds

ue as

al

North

area is g and

Figure 8-2.

Next, the defined aspossibly bthat are alis far morCommissiand bluefiIsland woper squarefoundatiobeneficial

Figure 8-3.

VMRC “Majo

Report identis “areas wherbe consideredlso dredged tore substantial ion believes t

fish managemould pose a coe mile of bottn based strucl havens for fi

VMRC “Mode

r Conflicts”

ifies areas thare there appead suitable for lo provide sandthan a typical

that a wind faent areas that

onflict with retomland and ttures that turb

fish and crusta

erate Conflicts”

at it deems to ars to be someleasing.” Thed and that incl wind farm. T

arm would pot it identifies oegional birds. that a numberbine and simiaceans.

”

have “modere use or resouse areas inclu

clude the CheThe Report dse a significanor how it deteWe note that

r of studies frolar foundation

rate conflicts”urce conflict, bude “blue crabesapeake Bay does not provint post-constrermined that at wind farms hom Europeanns and scour

” (Figure 8-3but with furthb spawning anBridge Tunn

ide a statemenruction conflia wind farm shave a relativ

n offshore winreducing ripr

). These areasher analysis mnd nursery ar

nel, a structurent of whether ict with the fisouth of Tangvely small foond farms and rap provide

95

s are might reas” e that the

infish gier otprint other

96

After thesThe Repodetailed efact, theseof the CheBay), theshave Classimply dis

“[ofinpr

This conc“some” coresult, thescale wind

Figure 8-4.

Attemptinthis reviewthe limitedgenerally airborne dmining, p

54 This is pa55 The reporline near theand Yorktow

se exclusions,ort defines “lenvironmental

e areas are deesapeake Bayse areas are lass 4 wind resosmisses these

[w]hile there f wind projecndustrial scalerojects except

clusion ignoreonflict, but foe reported cond generation i

VMRC “Lesse

ng to resolve tw. However, d review of thquoted as the

deposition of rocessing and

articularly true ifrt also errs in faie “lesser conflictwn, VA.

, there remainsser conflict al and use analemed by the C

y (south of Smarge enough tources. Howeve sites:

may very wects it is unlikee projects, nort in the Virgin

es the potentiaound by the Cnclusion of thin state-owne

er Conflict Area

the policy issuthe potential he issues affoe conclusion onitrogen in th

d transportatio

f one properly scling to identify ot” areas on the w

ns what the VMareas” as “arelysis will be nCommission

mith Point in to support comver, having id

ll be areas in ly there will br does it appenia Beach are

al for developCommission as

e VMRC is thed bottomland

as”

ue of whethervalue of the r

orded by the 2of the Commihe Bay and reon activities.

cales the markedother options for

western shore of

MRC identifieas that may bneeded beforeto be potentiathe vicinity ofmmercial scaldentified thes

state waters tbe large areasear the electricea.”55

pment of the ms potentially shat there is nods in the Ches

r to exploit thresource is too2010 VMRC Sission. Amonduces runoff There is a sig

d navigation chanr transmission ofthe Bay and the

ies as “lesser be suitable foe permits and ally suitable. f the Rappahale wind devele areas as pot

that are potens with suitablecal distributio

much larger asuitable for leo potential forsapeake Bay.

he available reo significant Study and the

ng its other attto the Chesap

gnificant diffe

nnels for small bf electricity genetransmission ca

conflict areasor leasing reco

leases can beLocated on thannock Riverlopment54 andtentially suita

ntially suitablee wind resouron system is a

areas, designaeasing on furtr developmen

esource is beyto be dismisse unsupportedtributes, windpeake Bay waerence betwee

boats that bisect erated in state wapacity available

s” (Figure 8-ognizing that e issued.” Thhe Western shr and Mobjackd are projectedable, the Repo

e for developrces for large adequate for l

ated as havingther analysis. nt of commerc

yond the scopsed on the basd “finding” thd energy reducatershed fromen identifying

the identified araters, such as a 2 at Calvert Cliff

-4).

hus, in hore k d to ort

pment

large

g As a cial

pe of sis of hat is ces

m coal g

reas. 220 kV

fs, MD

areas whearea mustThe VMRidentify arcommunitwind powVMRC tomore fairl 8.2 Nort The lack oresources is approxiinclude 97invested swind powland use iAttorney North Carauthority However,Several ofCarolina hnot yet ide North CarStandard”12.5 percesources inmeet a tarpercent, uindividuala tax credamount offinancing has also plocalities Duke Powsupport reFederal Prnew windper year57

MW windfor those spremium

56 As of this57 Nominall

ere further wot be excluded RC Report accreas for potenty has accepte

wer developmeo conduct a faly framed for

th Carolina

of wind develthat exist at b

imately 2400 70 MW on thsubstantial fun

wer. It also hasssues. HowevGeneral in 20rolina, and theof local gove

, wind power f these projechas identifiedentified a pro

rolina has esta” (RPS) that oent of 2020 renclude energyrget of 10 perup to $2.5 mill tax credit, u

dit for renewabf the credit. Itfor energy im

promulgated rin permitting

wer has a stanepresents a suroduction Tax

d projects in th7 from any ond farm, it maysources for wfor “green” e

s date, no countyy, 2MW of capa

ork is needed because the c

complishes thntial developmed the judgmeent in the low

ar more thorouVirginia’s re

a

lopment in Noboth ends of tmegawatts (Me mountain rinds to evaluats provided tecver, the interp002 has effecte General Assrnments that

projects havects involve wid a potential wocedure for re

ablished a maobliges the thretail electricity efficiency ancent renewablion per instap to $10,500,ble energy eqt also has estamprovements,reasonable int

wind power

nding offer to ubsidy of 5-10x Credit (if avhe state. Howe source. Thu

y provide a uswhich net mete

lectricity sup

y has adopted a Pacity.

to resolve potcompeting inthe former taskment of wind ent of the Com

wer Bay. Signiugh and balan

esidents and th

orth Carolinathe state. The MW) of potenidges and 143te the availabchnical resourpretation of thtively stoppedsembly has lewas taken aw

e been proposildlife protectwind power resolving the pe

andatory “Renree major invety sales in Nond new renew

bles by 2018. allation, for w, for wind powquipment manablished a loc, including diterconnectionfacilities.

purchase win0 percent of thvailable) wou

wever, the totaus, while this seful incentiveering is less oport the North

PACE financing

tentially comterests are irrek, but not the power on stammission, thuificant additionced evaluatioheir elected re

a is in markedNorth Caroli

ntial wind cap30 MW on-shble wind resources to assist

he 1983 Mound all developmeft this interpr

way by the 200

sed, and are pion issues tha

esource in its ermitting auth

newable Enerestor-owned u

orth Carolina fwables. MunicState law alsoind power uswer used for nnufacturers ofal option56 fostributed gen

n standards an

nd power genehe cost of newuld appear to bal purchase unoffer would ne to distribute

optimal. In adh Carolina Gr

program.

mpeting intereseconcilable anlatter. The leg

ate-owned botus ending anyonal resourceon of the issuepresentative

d contrast to thina State Enerpacity in Northore and in sources and the local governm

ntain Ridge Pment of commretation intact02 interpretat

proceeding in at are still beincoastal bays ahority of the v

rgy and Energutilities (IOUfrom eligible cipal utilities o provides a ced for a businnon-business f up to 25 percor Property-Aneration wind nd a model zo

erated RECs w wind generbe of some mnder this prognot be of muced wind powe

ddition, customreen Power p

sts, and determnd the earliergislature askettomlands andy discussion os should be p

ues so that thes.

he abundant argy Office estth Carolina. T

ound waters. Nbarriers to de

ments in addrProtection Actmercial wind pt by decliningtion.

several coastng worked thand sounds, bvarious agenc

gy EfficiencyUs) in the state

sources by 2and electric c

corporate tax ness purpose purposes. Thcent, with no

Assessed Cleanpower projecning ordinanc

at $5 per MWation. Togeth

meaningful valgram is limitech use to the der generation mers who elecprogram which

mining that ar use is a priored the VMRCd the user-of the potentiaprovided to the issues may b

amount of wintimates that th

These figures North Carolinevelopment oressing siting t advanced bypower in wesg to reinstate

tal counties. hrough. Northbut apparentlycies.

y Portfolio e to purchase 021. Eligible

cooperatives mcredit of 35 as well as an

he state also glimit on the

n Energy (PActs. North Carce to assist

Wh. This levelher with the lue in stimulad to 5,000 MWdeveloper of ain North Carct to pay a h, for larger

97

an rity.

C to

al for e

be

nd here

na has f and

y the stern the

h y has

up to

must

grants

ACE) rolina

l of

ating Wh a 100 olina

98

sources ofretires the$0.09 per “Generatiserving N One moresystem prvertically Fentress cutilities or North Carwith no liindustrial may be asUnder thi 8.2.1 N North Carexperiencdevelopm[35].58 ThIt further Carolina whydropowprojects orecommenefficiencystated legithe first gbut of the approximsince the p While theregion, Nodevelopmgenerally compliancthe requirwill growof the stanwaste (0.2

58 The progrThus far, pr59 http://ww60 Small hyd61 Thereafte

f renewable ee RECs gener

kWh from thion Partners P

North Carolina

e point, this strovides more

integrated utcase since ther to imbedded

rolina law reqmit on the agsystems up to

ssessed standbs program, ne

North Carolin

rolina’s RPS wced in the desi

ment of new rehe consultant’concluded thawould experie

wer was includor relying on “nded the incluy measures, wislative goal oeneral compl8,600 MW o

ately 8,000 Mprogram was

e percentages orth Carolina

ment, includingfocuses on ne

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separate categfrom solar, wpoultry litterf electricity sercent in 2012large hydroelTier I RECs. solar hot wateby sources locvides for an Aompliance peris $40 per MWenerated elects the ACP is cls also shouldrovides for a 0.55 percent 0, $150, $100falling in receredible incenthorizon for n

d of 2015 to d

er MWh ($0.0ve for the const REC prices r utilities to aACP for sma

to $2 per MWlearly insufficto a legislativ

ference for “agram, but the nerated by ex

very low cost.kWh); but at shed its Renewthe sources opercentage of

decision to em00,000 RECs

s load customersmillion MWh oillion MWh werth inflation, the p

f the RECs need

gories of RECwind, qualifyinr and waste-tosold at retail in2 and remainsectric plants oTier I Solar Rer heating syscated in the PAlternate Comriod. ACP recWh ($0.04 petricity and shocurrently $40

d be sufficientsignificant into 0.9, 1.2, 1.

0 and finally (ent years. Hotive for new s

new commercidetermine if th

015 per kWh)struction of nfrom existing

acquire the neall industrial p

Wh ($0.002 pecient to ensurve determinat

anyway” credMaryland RP

xisting source. The averagean even lowewable Energyf the RECs thf “new” renew

mploy the renein Maryland

(> 300 million Kf total retail elec

re exempt. price differential

ded for Tier I com

Cs – Tier I, Tng biomass, lao-energy electn the state ans at that level of greater thaRECs may bestems commis

PJM service armpliance Penaceipts are useer kWh). Thisould provide

00 per MWh (t during this tncreases in th.5, 1.85, and 2(post 2022) to

owever, there solar installatiial-scale solarhe level that h

). At this levenew large hydg large hydropecessary Tier process load (er kWh) for bre compliancetion to exemp

dits - RECs gePS does not rees that have noe cost of comper cost effectiy Portfolio Stahat were usedwable electricewable resourhighlights the

Kwh/yr) is exemctricity sales in M

al between fossil-

mpliance in 2010

Tier I Solar anandfill gas (mtric generatin

nd rises to 20 puntil the obli

an 30 MW, bue generated frossioned in fisrea, which exalty (ACP) fo

ed to fund rens amount is laa reasonable ($0.40 per kWtime frame. He Solar REC 2.0 percent. Do $50 per MWis a reasonabions at some p

ar installationshas been set w

el, the Tier II Rdropower genepower sourceII RECs for t(IPL) custom

both solar ande, especially wpt those IPL sa

enerated by pequire that REo need of anypliance with tiveness. The Mandard Repor

d for compliancity where therce. A reviewe issue.74 Two

mpt. This is a relMaryland for 20

-fueled electricit

0.

nd Tier II. Tiemethane), ng facilities. Tpercent by 20igation expireut the Tier II om photovoltcal 2012 or la

xtends as far wor sources thatewable projec

arger than the incentive for

Wh); decliningHowever,

obligation, During this timWh. Installed pble probabilitypoint. Given s, Maryland s

will serve its

REC price wieration. Howe

es and should the period unt

mers is set at $d non-solar Tiwith solar REales from the

pre-existing ECs be additiy incentive. Athe MarylandMaryland Pubrt of 2012, [3nce in 2010. Te Maryland R

w of the five o of the sourc

latively narrow 10: 64.1 million

ty and renewable

r I

The 022.72 es in

taic ater. west t fail cts in cost

g to

me, prices y that, the

should

ill not ever, be til the 4 per

ier I EC

RPS.

onal. As a d RPS blic 7]

That RPS

ces

n MWh

es can

were hydr1912; whi1984. With no futo have exsources to Pulp and presidues, cwaste matblack liqumill. Accofor industToday, nerecovery. energy sothe countrpulp and p1940s andprovided The issue “renewabexisting sis a wasteto provideactually uthey serveREC mark It has beenrenewableHowever,maximumRPS and nunknown existing reprogram teffectivendeterminingeneration

8.3.2 S Marylandterms of aMW must 75 http://ww

ropower plantile the Trento

fuel costs and xtremely low o be dispatche

paper mills gecommonly knterial to publi

uor contains mordingly, sinctrial processesearly all blackSince black lurce. Becausery it is not surpaper mills. Td would be buan additional

we raise herele” energy, buources, such a

e of the rate pae a windfall reundermines the to drive the ket is of no us

n argued thate generation w, there is no w

m, and if so, wnot all states aand may be aenewable souto exclude preness of its prong whether itn from existin

State Approv

d’s electricity a PPA in Maryt obtain a Cer

ww.babcock.com/

ts. The Bleweon, NY hydrop

with the majvariable oper

ed and have n

enerate substanown as blackic waters is himore than halfce 1935 pulp as and electricik liquor generliquor is derive substantial qrprising that tThese mills, twurning these mrevenue strea

e is not whethut whether RPas 100-year oayers’ moneyevenue stream

he value of themarket price se in stimulat

this problemwill be absorbway to know wwhen the RPS allow pre-exia large percenurces to partice-existing sougram, while c

t had met its gng sources tha

val Process

market is deryland. Howevrtificate of Pu

/about/history.ht

ett hydropowepower plant c

or capital cosrating costs. Eno need for the

antial quantitk liquor, are highly restrictef of the energand paper mility, and to recrated in pulp aved from wooquantities of tthe other threewo in Virginimill wastes foam from its R

her hydropowPS programs

old hydropowy, since, as them that does noe program. Siof RECs dow

ting new rene

m may be self-bed into the sywhether this swill begin tosting generati

ntage of the tacipate. If it churces from gencontinuing to goal for renewat was “additi

regulated, andver, State law

ublic Conveni

tml

er plant in Nocommenced o

sts amortizedExisting hydroe subsidy pro

ies of the resihighly toxic toed under Fedegy content of tlls have been cover the chemand paper milody materials this waste aree very large sia and one in Por energy as thRPS.

wer or black lishould permier facilities oe Maryland Rot incentivizeince these prewn to the poinwable energy

-correcting, siystem and newsaturation wil serve a position to be usedarget for thoseooses to addrnerating saleacount the pre

wable generational” to that

d so there is nw specifies tha

ence and Nec

orth Carolina operations in 1

long ago, theopower plant

ovided by the

idues from tho aquatic lifeeral and state the wood fed combusting bmicals emplolls is concentrit is technica

e generated atsources of MaPennsylvaniahey have for y

quor-fired geit the use of “

or 50-year oldReport shows, e new investme-existing sount (currently $y developmen

ince at some pw renewable l occur at levtive purpose. d, the availabe states that hress this problable RECs ane-existing rention. Marylanoccurring at

no requiremenat a wind-gencessity (CPCN

commenced 1901 and was

ese hydropowts are routinelRPS.

he pulping proand so the dienvironmentinto the digeblack liquor75

oyed in the purated and bur

ally consideredt pulp and paparyland’s RECa, date back toyears, whethe

eneration shou“anyway” credd paper mills, almost all of

ment. Moreoveurces generate$0.002 per kWnt.

point all of thgeneration w

vels below a stSince not all

ble pool of “anhave an RPS alem, Marylan

nd thereby imnewable energnd could also ithe start of its

nt that the PSCnerating facilitN) from the P

operations ins refurbished

wer plants are ly among the

ocess. These scharge of thal laws. Howster of a kraft5to generate s

ulping processrned for energd a “renewabper mills acroCs are pre-exio the 1930s aner or not Mary

uld be considedits. Allowingto generate R

f the money ger, this practic

e RECs at no cWh) where the

he pre-existingwill be needed

tate’s RPS states have an

nyway creditsand allow prend could revis

mprove the cosgy in Marylaninclude any ns program.

C approve thety greater than

PSC. The issu

105

n in

likely first

is wever,

t pulp steam s. gy le”

oss isting nd yland

ered g pre-

RECs goes ce cost, e

g d.

n s” is e-se its st-nd in new

e n 70

uance

106

of a CPCNissues, incwind farmstatute exefarms recethat will b 8.3.3 Z Many of Mresidentiahave mostwill have wind farmthat requirpropertiesbut has deproject. Apursuing aapplicableauthorizatthree addicomment 400 foot hproposed ordinance

Figure 8-7.

There maycommunitzoning or$4.1milliokW wind

76 Comment77 The count

N is a formal cluding enviro

m and has not empting windeived PSC apbe the path co

Zoning Ordin

Maryland’s coal-scale systemt of Marylanda significant

m was proposered a minimus on the Natioetermined tha

A majority of ta modificatioe to unincorpotion and a buiitional wind fon a propose

high turbine) projects, such

e is adopted as

Maryland Ene

y be greater lties. Somersedinance that son grant fromturbine.

ts are due on Junty is considering

adjudicatory onmental anddenied any ap

d farms of lespproval and haommonly purs

ances

ounties have m. Allegany ad’s ridgeline wimpact on theed to be locat

um setback of onal Registry at the project wthe elected con of the restriorated areas. ilding permit.farms are propd zoning ordifor new windh a requiremes proposed.

ergy Administra

ocal acceptanet County, thespecifies a 75

m the Marylan

ne 15, 2012 g a proposal to in

process that id noise relatedpplications. Hs than 70 MWave been conssued by Mary

adopted windand Garrett Cowind resourcee likely develted in Alleganf 2,000 feet froof Historic Plwas not viablommission ofiction. GarretIn order to in. Garrett Counposed in the cinance that w

d farms in the ent would pre

ation: Counties

nce for comme southernmos50 foot setbacd Department

ncrease the requi

includes publd issues. The However, subW from the CPstructed in M

yland wind far

d power zoninounties are the. For this realopment of mony County, coom the neareslaces. The dee under the C

fficials have st County doe

nstall wind turnty is home tocounty. Garretould establishCounty. It is clude develop

with Wind Ord

mercial scale wst county on Mk77 and the Ct of Energy, i

irement to 1,000

lic participatioMaryland PS

bsequent to thePCN formal a

Maryland. It carm developer

ng ordinanceshe two westernason, zoning countain wind

ounty authoritst residence aveloper has r

County’s restrince been reps not currentlrbines, develoo the Backbott County offh a 5:1 setbac not clear whpment, but th

dinances

wind power inMaryland’s ea

City of Crisfielis preparing to

0 feet.

on and addresSC has issued e amendmentadjudicative pan be reasonabrs.

s, most of whirnmost counticonstraints in

d resources in ties adopted aand 5,000 feetreceived a CPrictions and haplaced and thely have zoninopers need onne Mountain

ficials are currck requiremenhether, given this is likely to

n Maryland’s astern shore hld in Somerseo construct a

sses all relevaa CPCN for o

t to the Marylprocess, two wbly anticipate

ich only applyes in the statethose countieMaryland. A

a zoning ordint from school

PCN from the as suspended e developer is

ng ordinances nly grid

wind farm anrently76 solicint (2,000 feet the layout of tbe the result

coastal has adopted aet County, wi300 foot tall,

ant one land wind ed

y to e and es

After a nance ls and PSC, the

s

nd iting for a

the if the

a ith a 750

8.4 Dela Delaware areas withresource hDelawaredevelopm Delaware resources leading wgenerationGovernorcurrent preffective i Delawaregeneratorsnet meteriownership100kW foauthorizedstandard iresidentiaincentives 8.4.1 S Delawareare subjeca PPA bethigher thalegislaturestates (e.gpromulgatstatute speRequireminstall a sifor the mowhich no 8.4.2 D DelawareThe desigcompeting 78 Developm(PTC) and t79 Under thlines and thelocation alo

aware

has a long cohin a reasonabhas been the s’s modest, bu

ment of wind tu

has providedin Federal w

wind power resn. Based on s, the Delawar

rices.78 Delawin encouragin

’s utilities offs larger than 5ing with excep of the assocor farm customd aggregate cinterconnectioal wind turbins for wind pow

State Approv

’s electricity ct to review btween NRG Ban for fossil fue. The PSC hag., Pennsylvanted reasonablecifically prec

ments for largeingle large (2ost analogousheight restric

Delaware RP

’s RPS is comgn of the RPS g interests.

ment of this projethe DOE Renewae Delaware statue noise limit is nng the property

oastline alongble distance osubject of signut still potentiurbines desig

d significant paters off the Dsearch institupecific directre PSC approv

ware is also a mng the develop

fer small wind500 watts, up

ess generationciated REC. Inmers on residapacity limit on requiremenes, but has nower generatio

val Process

market is regy the Delawa

Bluewater anduel-fired geneas approved pnia, Marylandle siting and ncludes local ger systems hav2 MW) turbines structure in tction was auth

PS Design

mplex and hasrecognizes th

ect is currently sable Energy andute the minimumno more than 5 dline.

g the Atlantic of the coast annificant discually valuable

gned to operat

political, technDelaware coa

utions and is dtion from the ved the first Pmember of Rpment of new

d rebate progrp to maximumn compensatedndividual systential rates anfor this progrnts and has prot addressed lon or equipme

ulated and thare Public Serd Delmarva Peration. Howepurchases of wd) as needed tnoise requiremgovernments fve not yet beee at its camputhe city’s codhorized.

s been modifihe anyway cre

suspended becaud Energy Efficienm setback is 1.0 tdecibels above av

Ocean and thnd in the Delaussion, there h

coastal resoute in lower wi

nical and econast. The Univedeeply involveDelaware leg

PPA for offshGGI and has

w renewables.

rams of $0.30m incentive of d at the retail tem limits arend 2 MW for ram is five peromulgated mlarge scale insent purchases

erefore contrarvice CommisPower for offsever, this deciwind power bto meet Delawments for resifrom adoptingen developedus in Lewes, cde – an electri

ied a number edit issue and

use of the pendinncy Loan Guarantimes the height verage existing n

he Delaware Baware Bay itsehas been relaturces. Howevind ranges.

nomic supporersity of Delaed in efforts t

gislature and whore wind powadopted a hy

0 to $1.25 perf $2,500 per in

rate for the ge set at 25 kWcommercial o

ercent of peakmandatory setbstallations. Des.

acts for the pussion (PSC). Tshore wind poision was effe

by Delmarva Pware RPS requidential wind g more restric. When the Ucity officials tic transmissio

of times sincd provides a c

ng expiration of tntee Program (Lof the turbine (b

noise level up to

Bay and relatelf. While thetively limited er, his may ch

rt for the devaware is one oto advance ofwith the suppwer substantiaybridized RPS

r watt of instanstallation. Thgenerator, whW for resident

or industrial ck demand. Thback and noiselaware does

urchase of renThe Delawareower at pricesectively madePower from f

quirements. Dpower units.7ctive requirem

University of Dtreated the ap

on line suppor

e its initial adcomplicated re

the Section 45 PLGP). base to tip of a bo a maximum of

ively undevele offshore wininterest to da

hange with th

elopment of wof the nation’sffshore wind pport of the ally greater th

S that should b

alled capacityhe state mando retains

tial customerscustomers. The state has adse standards fnot offer tax

newable enere PSC did apps substantiallye by the facilities in otelaware has 79 The Delawments. Delaware soupplication as ort structure –

doption in 200esolution of

Production Tax C

blade) from prop60 decibels at an

107

loped nd ate in he

wind s power

han be

y for dates

s, he

dopted for

rgy prove y

ther

ware

ught to one for

05.

Credits

erty ny

108

At this timcomply wSales to inescalatingrequiremeobligationcurrently The statutschedule gschedule iin the schmonthly b2013, for state instarenewablecustomer- While ACRPS. The the scheduinitially pthe ACP fMWh ($030 percenby retail ethe requirin servicefor complthan 5 per 8.5 Dist The Distridevelopmresidentiasuch as itsenergy. Tprogram ifund, intesaving mewind proj The DistriRPS has ssolar RECannually u

80 Early vers81 The requi82 These req

me all IOUs, rwith the RPS ondustrial custg scale similarent is 20 percen to 25 percenare set at 0.40

te provides thgiven certain if program coedule if progrbill. The progin-state instal

allations with e energy gene-sited wind ge

CPs serve littlDelaware AC

ule has becomay $25 per Mfor that suppli0.08 per kWh)nt) use of ACPelectric supplirement that no before Janualiance can be rcent of RECs

trict of Colu

ict of Columbment of commeal wind powers PACE progrhe District’s iincludes electnded to raise easures in lowects in remot

ict does enforseparate schedC schedules esuntil it reache

sions of the RPSirements apply oquirements are pa

retail electric or, for the lattomers with a r to other statent. Recent rent in 2025. W0 percent and

hat, commencmarket condi

osts exceed thram costs resuram includes llations wherea 75 percent

erators withinenerator can a

e purpose in sCP is intendedme too stringe

MWh of shortfier increases t). However, ifPs for compliaiers, the PSC o more than oary 1, 1998. Fgenerated by s may be gene

umbia

bia does not hercial scale wr developmenram, PSC incinterconnectiotric and naturaapproximatel

w income home locations.

rce a RPS thadules for Tierscalate over tes 20 percent

S had allowed thon a mid-year (Juart of, not in add

suppliers, muter suppliers, apeak load of es in the regioevisions extenithin those pe

d rise over tim

ing with the 2itions. The sta

hree percent oult in an increcompliance m

e 50 percent oin-state work

n PJM and adjalso generate

several state pd to strongly ent. Suppliersfall into Delawto $50 per MWf, notwithstanance for a permay relax the

one percent ofFor 2012, this

sources that erated by suc

have sufficienwind power annt. Accordinglcentives, and bon standards al gas bill surly $20 million

mes and comm

at is similar inr I, Tier II andime. The Tierin 2020. Tier

ese suppliers to une 30) basis rathdition to, the bas

unicipal utilitia comparable

f more than 1,on. The currend the programercentages are

me to 3.50 perc

2014 scheduleatute authorizf retail electriease of four pmultipliers foof the equipm

k force. Whilejoining servicRECs, but on

programs, theincentivize co who fail to sware’s renewaWh and after

nding these hiriod of three ye RPS scheduf each year’s rmeans that nwere placed ih older sourc

nt wind resournd the area is ly, most of thbusiness enertheoretically

rcharges that fn per year com

mercial buildi

n many respecd solar RPS. Ar I requiremenr II includes m

opt out of the prher than on a calic requirement.

ties and rural e RPS comme500 kW are e

ent requiremenm out to 2025e minimum “ccent in 2025.

e; the PSC mzes a discretioicity costs in

percent or moror in-state winment is manufe RECs can gece areas, energnly if the syst

ey are a key compliance an

secure sufficieable energy f

r the second yigh ACPs, theyears and a shule. Additionaretail sales m

no more than 1in service prio

ces.

rces or availatoo densely p

he District’s rergy rebate proapply to windfund a sustainmmencing in ings in the Di

cts to the “stanAs in Virginiant is 5.0 perce

municipal soli

rogram. lendar year basi

electric coopeencing in 201exempt. The Rnt is 8.5 perc5-202681 and carve outs” fo82

may accelerate onary freeze ia year and a mre in the aver

nd turbines infactured in Deenerally be sugy sold or distem is sited in

component of nd to serve as ent RECs for fund. After thyear it increasere is widesprhowing of adeally concerns

may be met by 12 percent of or to 1998; fo

able land to supopulated for enewable eneograms are limd power instanable energy 2012, focuse

strict rather th

andard” RPS da and other stent for 2012 aid waste and l

s.

eratives must3.80 RPS establishent and the 20increase the

or solar PV th

or deceleratein the compliamandatory fre

rage customerstalled beforeelaware and foupplied by splaced by a n Delaware.

f the Delawarean indicator tcompliance me first year ofes to $80 per read (greater tequate planniare addressedresources pla

f the RECs neor 2020 no mo

upport significant

ergy programsmited to solar allations. The trust fund. Th

es on energy-han investing

design. The Dtates, the Tierand increaseslarge hydropo

t

hes an 020

hat

e the ance eeze r’s e for in-

e that must f use,

than ing d by aced eded ore

s,

D.C. his

g in

D.C. r I and s ower

sources. Tcategory iannually uobligationRPS for thmotivate cshould engenerationlevels ($0 The D.C. The progrdefinitioncosts are lprovidingnew renew

The Tier II REis phased out until it reachen of 20 percenhe Tier I obligcompliance w

ncourage compn. As in the M

0.05 per kWh)

RPS, like somram provides

n of renewablelow, most of t

g additional rewables.

EC obligationby 2020. A s

es 2.50 percennt renewable agation is $50

with the standapliance with t

Maryland RPS) that may not

me others discno limitation

es that includethe payments

evenues to exi

n is currently 2olar REC req

nt in 2023. Thand not in addper MWh ($0ard. For Tier the standard bS, the solar ACt be sufficient

cussed hereinn on the age ofe source categ by District raisting sources

2.5 percent ofquirement, curhe solar REC dition to that 0.05 per kWhII obligations

but will not seCP is initiallyt to support n

n, does not attf the sources gories discussatepayers unds rather than p

f sales and is rrently 0.50 pcarve out is prequirement.

h), a level thats the ACP is $erve to incenty high ($0.50new solar gene

tempt to addreof the renewased earlier. Ader the D.C. Rproviding an i

reduced eachpercent of salepart of the ove The ACP prot should be su$10 per MWhtivize new larper kWh), bueration.

ess the issue oables and inco

Accordingly, wRPS program incentive to th

h year until thes, increases erall RPS ovided by theufficient to h, a level thatrge hydropowut then declin

of anyway crorporates a brwhile program

are simply he developme

109

he

e D.C.

t wer nes to

edits. road

m

ent of

9.0 Mid The compBays, Pamsea thermare orientewarm seamore prom The Mid-Aresource ato surfacelocal windfeatures su The wind Study (EWfew long-temporal vany, data wind resoThis may could be astable noc The occurcyclones iscope of tstudy [41]maintaineexcess of that the Eoffshore mcharacteri In this repplain; 3) sregion as addition, eshallow bawhich the the wind r 9.1 East This sectiWind Inteassimilatithe wind ronshore si

d-Atlantic

plexity of the mlico sound a

mal contrasts aed nearly perpson wind direminent warm

Atlantic geogacross the rege cooling of thd features areuch as the Be

resource anaWITS) [1] andterm anemomvariations in on the vertica

ource [39] [40be valid unde

a poor approxcturnal bound

rrence of veryin the Mid-Atthis report to e] of near-coas

ed by the Nati115 kt (59 mast Coast can

must survive wistics shown p

port we distinshallow bays a whole, thusemphasis in Mays and soundlower capital

resource assess

tern Wind

on presents aegration Studyon system tharesource at seites chosen fo

Wind Res

Mid-Atlanticand other smaand abrupt chapendicular toection is moreseason role.

graphic variabgion. A warm he elevated w the large sca

ermuda High.

alysis here is bd partly on wi

meter measureatmospheric sal wind profil0] have been mer neutrally stximation in thdary layer ove

y high wind vtlantic are alsestimate risksstal east coastional Hurrican

m/s) in only 4 on expect 103 kworst case evpreviously in

guish 4 main and sound an

s we focus onMid-Atlantic wds and coastal r

costs are offsesment and loc

Integration

an overview oy (EWITS) [1at combines aelected onshoror detailed an

source

c shoreline anall inlets resultanges in surfa the prevailin

e southerly an

bility introducseason phenoestern region

ale winds due

based partly oind observatioements at hubstability and tle at fixed offmade by extratable conditio

he bays and soer both land an

velocities assoo important cs for offshore t tropical cyclne Center covout of 106 yekt hurricane wvents so it is pTable 4.1.

geographic rnd 4) offshoren the shallow bwind has thusregions are laret by weaker w

cations of wind

n Study (E

f the Mid-Atl1] for the threa high resolutire and coastalalysis in that

d local featurts in small scaace roughnessng cool seasonnd local topog

ces complex somenon know after sunset [to the prevail

on the model rons from tall

b height and litheir impact ofshore locationapolating buoyons that are coounds and likend sea.

ociated with wconsiderations

wind turbinelones was basvering the yeaars, and using

winds once evprudent to des

regions: 1) the ocean. Therebays and souns far been on rgely unexplorwinds is invesd measuremen

WITS)

lantic wind reee-year periodion mesoscalel locations anstudy were th

res such as theale local winds. The Appalan westerly wigraphic featur

seasonal and dwn as the noct[38]. Superimling synoptic

results from ttowers, rawinittle information the verticans. Several rey data to hub ommon in theely underestim

weather events for wind dees associated wsed on the Huars 1899-2004g an extreme very 10 years.sign them to s

e western, elee is a lack of wnds where talridgeline andred as a poten

stigated elsewhnts used is giv

esource usingd 2004-2006. e model with

nd several thohose that were

e Chesapeaked circulationsachian mountnd direction, res such as va

diurnal variatturnal low lev

mposed on the weather syst

the Eastern Wnsondes and bion about the

al wind profileecent estimateheight using

e marine bounmates the win

ts such as norvelopment, bwith these ev

urricane Datab4. The study fvalue analysi Wind turbin

survive 100-y

evated region;wind measurell tower data id offshore regntial wind resohere in this rep

ven in Table 9

g the recent NThe study uswind measur

ousand offshore free from co

e and Delawas driven by lanains to the wehowever the

alleys likely p

tions in the wvel jet (LLJ) iese regional atems and clim

Wind Integratibuoys. There spatial and e. There is littes of the offsha log-law rel

ndary layer, bnd resource in

r’easters or trobut it is beyonvents. A recenbase (HURDAfound winds iis they estimaes installed

year storm

; 2) the coastaements for this available. Ingions, while inource. The exteport. A summ-1.

REL Eastern ed a data rements to assre locations. Tonflict with o

111

re nd-est

play a

wind is due

and matic

ion are

tle, if hore lation. but it n the

opical nd the nt AT) in ated

al e n nland ent to

mary of

sess The

other

112

interests (wind resohighlandscoastal pla Table 9-1. S

EWITS win Figure 9-100m for that are recoast/bays

Aberdeen3

Crisfield

Bay ApplicaScaled (alphaEastville

Newport New

Wallops

Coastal Plai

Chesapeake

Ocean ApplScaled (alphaRidgeline

Ridgeline AScaled (alpha

Model DataRidgeCoastalOcean

Measur

6. Alpha = 0.25

[1] Giovanni Gcoastal locatio

References:

Notes:1. Height Abo2. PJM - Day O3. Aberdeen d

4. Wind Shear5. Scaled per A

(navigation, mource. The stus, along the coain, nor in oth

Summary of the

nd resource estim

-1 shows the Ethe years 200

epresentative s/sounds, and

Jan0

Oct0

ation Extra = 0.08)5

Jun0

ws Aug

Sep0

in ApplicationInter

Light 1985

licationa = 0.08)5

Dec

Applicationa = 0.25)6

a EWITS2004

red Data D

5; Hilly, Forested Terr

Gualtier and Sauro Secons in Southern Italy,"

ve Ground (meters)On-Peak = 0700 - 2300ata collect from sonde

r: U2 = U1 * (z2 / z1)Alp

ASME with Alpha = 0

military, etc.),udy provides aoast, and offshher possible h

e Wind Resourc

mates were provi

EWITS locati04-2006. Alsoof the range o

d offshore that

08-Jun10 50m100m150m

08-Oct09 76m

rapolated 100m

06-May08 49m75m110m

g06-Dec07 51m85m97m

09-Feb10 46m76m91m

rpolated 100m

5-2010 43m

100m

c09-Nov10 80m

100m

4-2006 100m

DatesHeight

(m)1

rain [1]

cci, "Wind Shear Coef" Renewable Energy,

0; Night Off-Peak 2301es between 6-7 am ESha

0.04 to 0.08 over open

and in this sea baseline estihore. EWITShigh resource

ce Assessment a

ided only at 80 a

ions, the locato shown in theof geographict have been se

On-Peak2 Off-P

D4.94 -D5.8 -D6.5 -D8.2 N8.

D8.3 N8.

D5.5 N5.D6.0 N6.D7.2 N8.D6.1 N6.D6.7 N7.D6.9 N7.D7.3 N7.D9.1 N9.D9.8 N9.

D7.1 N7.

D8.1 N8.

D8.6 N9.

D8.7 N8.

D9.2 N9.

D9.4 N9.4D7.4 N8.0D9.9 N9.9

Mid-Atlant DJF

fficients, roughness levol. 36, pp. 1081-1094

-0659ST

sea with light - moder

ense EWITS imate of the wdid not evalulocations alo

and Locations o

and 100m AGL (

tion symbols e figure is a sc conditions inelected for fu

eak2 On-Peak OffD4.7D5.7D6.6

.6 D7.4 N

.7 D7.5 N

.8 D5.8 N

.5 D6.2 N

.0 D7.3 N

.4 D6.5 N

.2 D6.9 N

.6 D7.0 N

.3 -

.1 -

.8 -

.8 D7.2 N

.5 D7.6 N

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.8 D6.9 N

.3 D7.3 N

D7.5 N7D6.6 N7D9.6 N9

ntic WindsMAM

ength and energy yiel4, 2011.

rate Class 3 winds

gives a realiswind resourceuate the wind ong the coast a

of Wind Measu

(above ground le

are colored asubset of EWIn the mountai

urther detailed

f-Peak On-Peak O- D3.8- D4.7- D5.3

N8.1 D5.9

N8.6 D6.1

N5.6 D3.9N6.3 D4.3N7.7 D4.8N5.9 D5.5N6.6 D5.6N6.9 D5.1

- -- -- -

N7.6 D4.7

N7.9 D5.8

N8.5 D6.2

N7.0 D5.6

N7.4 D5.9

.7 D5.6 N

.5 D5.1 N

.9 D7.6 N

JJA

lds over

stic evaluatione in the Mid-A

d resource in tand in the bay

urements

evel) heights.

according to tITS locationsins, along the

d study in this

Off-Peak On-Peak- D5.3- D6.2- D6.8

N6.1 D7.2

D6.2 D7.2

N3.8 D4.5N4.3 D5.1N5.2 D5.9N4.8 D5.5N5.2 D5.9N5.0 D5.3

- D6.7- D8.3- D9.0

N5.1 D5.8

N6.0 D6.9

N6.4 D7.4

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N6.2 D7.5

N6.2 D6.9N6.5 D6.0N8.1 D8.3

A S

n of the availaAtlantic westethe Mid-Atlanys and sounds

the mean winds, numbered 1e s report. The

k Off-Peak---

N7.1

N7.3

N4.6N5.3N6.5N5.3N5.9N5.5N6.4N6.4N8.8

N6.4

N7.3

N7.8

N7.2

N7.6

N7.6N7.0N8.4

SON

able ern ntic s.

d at 1-25,

EWITS orange 0.40

Figure 9-1. The numberMountain: 1study. Additand the Sou

Figure 9-combinedshown areequal to th> about 7 during thein late afteup after suthe order about 6-7 the west a

ffshore wind 0-0.45, for the

Measurement red sites are a su1-8, Coast: 9-16 tional offshore m

unds in North Ca

-2 summarized, and for the e local time (Ehe fraction ofm/s for exam

e summer in ternoon. For thunset. Offshoof 1-2 m/s. Tm/s in the co

and 8.5-9 m/s

resource evale offshore loc

sites for selecteubset chosen to re

Offshore: 17-25measurements ararolina.

s the seasonaseparate mouEST). The aref time that themple occur abothe early to mhe mountain s

ore winds > 9 he results fro

oastal and bay(class 6-7) o

luation indicacations.

d PJM nodes. epresent the rang

5. Sites are colorre not shown ind

l and diurnal untain, coastalea between we wind has a vout 1/3 of the

mid-morning insites, cool seam/s occurs abm the EWITS

y/sound regionffshore (beyo

ates wind spee

ge of conditionsed according to

dividually. There

variability inl and offshore

wind contours,value in the rae time for the n all regions bason (DJFMAbout half the tS study indicans (class 3), 7

ond 3 nm).

eds of 8-9m/s

s along the Appa100m annual me

e are no location

n the wind spee subsets defi, as a fractionange boundedcoastal sites. but at slightly

A) winds decrtime. Overallate annual me7-8 m/s (class

s, with capaci

alachians, coastliean wind speed

ns in the Delawar

eed at 100 m fned in Figure

n of the total ad by the conto

The lowest wy different timrease in the afl, the diurnal vean wind spees 4-5) in the e

ity factors in t

ine and offshorefrom the EWITSre, Chesapeake B

for the 3 yeare 1. All times area of the ploours. Wind spwind speeds omes, and increfternoon and pvariations areeds at 100m oelevated regio

113

the

. S Bays

rs

ot, is peeds occur ease pick e on of on to

114

Figure 9-2. Study for 20Contours ar

A detailedis shown i(mountain“coastal”)averaged reduction WPD variThe middindicate suover a mo

Seasonal and D004-2006. All yee wind speed in

d view of the in Figure 9-3n, coast, offsh). The other yover each moin intermitten

ies substantiaday minimum ubstantial var

onth.

Diurnal Characears and all numm/s, colored con

seasonal and 3. This shows hore) and the vyears are similonth. The thicncy of the WP

ally across thesurvives the

riations in the

cteristics of the mbered locations

ntour spacing is

diurnal variathe variabilit

variability aclar. Each plot

ck black line iPD for the regese 25 sites, baveraging bec

e hourly WPD

100m Wind frofor each of the gevery 0.5 m/s.

ability in the wty from site toross the subse

t is the mean Wis the mean Wgion as a whout is clearly rcause it is a b

D, which varie

om the EWITS.geographic subse

wind power do site within eets. (“Bays/soWPD at each

WPD (total Wole. The diurnreduced whenbroad regionaes also with lo

ets defined in Fi

density (WPDeach geographounds” in the

h site for each WPD per site),

nal variabilityn the total powl characteristiocation, even

gure 1 are comb

D) for the yearhical subset figure legendhour of day, and shows th

y in the availawer is consideic. These resu

n when averag

bined.

r 2004

d =

he able ered. ults ged

Figure 9-3. Each graph

9.2 Win The left plocations Anemomemeasuremmodel/datmeasured

Diurnal variabcorresponds to o

d measure

panels in Figufor the most reter data for a

ments are showta comparisonwinds and th

bility in Wind Pone of the numb

ements and

ure 9-4 show trecent year (2available yearwn in Table 9ns are not timheir variability

Power density (Wered locations sh

d comparis

the seasonal/d2006) that arers between 209.1. With the

me-coincident,y. The two m

WPD) for each hown in Figure 1

sons with

diurnal variab closest to wi

006-2009. Theexception of , but they neviddle left pan

month of 2004.1. Model output

EWITS

bility at 100mind measureme on-peak andthe Chesapea

vertheless givenels correspon

. taken from EW

m for individuments. The rigd off-peak timake Light Towe an idea of thnd to EWITS

WITS.

ual EWITS ght panels shome periods forwer data, the he actual locations on

115

ow r the

the

116

Eastern Shshow overterrain. This most likroughness

Figure 9-4. Locations (lanemometerMD, NPTNCHLT2=Chanemometer

hore (numberrall weaker whe winds on tkely due to ths of the Bay a

Seasonal and dleft panel), that ar data at Chesap=Newport News

hesapeake Light rs.

rs 12 & 13 in winds. This is the Eastern Shhe larger openallows the we

diurnal variabilare closest to buoeake Light Towes, VA, WALL=WTower(43m). Bl

Figure 9-1) tpartly due to

hore are stronn water fetch osterly or south

lity in wind speeoys and availabler (two bottom pWallops, VA. NBlue squares: EW

that are closeinterannual v

nger relative toof the Chesapherly winds t

ed at EWITS. le tall tower datapanels). The dataBDC stations: B

WITS locations; g

e to the Crisfievariability, oro the wind at

peake Bay to tto accelerate a

a (right panel) ana time periods arBISM2, TCBM2green dots: buoy

eld (CRSF) tor to the influent Newport Newthe west; the as they traver

nd a comparison re given in Table2(10m), WAHV2ys; orange triangl

ower (76m), bnce of the locws (NPTN). Tsmaller surfa

rse the Bay.

of EWITS and e__. CRSF=Cris2, KPTV2(6.4mles: tall tower

but cal This

ace

sfield, m),

It is not cldue to intemeasured wind meaanemomeis approprin the diurspring/earmid-summcould perhlogarithmthat the di As previovertical wbuoy or 5neutral boboundary layer becaassumptiofor exampconditionswith largeA plot of how rapidcirculationEastville, operation

Figure 9-5. Eastville (E

Figure 9-strong seain simplifboundarie

lear whether terannual variand EWITS

asurements weeter is at 43m,riate for openrnal cycle. Thrly summer, amer that are nhaps be due to

mic rescaling oiurnal cycle c

ously mentionwind profile at

0m winds comoundary layer

layer. Modelause the intermon of neutral sple when cools over land. Ter increases atthe annual m

dly the wind ins could be cMD (ESTV) is the instant

Annual Mean WSTV), Newport

-6 is a contourasonal and diufied estimates es.

the differenceations, or to dwinds at Cheere missing in and the data

n sea, for purphe measuremea mid-afternoonot reproducedo real differen

of the wind spcan vary signi

ned, there exist heights 50-1mmonly use aand likely un

l simulations mittency of thstratification iler continentaThe change int night relativean wind at thncreases withontributing torelative to N

taneous wind

Wind Speed at News (NPTN) a

r plot of the durnal variabiliof higher lev

es in the measdifferences inesapeake Lighn 2005, so thihas been scal

poses of compents show a pon decrease ind in the modences in the wipeed from 43 ficantly from

sts at present 50 m that are

a power law mnderestimatescontinue to hhe turbulenceis reasonable

al air moves on wind speed wve to day, andhe anemometh height on avo the dramaticewport Newsshear.

Each Anemom

and Wallops (WA

difference in tity in the win

vel winds from

sured winds an the local terrht Tower (CHis year has beled to 100m u

parison .Theseprominent winn the wind anel. These diffeind that are nto 100m. Eas

m 50-100m.

little informae important fomodel, but this the wind, espave difficulty is not easily ; examples ar

over the warmwith height is is likely to bter vertical levverage and hoc increase wits, VA (NPTN

meter Level. ALL) locations

the wind betwnd shear is appm near surface

at Eastville (Erain. The bott

HLT2) for the en excluded iusing a wind e plots show snd maximum nd an extendeerences in the

not taken into stville tower d

ation anywheror wind turbinis approximatpecially in thy accurately sparameterize

re the marine mer ocean wats also stronglybe highly variavels shown inow that differsth height at W

N). More relev

shown.

ween heights 1parent and thie measureme

ESTV) and Crtom two paneyears 2004 anin this plot). Tshear exponeseveral modefrom 4-8 pm

ed period of we phasing of thaccount with

data (not show

re in the Mid-nes. Extrapolation is strictlye stably stratiimulating the

ed. Under somboundary lay

ter or under cy dependent oable at coastan Figure 9-5 gs between the

Wallops, VA (vant, however

110 and 49 mis underscore

ents, especiall

risfield (CRSFels compare nd 2006 (somThe CHLT ent of 0.08, whel/data differe

during late weak winds duhe diurnal cyc

h the uniform wn) also indic

-Atlantic abouations from 10y valid for theified nocturnae stable boundme conditionsyer during timonvective on time of dayal locations. gives a sense e sites. Sea br(WALL) and r, for turbine

m at Eastville. s the uncertaily near land/se

117

F) are

me

hich nces

uring cle

cate

ut the 0m e al dary , the

mes

y,

of reeze

The inty ea

118

Figure 9-6. Data based

Another vmeasuremlevel) rawthe Chesaspeed acrorange 5-7 is that thethe resultsstrengths

83 Wind meMid-Atlanti

Seasonal and Don anemometer

view of the vements used forwinsondes launapeake Bay duoss the rotor. m/s and incre

e standard NWs as these are at typical hub

asurement data fic Tall Tower Re

Diurnal Variabidata at Eastville

ertical wind pr this plot are nched at Abeuring the yearWith the excease to 7-9 m

WS launch timtypically tran

b height could

from Eastville aneport [2]

ility of the Diffee, MD.

rofile and its high verticalrdeen Provingrs 2008-20108

ception of the m/s at rotor topmes are 0 UTCnsition periodd be underesti

nd New Port Ne

erence in Wind

seasonal depresolution (s

g Ground (AP83. This data amonths of Au

p (150m). TheC (7pm EST) ds. Although dimated by a fu

ws, Virginia and

Speed between

endence can bsampling rougPGD) locatedallows an estiugust and Sepe disadvantagand 12 UTC

data is very lifull wind pow

d Aberdeen, Mar

n 110 and 49 m.

be seen in Figghly every 3 md along the noimate of the cptember, 50 mge in using the(7am EST), w

imited it is power class.

ryland are discu

.

gure 9-7. Them above grouorthern reachechange in winm winds are ine rawinsondewhich could b

ossible that wi

ussed in detail in

e und es of nd n the data bias ind

the

Figure 9-7. High vertica

In order tointerannuastation BIabout 4-6 the increaother yearunderestimmean winthe tip of relative to

Figure 9-8. Anemomete

Vertical profileal resolution raw

o put these noal variability ISM2, which m/s and the y

ase in wind sprs, then this sumated for win

nd speed at oththe Delmarva

o the coastal l

Monthly meaner height is 10m.

es of wind speedwinsondes used. S

on-time-coincfor the years is close to theyears considepeed with heiguggests that thnd energy proher buoy locaa Peninsula; wocations.

n wind at NOAA.

d at Aberdeen, Standard launch

cident compar2006-2011 u

e EWITS andered for this anght at Eastvillhe wind resou

oduction. Figuations; annualwinds over lan

A/NOS Buoy BI

MD. h times are 0 and

risons in perspsing NBDC N

d Eastville locnalysis appeale for the avaiurce at locatioure 9-9 showsl mean wind snd in the cent

ISM2 (Bishop’s

d 12 UTC (7am a

pective, in FiNOS (Nationacations. The 1ar similar withilable year 20ons such as Es the interannspeeds similartral region of

s Head, MD).

and 7pm local).

igure 9-8 we al Ocean Serv10m winds typh respect to th007-2008 is reEastville couldnual variabilitr to BISM2 athe Delmarva

look at the vice) buoy dapically range he annual meaepresentative d be significanty in the annuare also founda are much w

119

ata at from an. If for ntly

ual d at weaker

120

Figure 9-9.

9.3 The The Mid-Aare howevsurface cowind enerplain. Thesummer mTo illustra2007 usinleft panelsdevelopedrotor spanextendingoffshore. further no

Annual mean w

Mid-Atlant

Atlantic coasver some poteooling of the ergy potential. e LLJ is a stromonths. It begate the spatial

ng the state-ofs show the LLd LLJ pattern n at heights 14g west to apprIn this examp

orth off the co

wind at several

tic low level

tal plain is geential wind reelevated westThis forcing

ong band of fagins after sunsl characteristif-the-art WeatLJ as it beginsat 11pm EST

40, 99 and 60roximately theple, winds at 7oast of New Je

NOS locations

l jet as a pot

enerally not coesources that atern region duoften gives ri

ast wind that set, persists foics of the LLJther Researchs to form at ab

T. The top, mi0m AGL. Thee 350m elevat7pm are greatersey.

in Delmarva.

tential wind

onsidered as aarise from laruring the warmise to a noctuoccurs under or most of theJ, Figure 9-10h and Forecasbout 7pm lociddle and bottLLJ covers a

tion contour (ter than 13 m/

d resource

an important rge scale topom season that

urnal low lever stable PBL ce night, and is0 shows a most WRF modecal time; the rtom panels sha significant p(not shown), /s in the Ches

wind resourcographic/thermt could signifiel jet (LLJ) [4conditions at ns strongest at odel simulatioel [44] at resolright panels shhow the windportion of theand east to thsapeake and D

ce region. Themal forcing duficantly increa2]in the coastnight during tabout 1am [4

on on August lution 9km. Thow the fully

d across a typie coastal plainhe coast and Delaware Bay

ere ue to ase tal the 43]. 2,

The

ical n,

ys and

Figure 9-10Left panels:horizontal reother station

The Mid-Acommon odue to theoccurs. Nlocal time

0. The Aug 2, 20 7pm, EST; Rigesolution, using ns.

Atlantic LLJ occurrence due lack of suitaWS rawinson

e) and so are o

007 low level jetght panels: 11pmthe MYJ bound

as a potentialuring the warmable multi-decndes, for examout of phase w

t at across-rotom EST. Winds wdary layer schem

l wind resourcm season [43

cadal wind dample, are launwith the night

r heights 60, 99ere computed we. Results were v

ce is not yet c] [42], howev

ata that samplenched at the stttime jet maxi

9 and 140m AGwith the Weather

validated with m

clear. There aver the climate the jet at thetandard timesimum.

GL Research Forec

measurements at

are indicationstology of the e time and hes 00 and 12 U

ast Model at a 9Beltsville, MD

s that it is a faLLJ is uncert

eight at whichUTC (7am and

121

km and

fairly tain h it d 7pm

122

9.4 Win The analyno means non-tempTable 9.1EWITS loentries arebe a reasoseason. Thyears 200buoys andcoastal regvariabilitymeasure tvariabilitygiven locaanemomevariability The exteneastward esummer iscoast, to ssampling LLJ. But taverage w

Barrierconsequacross thclasses ocould be Mitigatspatial, t

d Resourc

ysis presentedcomprehensiorally coincid

1 presents a suocations showe the mean wionable approxhe available m4-2010. Anal

d for limited tgions. The chy of the land-sthe wind acroy in the Mid-Aation from lim

eter data reveay and highligh

nt to which theextent, and ins uncertain. Tsunrise and suis also coincithe jets do oc

wind speed est

r - Wind resouuently there ishe rotor suggeover the coaste overestimat

tion Option –temporal, sea

ce Potentia

d here has useive due to thedent data recoummary of sewn in Figure 9ind speeds (in

ximation for thmodel and oblysis of wind time periods shallenges in a sea boundaryss the nominaAtlantic windmited time (i.eal some signifht the need fo

e LLJ is an imn particular wThe standard Wunset transitioidentally out occur over largetimates to a h

urce measurems a high degreests that windtal areas inclued.

– A coordinateasonal and ver

al and Unce

d a multi-plate lack of suitabords. Each dateasonal/diurna9.1, and for thn m/s) averaghe PJM 7am-servational dameasurementsuggest that throbust resour

y, the sparse saal rotor span, d, and it is diffe. single year)ficant differen

or more extens

mportant resohether the onWMO launchon periods whof phase withe areas in the

higher wind po

ment data is see of uncertaind resources muding Delmar

ed regional wrtical (shear)

ertainties

tform wind obble wind obseta source cleaal variability fhe wind meas

ged separately-11pm day usata is unfortuts from the fehe wind resource assessmenampling and tfrom 50-150ficult to draw) sampling. Cnces with respsive tall towe

urce for the cnset of the LLJh times of 0UThere atmospheh the time of o

Mid-Atlanticower class.

severely lackinty. However

may be undererva and the ba

wind measuremwind characte

bservation anervations, thearly has its owfor the coastasurements disy for day (8amed in Section

unately not timew available taurce may be unt in these regthe cost of talm. There is s

w conclusions Comparisons opect to the over and offshor

coastal plains J coincides wTC and 12 UTeric stability ioccurrence of c and are ener

ing for the Mr, limited dataestimated by aays and sound

ment campaigeristics.

nalysis that wee sparse spatiawn problems aal, mountain ascussed in secm-8pm which n 5 of this repme-coincidentall towers, rawunderestimategions derive fll tower platfosubstantial intabout the win

of the EWITSverall resourcere wind measu

during the suwith the high lTC corresponis changing. Tf the warm seargetic and cou

id-Atlantic rea at turbine huat least one wds. Offshore w

gn could prov

e recognize isal sampling, aand advantagand offshore ction 9.2. The

is consideredort), night, ant and spans thwinsondes aned by models from the forms that canterannual nd resource aS data with e and its diurnurements.

ummer, its load period innd, on the eastThis temporalason nocturnauld increase

egion, and ub height and

wind power wind resource

vide needed

s by and es.

e table d to nd he nd in

n

at a

nal

n the t l al

d

es

10.0 En In order toMarylandconsiderinfrom regioideas for ameeting ainclude: tusulfur oxitowards wbroader enresulting w 10.1 No A key stakgroups. Trepresentaenvironmwere discuThe sixtee100,000 sFigures 1

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Figure 10-11. NGO Meetingg Agenda

10.2 Ris Collisionsenvironmpath of thcomparedbe mitigatoffshore smigratingillustratesaround thshow thos

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The additiportion cokm. At suMassachuecologicalincreased exist conchas the poestuaries a Although through pthe birds bobservatioStudies ha

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sks to Bird

s involving biental risks wie wind farm.

d to other enerted by avoidinsite in sheltereg birds were in the radar imae wind farm, se birds that f

2. Bird Flight P

ional flight diompared to thech a low risk

usetts estimatelly significantuse of the ren

cern with the Mossibility to realong the shor

collision riskroper wind fabecoming attrons of nocturnave shown tha

oil platform in th

ds and Bats

irds and bats iith wind turbiHowever, thergy sources anng sites on med water, conn danger of coagery obtainethose that fly

fly over or und

ath Mapping at

stance needede total migratiof collision, m

ed 260 bird fatt threat to birdnewable energMid-Atlantic rsult in a higheres of the Delm

k for bird specarm design anracted to the lnal birds circlat this circling

he Gulf of Mexic

s Relative

into turbines ines. Wind ture data shows nd only create

migratory routecluded that onollision, defined during the y through the wder the sweep

t Nysted Wind F

d to detour theion episode exmodels for protalities annual

d species relatgy in the area bregion being aer number of cmarva Peninsu

cies is minimand placement.lighting used ling brightly lg behavior in

co causes approx

to Alternat

are a commonrbines create that bird collie a relatively es. A study donly 0.9 percen

ned as flying <study and showind farm are

p area of the t

Farm, Denmark

ese wind farmxperienced byoposed U.S. olly across all sive to the benby the Massacat the heart ofcollisions durula should be

al, further mit The greater ron the turbinlighted offsho

ncreases the ri

ximately 50 bird

tives

n public concan obstacle foisions are notsmall risk fo

one at Nystednt of night m< 50 m to a tuows that a mae over-inflateturbines.

k

ms is approximy many specieoffshore projecspecies. This h

nefits receivedchusetts Auduf the Atlantic ring the migrae excluded fro

tigation can trisk comes fr

nes at night, siore oil platforisk of collisio

d deaths for colli

cern when obfor migrating t a major concr migrating sp

d wind farm inmigrating and 0

urbine [45]. Fajority of miged since Figur

mately 0.5 km,es, which can cts like Cape has been deem

d from said spubon Society flyway (see F

ation season. Cm wind plant

theoretically brom nocturnalimilar to the crms in the Gu

on [47]. By sw

isions annually [

serving potenbirds flying incern when pecies which n Denmark, a0.6 percent of

Figure 10-2 grating birds fre 10-2 does

, a very small reach up to 1,Wind in

med to pose npecies from

[46]. There dFigure 10-3) wConsequently t development

be achieved l collisions, dcurrent ulf of Mexico8

witching from

[47]

125

ntial n the

can an f day

fly not

,400

no

does which

t.

due to

84. m

126

continuouphenomenrecommennight whe

Figure 10-3

Bird colliwind turbresearch ithese find Since batsturbine stathe turbinrisk to batmigrate ovThis need 10.3 Atm Displaceman inevitametric tonlifespan oemissionsemissionsinstall 24. If offshordisplacemelectricitysecond be

us illuminationnon could be ndations incluen high migra

3. Atlantic Flyw

sions have beines and birds ongoing. Ba

dings have occ

s feed primariartup wind sp

ne is idle durints by 85 percever water at t

ds further stud

mospheric

ment of Greenable benefit frns of CO2 annof around 20 ys or more duris are estimated.4 GW and co

e capacity is iment would acy from coal anehind nuclear

n on oil rigs tavoided and rude allowing ation intensity

way

een well docus. Bat collisioat carcasses hcurred sporad

ily at night onpeed slightly cng times of loent with only imes, but it is

dy [48] but sh

c Emission

nhouse Gas emrom wind pownually relativeyears, one sucing its lifespad to be avoideonsequently d

included, the ctually be highnd coal is the in Virginia.

to intermittenreduce the risfor migration

y is forecasted

umented and pons, however,have been foudically and ev

n flying inseccan dramaticaow wind speed

2.6 percent los not conclusi

hould not be a

Displacem

missions (GHwer. Accordine to the currench turbine couan. Under 20%ed. Under the

displace 66 mi

emission redher since the primary fuel

nt flash of strosk of nocturnan corridors bed.

provide a gen, have not bee

und at the baseven at turbines

ts when the wally reduce bad. One study oss in energy ive as to the ea blocking issu

ment

HG), nitrogenng to NREL, ant average U.uld displace a% Wind by 20e DOE 2030 sillion tons or

duction share iDOE nationafor generatio

obe lights maral collisions. Otween wind f

eral idea abouen as highly de of all U.S. ls which are no

wind speed is at mortality. Restimated thioutput [5]. It

exact cause ofue.

oxides (NOXa single 1.5 MS. fuel mix. S

as much as 54030, 825 milliscenario, the M8.02 percent

increases to 1al scenario is bon in North Ca

rking a wind Other risk mifarms and turn

ut the risks asdocumented, bland-based wiot in operatio

less than 6 mRaising the tus mitigation mt is understoof bat interacti

X), and sulfur MW turbine diSince these tu4,000 metric toion metric tonMid-Atlantic of the US CO

12.1 percent. based on 18 parolina and M

farm, the circitigation ning off turbi

ssociated withbut current ind farms, but

on.

m/s, raising theurbine speed mmeasure redu

od that some bon with turbin

oxides (SOX)isplaces 2,700

urbines have aons of CO2 ns of CO2 States could

O2 emissions.

The emissionpercent of

Maryland and

cling

nes at

h

t

e means ced

bats nes.

are 0 a

n

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large amountsses and inputspast 40 + yearestroy the aqu

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largest sourclands; secondwaste water i

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plant emissiononal rivers, baes reductions ric emissions

ction is likely minished as thurbine genera

eases the needhave been sugdue to similar

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e to sell carboor carbon credoorly in recenhicago Climat

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rocess wheretes and phosps of oxygen frs more nutrienrs, leading to uatic ecosystemely “fish-kilhellfish from

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in the demanhe penetrationators to balancd for frackingggested to por concerns.

considered antional fossil fWind offers a

on credits for dits at marketsnt years due tote Exchange c

Gas Initiativehe Mid-Atlantachusetts, Newons quarterly

he revenue genergy developmt into further

Delaware and o not participa To date 15 a2,511 in cum

onal Water

a body of frephorous, whicrom the bodynts into the eclarge portionsem. Eutrophicls” that are crthose areas to

ve nitrogen lore run-off lademping of raw

unt in solvingds; respiratoryions, displace

cury, arsenic,

nd for natural n of wind powce the variatio, for which loison aquifers

a barrier to acfuels tend to rhedge agains

renewable ens like the Chio an excess ofclosed in late

e (RGGI) currtic region. Cow Hampshire,y for these statnerated from ment. In partiCO2 reductioMaryland pa

ate lose the diauctions have

mulative proce

rs

esh water acquch causes exce of water. Thcosystem. This of the bay bcation has botreated in deadoxic for huma

oading are cheen with animasewage and h

g numerous pry health issuesement of coalchromium an

gas as a viabwer increases ons in wind pong term envi

and cause ea

cruing the enrise and fall inst oscillating f

nergy power picago Climatef carbon cred2010.

rently managomprised of n, New York, Rtes based on ethe auction b

icipation of thons and therefarticipate in thirect incentivebeen held. M

eeds.

quires a high cessive algae ge problem is is process has

becoming death immense nd-zone which an consumpti

emical fertilizal waste; and human waste

roblems inclus like asthmal-fire powerednd selenium p

ble energy altethe need for a

plant output. Rironmental imarthquakes. Fr

nvironmental bn cycles, so tofossil fuel pri

production if e Exchange indits. In fact the

es carbon tradnine states; CoRhode Islandeach state’s inback to the stahese auctions fore has a direhese auctions e to manage C

Maryland has r

concentrationgrowth whichcompounded s plagued the

ad zones whicnegative ecoloh then hurt locion.

zers from farmd third is Mun. There are a

uding , acid rain andd electricity yproduced by s

ernative to coadditional quiReduced natu

mpacts are stilrance and Bul

benefits of woday’s glut isices.

a carbon marncreased untile Carbon Cap

ding among sonnecticut, d, and Vermonndividual COates to be inveeach state

ect incentive in the Mid-

CO2 emissionreceived

n of inorganic h then in turn when the alg Chesapeake

ch inhibit aquaogical and cal fishing

m, urban and nicipal and

range of prog

127

d yields such

oal. ick

ural ll lgaria

ind s

rket l p and

some

nt, O2

ested

to

ns in

gae Bay atic

grams

128

Atmosphelivestock the five stnitrogen lremoval) carbonace Similar tobay will cand mobilorganizatimore strindifferent a Eutrophicgood winddisturbingwind farmthe turbincontinue tturbine plimpact of

eric sources cand fertilizedtudy states emoading from pand fuel trans

eous fuels, reg

o the displacemcome as a direle sources. Alions like the Cngent regulatiaspect of the e

cation has caud resources. Tg currently exms (see wind rnes which wouto reduce nitratforms can a

f disturbing th

contribute abod soil, and elecmitted 136,297power plants sport. One opgardless of its

ment of Greenect result of wlthough, nitroChesapeake Bions on all soueutrophicatio

used large deaThese dead zoxisting ecosystresource map uld in turn be ogen run-off act as artificiahe ecosystem

out one-third octric power p7 metric tons in surroundin

ption could bes source.

nhouse Gaseswind energy taogen run-off fBay Foundatiources of nitron problem tha

ad zones in thones provide ttems, and alsin Figure 4-part of the soand the size o

al reefs and beduring install

of the nitrogelant emissionof nitrogen o

ng states, mine to add a carb

s (GHGs), theaking the placfrom agricultuon and Sierra gen run-off inat has previou

e bay area (sethe ideal locao are located 5) These locaolution to solvof dead zonesenefit the ecolation.

en loading andns. EIA reportoxides during ning operationbon tax on ele

e displacemence of combusture continues Club are mak

nto the bay. Wusly been low

een in Figureation for turbin

in some of thations would sve the issue os in the bay deosystem, all w

d include vehted that powe2010. In add

ns (including ectricity gene

nt of nitrogention of fossil to be the prim

king strides inWind turbineswer priority.

e 10-4) that hane installation

he more feasibserve as insta

of dead-zonesecrease, these

without the ini

hicles, gases frer plants locatdition there is

mountain toperated from

n discharge infuel fired plamary issue, n fighting fors would attack

appen to be nn without woble locations

allation groun. As efforts e submerged itial negative

from ted in

p coal

nto the ants

r k a

near orry of

for nd for

Figure 10-4

10.5 Ae Visual imThe highemore windhomes andback requdiscussed Despite thVirginia ayears. Thethey choo790 MW Mehoopanbeen damwith the wbenefits, halso been Beach andSince the installatio

4. Chesapeake B

sthetics an

mpacts produceer visibility ofd plants are bd can become

uirements and in the Sectio

hese mitigatioand North Carese delays and

ose sites elsewof wind plantny in June 20

maged by strip wind plants arhas helped to helpful in red

d mountain toproposed off

on of turbines

Bay Dead Zones

nd Public A

ed by wind tuf ridgeline an

built. Aerodyne barriers to pnoise limits t

on 8 of this rep

on measures, rrolina. Publicd associated l

where. For exats located mai

012.. In some mining. Also

re perceived aopen markets

ducing oppos

ourism plays afshore wind pr

would have a

s

Attitude

urbines are imd offshore incnamic and maprojects. One that communport.

ridgeline sitesc media, law slegal costs beample in nearinly on ridgelcases the init

o the coal busas beneficial. s in Pennsylvition.

a major role iroject in Masa negative eff

mportant consicreases initialachinery sounsolution is usities can use t

s have encounsuits and regucome econom

rby Pennsylvalines with anotial projects wsiness has beeSeeing wind

vania. Public e

in many local ssachusetts, thfect on tourism

iderations in pl concerns bu

nds from turbising model orto minimize t

ntered seriousulatory procesmic barriers foania wind devother 131 MWwere placed onen declining, splants operat

education thro

l economies ohere has existm as the sight

project plannut these tend toines can be anrdinances withthese issues. T

s opposition isses have delaor developersvelopment is pW beginning in mountains tso the local joting, along wiough stakeho

of the Mid-Atted a strong ct of turbines o

ning and sitingo diminish asnnoying to neh reasonable These are

in Maryland, ayed projects s and consequproceeding winstallation inthat had alreaobs associatedith their econolder groups h

lantic region.concern that thoff the coast w

129

g. s earby set

for uently with n ady d omic

has

he would

130

take awaybeen obseresidents oimplemenMaryland The studysupport foshore. Thodecreasing

Figure 10-5

Differencthat 66 pesurveyed leaves theoffshore win additionproposed constructi Public perstudy, Unopponentsocean areaevery oneCape Winactually eopinion mlocal stakeprojects pturbines wprograms.

y from the aeserved at Europof Mid-Atlan

ntation of offsd and Delawar

y conducted foor offshore wiose surveyed g support the

5. Survey of Ant

es were notedercent of out-oclaimed that t

e option for sewind power an to local eco600 MW offs

ion and manu

rception of wniversity of Des. Depending a residents’ fa

e opposed [52nd Project in Mffects of offsh

must be taken eholders is cr

planned by thewill likely serv.

sthetic beautypean beaches

ntic States andshore wind turre to determin

or Delaware pind farms, bugreatly suppocloser the hy

ticipated Touri

d in response of-state beachthey were likequential tripsctually boosts

onomy boosts shore project

ufacturing and

wind farms impelaware reseaon where the

favored 3:1 an]. These resulMassachusetthore wind insinto account

ritical, but it ce U.S. DOE inve to reduce t

y of the horizothat installed

d out-of-state rbines. Studiene public opin

produced mixut the support orted offshore

ypothetical wi

st Reaction to a

from local vshgoers surveyely to visit a bs after the firss local economseen from thin Maryland

d then maintai

proved with iarchers found ey live, responnd inland residlts are dramatts although attstallations on in considerin

cannot be the n 2014–2017 these concern

on [49]. Althod offshore wintourists poses

es were condunion and feasi

xed results. Thwas stronger e turbine projind farm got t

a Hypothetical W

s. out-of-stateyed and 84 perbeach with tust. This is conmies in terms

he additional jwould create in 80 jobs on

increased outrthat in the St

ndents with adents’ favoredtically more ftitudes in Newlocal residentg installation sole decidingwill help add

ns as was the c

ough no negatnd farms, currs a barrier to ucted by the Uibility of offsh

he study concfor wind farm

jects 22 km anto shore, as ill

Wind Farm

e tourist grouprcent of Dela

urbines 10 kmnsistent with es of tourism. Tjobs created f 500 jobs initan ongoing b

reach to staketate supporteran impacted vd 5:1, that is favorable thanw England se

nts and tourismn projects, andg factor. The odress these uncase on earlie

tive effects onrent public opthe most costUniversity of hore wind tur

cluded that thms that are nond further outlustrated by F

ps. The study aware residentm offshore at levidence in EThese boosts for turbine instially in the fibasis [51].

eholder grouprs significantl

view favored afive favors ofn similar surveem to be impm is still ambid open commuoffshore windncertainties aner DOE demo

n tourism havpinion of botht-effective f Delaware forrbines [50] [5

here is favorabot visible fromt. They showeFigure 10-5 [

also concludt beachgoers least once, wh

Europe that in tourism ar

stallation. A irst two years

ps. In a separaly out numbera project 2:1, ffshore plantsveys done for proving. The iguous. Publiunication witd demonstratind seeing actuonstration

ve h

r both 51].

ble m the ed [50].

ded

hich

re also

for

ate r

s for the

ic th ion ual

Aestheticsplants canthat carefumodel ord 10.6 Ra There are weather raAdministralong the techniquesufficientlmulti-rada Radar hasradar signA wind faweather raair traffic Despite thof wind tutechnologbut also ameasures The Uniteand other studies fohardware,the Westeinterferen Radar issudetailed afeasibilityin the vicipossible cequipmen Wind turbenergy imof air and The nationPTC and Igeneratedhave turnemanufactuadded].

s can becomen also encountul attention todinances and

dar

significant coadars. This is ration (FAA).Mid-Atlantic

es involving thly tested undear environmen

s been studied nals. Results sharm located cloadar software control softw

hese difficultiurbine interfergies of wind tucknowledgedthat are based

ed Kingdom cstakeholders und that som, filtering softern U.S. have nce to civilian

ues have beenand thorough ay of wind enerinity [36]. In bchanges to trant modified to

bines also havemports can redu

sea space to fi

nal importancIowa's renew

d jobs and helped the wind puring base, cr

e barriers espeter barriers bao early and opdemonstration

oncerns that wespecially im

. The nationalc coast. Althouhe use of signer operationalnt.

and FAA hashow that windose to a bordecould misinte

ware could tem

ies, there is norence. A studurbines and ra

d that our agind on digital si

conducted sevregarding poe level of the tware, or gap-experienced aircraft and n

n well documanalysis of issrgy in the Pamboth studies c

aditional or pro accommodat

e national secuuce the need fofind compatibl

ce of wind enable-power cped wind-rela

power industryreate jobs, low

ecially for higased mainly open communin projects can

wind turbinesmportant for thl security impugh mitigatio

nal processingl conditions o

s conducted fid power planter could createerpret the high

mporarily lose

o fundamentady for US Depadar can coexng radar systeignal processi

veral years of otential effects

interference -filling radar siting delays nearby militar

ented in Mid-sues [55]. Unmlico and Albconflicting usreexisting opete both the wi

urity implicatior some securle operation of

nergy was expommitments ated businessey into “an Amwer energy co

gh visibility rion cost and “Ncation can fren reduce these

s can interferehe Navy, Coaplications of ron measures hg techniques ton the U.S. wi

ield tests to des interfere wite a blind zoneh turbulence athe tracks of a

al physical conpartment of Hxist.” A varietem may not being capabiliti

f study and inis on radar sysfrom wind tusystems [54].as the result ory installation

-Atlantic reginiversity of Nobemarle Sounses were citederations and toind turbines a

ons that are ofity operationsf wind turbine

pressed recenthave broughtes prosper in merican succeosts and streng

idgeline projeNot-in-my-beequently mitige obstacles.

e with surveilast Guard, andradar interferehave been useto reduce grouith full-scale t

etermine effecth the radar tre for detectingat the blade tipaircraft flying

nstraint preveHomeland Secty of mitigatioe able to use ties.

itiated collabostems and miturbines can be. Most recentof concerns rns.

ional studies. orth Carolina

nds considerind. However, lio what could and other uses

ften overlookes. We need to res alongside pr

tly by Iowa Gt in billions ofthe state.” B

ess story that gthen our ene

ects in touristeach-view” issgate these iss

lance, navigad Federal Avience are obvied successfullund-clutter, thturbines in an

cts of operatinracking of aircg intruding airps as a possibg over wind fa

enting detecticurity [53] conon measures wthe most prom

oration betwetigation stratee mitigated wtly, some landregarding pote

University ofa did a paralleng extensive mittle attentionbe curtailed,

s.

ed. Reducing revise current reexisting ope

Governor, Terf dollars of in

Branstad addedis helping us ergy security

t areas. Offshosues. Data shues. Reasona

ation, and Dopiation ous, especiallly in Europe,hese have notn operational

ng turbines oncraft and weatrcraft; current le tornado; cuarms.

ion and mitigancluded that, were suggestemising mitiga

een the militaegies. These ith improved

d-based projecential radar

f Maryland diel study on themilitary opera

n was given torelocated or

our dependenthinking and

erations.

rry Branstad, “nvestment, d, those policbuild our

y,” [emphasis

131

ore hows able

ppler

ly like t been

n ther.

urrent

ation “The ed

ation

ary

radar cts in

id a e ations o

ce on usage

“The

cies

s

11.0 CoThroughothe Mid-Awind enerknown andevelopmAtlantic. Timportant

There is pregion andtwo utilitywind eneramong theavailable Delaware Atlantic c

The primatypes; PolInterest. T 11.1 Po Although Renewablbuilt. Sevprograms.Renewablprovided jPennsylvafulfilled laand wouldliquor waregardlessactivities Despite threquireme An issue iresources,operationbeneficialPortfolio p Another imet or excagreemenstatute. Thnew reneweven if it w

onclusionout this reportAtlantic have rgy developmnd potential w

ment which, unThe Executivt barriers and

potential for od several timey scale projecrgy projects foe highest in that Appalachiaand Chesape

coast.

ary barriers tolicy-RegulatoThe properties

licy and Re

all Mid-Atlanle Energy Poreral issues we. First, in mosle Energy Cerjust over 3 peania, Virginiaargely with “ad operate anystes in facilitis of RPS/RPGdeployed afte

hese enlightenents are not ye

in Virginia is , supplemente. Tier II RECl than Tier I sprograms.

ssue in Virginceeded. The S

nts (PPA) for nhe Commissiowable generatwould be nee

s , numerous isbeen identifie

ment, but in cowind resourcesnless overcom

ve Summary inoptions for th

over 4,000 MWes that offshocts installed infor bulk powerhe nation, incan mountain reake Bays, Al

o wind develoory Issues, Wis of these typo

egulatory I

ntic States acrtfolio Standaere identified st cases fulfillrtificates (REercent of the Ta and 11 otheranyway” cred

yway. These inies installed inG. North Caroer the RPS lawned RPS provet sufficient.

that the goalsed as necessars are generateources and th

nia is that porState Corporanew wind powon determinedtion that was eded to meet t

ssues, impedimed. Individualombination ths in the regionme, will continn this report dheir resolution

W of land-basre. All states

n Maryland anr generation c

creasing up toridgeline siteslbemarle and

opment outlinind Resource ologies are no

Issues

knowledge thards or Goals

as critical shlment is allow

ECs) may be gTier 1 RECs rr States as fardits. Many crenclude large hn the early 19

olina is an excw was passedvisions, no wi

s have been mry by the purced by sourcesheir use is con

rtfolio goals aation Commiswer generatiod that the goanot needed to

the goal estab

ments and bally, many of t

hey become ban. There also nue to constradescribes the n or mitigatio

sed wind enerhave signific

nd none elsewcontinues, des 3.2 percent as, on the coasPamlico Soun

ned in this repTechnical Un

ot mutually in

he importance(RPS/RPG) i

hortcomings inwed from facigenerated anyretired in 201r away as Micedits are genehydropower p900s. Both typception, requid and that 75 pnd plants hav

met largely thchase of Tier s that are genenstrained or pr

are treated as ssion was askeon were “reasoals of the RPGo meet the curblished for late

arriers to the dthese issues aarriers prevenexist several ain wind enertechnical app

on.

rgy plants thrcant wind enewhere in the rspite a growinannually. Amstal plains, at nds, and at de

port can be grncertainty, Ecndependent an

e of wind in thin place, theren the Mid-Atlilities that pre

ywhere in the 0. The rest of

chigan. Seconerated from faplants and plapes of facilitiiring that RECpercent must ve been deplo

hrough existinII RECs from

erally considerohibited in a

ceilings ratheed to determionable and pr

G were not mirrently applicer years. The

development oalone are not enting the utilizmajor barrier

rgy developmproach used to

roughout the Mrgy potential

region to dateng demand fo

mple wind resoshallow shelteeper water si

rouped into thconomic Viabnd do interact

heir energy pe have been olantic State Redated the porPJM system. f the RECs cand, REC requiacilities that wants burning pes would opeCs be generatcome from in

oyed as the esc

ng in-state hydm pre-existingered less envia number of R

er than minimination if tworudent”, as reinimums, but

cable goal wasCommission

of wind energenough to derzation of bothrs to wind ene

ment in the Mio define the m

Mid-Atlantic yet there are. The absence

or electricity tources are tered water siites off the

hree categoricbility and Pubt.

plans and haveonly two projeRPS/RPG rtfolio laws anMaryland

ame from irements are b

were built lonpaper plant blerate anyway ted from new n-state sourcecalating

dropower g facilities anironmentally Renewable

mum targets to power purch

equired by thet caps and thas not prudent

n also noted th

133

gy in rail h ergy id-most

only e of that is

tes in

al blic

e ects

nd

being ng ago lack

es.

d

o be hase e RPG at any , hat

134

Tier II RElegislativetoday, disNorth Carmuch of t All of the energy immainly at states but from the Rreduce CO Delaware effective ofor coastathe local uCommissi 11.2 Fed In recent yoffshore i(BOEM) apotential pAtlantic Oproposals “no signifoffshore afederal wa This largeconsideratfrom landonshore a Our studywaters of wind resoocean for operation the levelizinstallatiooffshore pthe Federasounds. Ebalanced aplant emis

ECs, where the efforts in Visregarding enerolina, the curhe state’s ridg

Mid-Atlanticmports by deve

residential apnot in others

Regional GreO2 emissions.

has an effectoffshore wind

al and bay winutility, Delmaion are recept

deral Emp

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partment of Enopers. BOEMcoast of Dela

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n offshore oceble sites in Dealong the coasdevelopment

pted to reexamunds. Based on

to be marginr and survivalance expensenergy (in 2013per kWh for o

rends in Europgram. Of courl issues, such enefits to bay

ble as a lowerrease and streincrease use tation of the sces “off limits

y plans mentiogenous resourcong with prop

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Mid-Atlantic S. Departmentnergy (DOE)

M has identifieaware, Marylan environmenolicited majort has created s

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mine the applin analysis of ally better offl in hurricane , favored app3 constant doocean installape and with dse there are isas birds, batswater and air

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ed lease blockand, Virginia ntal assessmenr research andsubstantial int

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ications on thtall tower (>7fshore compagenerated walication in thellars) was estations. These detailed enginssues associats and view shr quality from

d of complianRPG have faileother renewabtain Ridge Pro

pment.

avoring renewe also a varietes tax and proavailable for r-state cap-and

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ifted from lanBureau of Oced much of thisks for offshorand possibly

nt completed d technology terest for proj

n attention andBays, Albemar

wind develop

he coastal plai70 m height) wared to bays, baves of up to e bays. Basedtimated at $0.estimates app

neering studieted with deplo

hed concerns,m reduced coa

nce, they musted in favor ofbles in the Cootection Act h

wable energy ty of grant property waversrenewable ened-trade progra

as implementeogram. There

research contnd the Delawa

nd-based applean Energy Ms interest fromre three of why later North C

with favorabdemonstratiojects beyond

d resources awrle and Pamlipment has cre

in and in the swind data, webut the platfor30 m height p

d on detailed e091 per kWhpear to be cons completed boying turbinemust be addr

al mining and

t be used. Sevf least-cost-poommonwealthhas served to

and reducing ograms aimeds available in ergy programam meant to

ed a strong anare opportunitinues. In add

are Public Ser

ications to Management m the states anhich are in theCarolina. Projble results shoon projects forthe 12 nm lim

way from ico Sounds, aeated a barrier

shallow sheltee concluded trm cost in theplus added economic ana

h for bay nsistent with by DOE earlyes in the bays ressed and d thermal pow

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11.3 Eco This studyplains, shaviable todterm deveof bays an Ridgelineenvironmrequire sigand/or an on analysiusing 1.5 assumptio 11.4 Tec A barrier planning uusing meahub heighindicates tpower cla Significanthe DOE, were simiDelmarvaunderestimthat the Ein this stubarrier to An additio(LLJ) acroand summforcing dujets begin Lack of gfactors coterm, hub boundary,developer One otherrequired tTransmissFurther, w

onomic As

y looked at thallow bays an

day. The levelelopment in thnd sounds due

e sites are lowental factors mgnificant reduattractive lonis of modeledMW turbines

ons for costs,

chnical Un

is the uncertautility-scale wasurement froht (100 m) andthat existing w

ass and may o

nt differencesEastern Wind

ilar. But lookia at Wallops amated by at leWITS estima

udy. These difany develope

onal uncertainoss the Mid-A

mer months. Tue to surface c

n around sunse

ood wind chaontribute to un

height or abo, extreme evers and for thei

r technical bartransmission lsion line proje

we did not eva

ssessment

he economic vnd sounds, anlized cost of ehe Mid-Atlante to proximity

west cost. Howmust be cost muctions in riskng-term Powed PJM forwars on land and performance,

ncertainties

ainty about wiwind plant. Thom seven sitesd above. Resuwind maps un

overestimate th

were noted id Integration ing at the highand Eastville least one windates for averagfferences are cer.

nty and potenAtlantic regioThese jets are cooling of theet and are hig

aracteristics dncertainty regove wind meaents (hurricaneir debt and eq

rrier could belines will be aects like the Maluate the pot

t Results

viability of fod offshore ocenergy from ptic. Next mosy to load and

wever, the distmust be consks, more confer Purchase Ad pricing and5 MW turbin, and financin

s

ind resourceshere is substas showed thatult from the mnderestimate the wind offsh

n comparing Study (EWITh wind shear leads to the c

d power class.ge seasonal wconsidered to

ntially valuabln. LLJ may spowerful wine elevated we

ghest during th

data is considegarding the regasurements, thes) and the pr

quity investors

e limitations oavailable wheMid-Atlantic ential impact

ur different aceans. Three opotential coasst attractive pobecause the w

tance to load idered The O

fidence in winAgreement (PPd cash-flow mnes in Bay andng, are detaile

s. There is a pntial data avat wind resourc

multi-year winthe wind resohore.

the actual winTS). The Ridgmeasured at onclusion tha. The reverse

wind speed offo be very sign

le finding is eignificantly in

nds that arise estern region dhe PJM off-pe

ered to be a mgional wind rhe atmospherresence of lows.

on the existingen needed to hPower Pathwfrom the pro

applications oof these markstal sites appeotential sites wind resource

centers and aOcean project nd resources, PA) to be viab

model results cd Ocean applied in the repor

paucity of winailable at or bce increased snd velocity anource over the

nd measuremgeline data wi100 m hub heat average coais true on thefshore were a

nificant and re

evidence of thncrease windfrom large scduring the waeak period at

major barrier tresource. Theric complexityw level jets. T

g transmissiohandle the ene

way (MAPP) aoposed offsho

of wind plantskets appear to ears to be attraare in shelter

es are probabl

associated tranis more challreductions inble. These fincomparing 10ications. Undrt for eight di

nd resource daelow 50 m hesubstantially nd shear mease coastal plain

ments with moind speeds aneight and aboastal plain wine ocean. The aabout 15% higesulting uncer

he presence od plant produccale topographarm season. Unight.

to wind develse include they and variabilThis uncertain

on grid. This sergy from theare assumed tre backbone.

s; ridgeline, cobe economic

active for neared shallow wly underestim

nsmission andenging and w

n risk premiumndings are bas00 MW plantsderlying ifferent cases.

ata suitable foeight but reseat large turbinsurements ns by one win

odel results frnd capacity fave on the nd speeds maanalysis showgher than estimrtainty would

f Low Level Jction during shic/thermal

Unfortunately

lopment. Mane lack of longlity at the landnty is a barrier

study assumede 100 MW plato be availabl

135

oastal ally

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d would ms sed s

.

or arch ne

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om actors

ay be wed

mates be a

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ny g-d-sea r for

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136

11.5 Pu Public opbarriers atplanning pProtectionreasonablare availaready. Generallyenvironmways shouNoise andbenefits fr“dead zonBecause oare not a b

blic Interes

inion of windt this time. Thprocess as is tn Act has effee zoning ordible and in use

y environmententally sensituld be avoided aesthetics arrom wind pownes” in the bayof this, currenbarrier to win

st

d energy and ehese can becothe case in No

ectively blockinances can goe except in a f

tal issues can tive sites but ad. Bats issuesre issues that wer that resuly and ocean.

ntly public intnd energy dev

environmentaome block issuorth Carolina

ked all wind do a long way few commun

be defined, aare not consids can largely bcan generally

lt from reduciPublic opinio

terest and envvelopment.

al issues are imues if they are

a. There a judidevelopment i

to prevent issities where pr

avoided or midered a barriebe avoided by

y be handled ting coal and oon is generallyvironmental is

mportant but e not addressicial interpretin the westernsues before throjects began

itigated. Theser to developmy raising the tthrough open other fossil fuy favorable tossues are cons

are not consied properly intation of the Rn part of the shey start. Modn before mode

se can precludment. Bird santurbine cut-indialog citing

uel burning anoward wind insidered critica

dered to be n the project Ridgeline state. Howevedel zoning poel ordinances

de the use of nctuaries and n wind speed. g the value andnd shrinking tn the Mid-Atlally importan

er olicies were

fly

d the lantic.

nt but

12.0 Bi

[1] EnerEner

[2] DanColl

[3] DOECon

[4] EIA[5] NRE

http:ution

[6] "Eur[7] IEA [8] Wes

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ActivAsse

[10] DOEUnit

[11] W Mof B

[12] 4C Oswed

[13] HassCapihttp:

[14] ToddCou

[15] PJM[16] Rich

Tran[17] Hug

Sque[18] Ira S

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Ener[20] Whi

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stinghouse Eleshore Wind Eeau of Ocean vities on the Aessment., JanuE/DOI, A Natted States., Fe

Musial and B RBarriers and OOffshore. [Onden-se06.htmsan Garrad. (2ital Costs for ://www.bwead Edwards, "Rncil of State G

M, "Transmisshard Schmalennsport Rule," ghes Wayne, Feezed in the VShavel and Bahcoming Util. Energy Inforrgy Informatiite Constructi://www.whitetamp Wind. (m of 50 MW. lic Service Coions in the Sta

hy

ation, "Eastern, Knoxville, Ta III, Josh Bowceton Energy rtment of Ene

U.S. Electricite Electric Poweb) Dynamic Mgov/gis/cfm/dc_Regional_WAtlas," RoskiWind Energyectric Corpornergy ConverEnergy Mana

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he United Stadfs/40745.pdfark-vanern-ga

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143

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144

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s

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145

146

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dix B: Econ

s are presenteliffs Shallow he second is, ue, using Calcu

case, includedcash flows, an

se rrent (first halPricing using

nomic Mod

ed. The first isBay, with PJ

under currentulated COEs th

d are two pagnd a one-page

lf 2012), likel2015 Adder P

del Run Ex

s, under curreJM Forward Pt (first half 20hat meet targ

ges of summare graph.

ly financing, Prices, at 50%

amples

ent (first half Pricing using 012), likely finet IRR and de

ry and input i

case number % debt to 50%

2012), likely 2015 Adder Pnancing, caseebt coverage

information, t

8, Calvert Cl% equity.

financing, caPrices, at 50%e number 6, Climits, at 50%

three pages of

liffs Shallow

ase number 8,% debt to 50%Cloverdale % debt to 50%

f earnings, th

Bay, with PJM

147

, %

%

ree

M

Append Under curCOEs tha

dix B – Sec

rrent (first halat meet target

cond Case

lf 2012), likelIRR and debt

ly financing, t coverage lim

case number mits, at 50% d

6, Cloverdaledebt to 50% e

e Ridgeline, uequity.

using Calcula

157

ated

1

166

AppendEnergy Four caseShallow Bthe years In organiz

1. SA

2. O Mth M S

3. HL

*=

4. In“sSu

dix C: PowePlants

s are presenteBay, and Fent2012 through

zing the tradin

easons are deAug.

On-Peak vs. O

Mon-Fri: Hourhrough 7:00 a

Mon-Fri: Hour

at-Sun and ho

Holidays are: Labor Day - fir

= if this holid

n the USA, Dsprings forwaunday, when

er Market T

ed. These are tress Ocean. Ph 2035. Five p

ng model resu

efined as: Fal

Off-Peak Hour

rs ending 010am);

rs ending 080

olidays are of

New Year's Drst Mon, Sept

day date is Su

aylight Savinard” to lose onthe clock “fa

Trading Mo

DPL-ODEC Pricing, capacpages of data

ults, the follow

ll: Sept-Nov,

rs, are defined

00 through 07

00 to the hour

ff-peak.

Day - Jan 1*; t; Thanksgivi

unday, then tak

ngs Time begine hour. Dayl

alls back” to a

odel Resul

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wing definitio

Winter: Dec-

d by PJM, on

00 and the ho

ending 23:00

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ke Monday.

ins in March, light Savings add one hour.

lts for the

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ons were emp

-Feb, Spring:

a wholesale b

our ending 24

0 are on-peak

ay - last Monhurs, Nov; Ch

on the seconTime ends in

2012 Mid-A

e Ridgeline, Cpresented on ae.

ployed.

Mar-May, an

basis, as:

400 are off-pe

k (7:01 am thr

n, May; Indephristmas - De

nd Sunday, whn November,

Atlantic W

Calvert Cliffsa monthly bas

nd Summer: J

eak (11:01 pm

rough 11:00 p

endence - Julec 25*.

hen the clock on the first

167

ind

s sis for

June-

m

pm);

ly 4*;

AppendGenerat North Car

North Car

dix D: Examtion

rolina phosph

rolina Camp L

mples of C

hate mining fa

Lejuene

oastal Site

acility on Pam

es that cou

mlico River

uld be evaluated for WWind Powe

189

er

190

Pamlico S

Marine A

Sound & Hyd

ir Station –Ch

de County NC

herry Hill NC

C (10 mile refe

C

erence line addded

Farmland

Carteret, N

, near Curritu

North Carolin

uck Sound, NC

na

C

191

192

Virginia B

Virginia B

Beach farmlan

Beach farmlan

nd encroachin

nd encroachin

ng on wetland

ng on wetland

d

d (n. end Currrituck Sound))

Mixed use

Norfolk, N

e area – Virgi

Naval Supply

inia Beach

y Center in cen

nter/lower lefft of photo

193

194

Virginia:

Virginia:

Chesapeake B

Chesapeake B

Bay Bridge T

Bay Bridge T

Tunnel

Tunnel Toll Pllaza

North end

Virginia –

d, Chesapeake

– Sunken Libe

e Bay Bridge

erty Ships at K

tunnel

Kiptopeke

195

196

Delmarva

Matthews

a peninsula oc

s, VA

cean side farmmland

Wallops I

Tangier S

Island, VA

Sound, VA

197

198

Lower De

New Jerse

elaware Bay (

ey prison adja

(10 mile line a

acent to the D

added for refe

Delaware Bay

erence

Nuclear p

Delaware

power plant on

farmland acr

n Delaware B

ross Bay from

Bay

m nuclear plannt

199

200

Air Liquid

New Jerse

de Chemical P

ey property ac

Plant, DE

cross Del. Baay from Air Liquide plant

Delaware

Agricultu

City, entranc

ral property o

ce to C&D ca

on Delaware B

anal

Bay, Bowers,, DE

201

mid-atlantic wind - overing the challenges

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