Greenrock Offshore Wind Feasibility Study
Greenrock announced the release of the fourth study in our offshore wind feasibility study series – a Wind Speed and Annual Energy Production Analysis.
A spokesperson said, “This study was commissioned to understand more accurately how much electricity could be generated by an offshore wind farm in Bermuda.
“Key points from the study are as follows:
- The energy production analysis has been carried out by BVG Associates, who have decades of experience in the offshore wind industry, including in the design of offshore wind turbines.
- The study used commercially available wind resource data purchased from Vortex, and also considered local data that is available from the Bermuda Weather Service.
- A 60MW offshore wind farm could generate 34% of Bermuda’s current electricity requirements.
- Forecast electricity costs from an offshore wind farm have been revised using the annual energy production from this study to around $0.17/kWh.
- Based on our own analysis of BELCo’s electricity costs over the past few years, offshore wind could generate electricity that is around 30-40% cheaper than generating electricity from fuel oil.
- The electricity generated by a 60MW offshore wind farm would cost around $23 million a year less than generating the same amount of electricity from oil.
“We are currently seeking sponsors to support the next study, an Offshore Wind Roadmap. This will be written for key stakeholders, and will explain good practice approaches that could be used for a small remote location such as Bermuda to interact with the global offshore wind industry, to successfully procure and develop a commercial offshore wind farm for Bermuda.”
The Bermuda Offshore Wind Review & Priority Actions follows below [PDF here]:
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If wind farms are so great why are so many countries who have installed them closing them? Many planned installations are being shelved because of the rising costs. Turbine manufacturers are going broke because of the cost of production.
The report seems to concentrate of the “reduced” cost of producing electricity without the added installation and maintenance costs.
Problem is Roban believes this net zero rubbish and will go for it.
You are 100% correct.
Recent: Orsted wants out of $300M forfeiture for scrapped New Jersey offshore wind farms
These are a few months old:
a. Vattenfall has put a stop to work on its 1.4 GW UK Norfolk Boreas site, following a 40% surge in project costs.
b. At least eight multinational companies in three American states have started to back out of wind contracts or ask to renegotiate deals in ways that will pass more costs to consumers. Shell (ticker: SHEL), BP (BP), Denmark’s Orsted(DNNGY), Norway’s Equinor (EQNR), Spain’s Iberdrola (IBDRY), Portugal’s Energias de Portugal (EDPFY), France’s Engie (ENGIY), and state-owned Electricite de France.
c. “Returns on offshore wind are becoming more and more challenged,” Shell CEO Wael Sawan told Barron’s last month (June 2023), just days after a Shell joint venture said it would pull out of a power contract in Massachusetts. Shell won’t build renewable projects that can’t earn initial returns of 6% to 8%, he said.
Where does the energy come from when the blades are not turning for whatever reason? Shut down due to too little wind or too much wind, broken, routine maintenance, etc. Answer: Evil fossil fuels. BELCO must keep generators on standby to kick in when the wind turbines are not generating. That readiness cost is not a freebie. Consumers bear the cost.
Neither Greenrock nor the RA will show the Estimated Consumer kWh Rate (ECkR) cost range that will be delivered to consumers and businesses by BECLO purchasing wind generated electricity. The ECkR is critical to the decision making process because it shows all costs involved in delivering electricity to consumer.
Why is it not being disclosed? Because the ECkR would be shockingly greater than our current rate! Bermuda’s electric rate would far surpass green Germany and green Denmark. But we would be #1 with the world’s highest electric rate guaranteed. Bermuda’s current electric rates are right up there with, if not higher than, #1 Germany and #2 Denmark.
Examples: Subsidies, tax breaks, guaranteed returns to investors, turbine maintenance, grind connection, Government taxes added in to make up for the lost fossil fuel tax revenue, BELCO markup, etc. Showing the ECkR and how it was calculated would prove that the overall cost of a wind farm and the future cost of wind turbine generated electricity to Bermudians is economically oppressive. Release the spreadsheet, name, define, and list all the costs in the calculation. Name, define, and list all costs NOT included in the calculation and why they were excluded.
All these claims below are unsupported because Greenrock (as with the RA) refuses to release the spreadsheets used for the calculations for public review.
- A 60MW offshore wind farm could generate 34% of Bermuda’s current electricity requirements. (unsupported claim)
- Forecast electricity costs from an offshore wind farm have been revised using the annual energy production from this study to around $0.17/kWh. (unsupported and just a totally absurd claim. that rate appears to be the Levelised Cost of Electricity (LCOE), a misleading rate which is not the ECkR. The LCOE spreadsheet has not been released.)
- Based on our own analysis of BELCo’s electricity costs over the past few years, offshore wind could generate electricity that is a round 30-40% cheaper than generating electricity from fuel oil. (unsupported claim)
- The electricity generated by a 60MW offshore wind farm would cost around $23 million a year less than generating the same amount of electricity from oil. (unsupported claim)
I am pleased beyond belief that Greenrock is taking such a proactive approach to developing an offshore windmill farm in Bermuda waters. I can only hope that the next study (“currently seeking sponsors to support the next study”) is sufficiently positive that the investors in Greeenrock will feel able to commit their millions of dollars to actual development of an offshore windmill farm in Bermuda waters.
The one thing that does confuse me is why Greenrock is seeking sponsors for the proposed development of an offshore windmill farm in Bermuda waters. One would have thought that the investors would pay for that.
I am sure that someone from Greenrock or the RA will correct me if my numbers are off but at least I am putting this model out for debate since neither will release any spreadsheets.
Simple Interest Calculator (online)
Solve for: Principal (P): $400,000,000 est cost of wind farm
Rate (R): 8% per year interest/guaranteed investor rate of return (ROI)
Time (t): 20 years life of the wind farm contract
Answer: I = $ 640,000,000
The simple interest/guaranteed investor ROI accumulated on a principal of $400,000,000 at a rate of 8% per year for 20 years is $640,000,000.
$400,000,000 + 640,000,000 = $1,040,000,000 ($1.04 BILLION)
$1,040,000,000 / 20 years = $52,000,000 per year in guaranteed payments to investors! (does not include BELCO’s added costs)
$52,000,000 / 10,000 households = $5,200 cost per household per year x 20 years = $104,000! (does not include Government making up for lost BELCO fuel tax revenue)
GO GREEN! Start looking for a 2nd or even a 3rd job to pay your electric bills, plus covering the lost fuel tax revenue to Government. Less fuel consumed by BELCO’s evil fossil fuel generators means less fuel taxes paid by BELCO to Government. Naturally, neither Greenrock nor the RA mentions recovering the loss in fuel tax revenue as that is outside of their scope.
Please, DO contact your MP (somehow) and tell them your position on the proposed offshore wind farm.
NOTE: Most businesses will pass on their increased electric costs to consumers by increasing the cost of goods and services, so there is no breakdown by homes and businesses. Government electric bills are paid by us.