Washington Post Editorial: "Maryland’s power play"

I've been covering the Maryland Offshore Wind Energy Act of 2012, a legislative initiative of Maryland's Democratic governor, Martin O'Malley, in my Maryland Offshore Wind Power series. If passed in this year's General Assembly session, it's intended to subsidize an electric-power-producing wind farm 10 nautical miles out into the Atlantic Ocean, off Ocean City. It might look something like this:

A recent editorial in The Washington Post objected to the wind farm, which I whole­heartedly support. The editorial gives me information I hadn't known, though, and for which I'm grateful. Among the items I learned:

• The proposed wind farm would eventually generate perhaps a third of the state’s electricity. I hadn't realized it would account for that much of our electric power.
• Maryland lawmakers have already mandated that the state's utilities derive 20 percent of the state’s electricity from renewable sources by 2022. Renewable sources include wind, solar, and other technologies which don't consume fossil fuels, which we will eventually run out of, and do not contribute greenhouse gases, such as carbon dioxide, to the atmosphere, thereby abetting global warming.
• The state’s renewables mandate already requires that utilities derive 2 percent of the state’s electricity from solar by 2022.

The proposed wind farm legislation apparently (see my earlier posts in this series) requires wholesale electricity suppliers to buy up to 2.5 percent of their megawatts from offshore wind generators. I interpret that to mean that 17.5 percent or more of the required 20 percent for renewables would come from other than offshore wind.

The Post editorial doesn't mind the renewables mandate per se, just the specific requirement of the proposed legislation that a certain-sized chunk of it come from offshore wind. That requirement would keep electricity suppliers from opting for cheaper alternatives.

The Post also wants natural gas to count, at least partially, as "clean energy," even if it is not strictly "renewable." Natural gas has become quite cheap in the last few years. Burning natural gas puts half the carbon in the atmosphere that burning coal does. So why shouldn't electricity suppliers be encouraged to buy from electricity producers who use gas, if that's a lot cheaper than the proposed offshore wind operation?

My answer is that an expensive-to-build offshore wind farm needs an initial ratepayer boost before it can hope to become price competitive with natural gas, with nuclear, or even with solar, sometime down the road.

As I understand it, building the proposed wind farm would start in 2017 and be finished in 2022 — barring delays. Once it was completed, its developer would have to pay off the steep financing for it, over some ensuing period of years. Meanwhile, if Maryland's residential electricity customers' bills are $2.00 higher than they would otherwise be, most of the extra money would get funneled into paying off the loans.

Someday, though, the wind farm's startup costs would have been paid off. At that point, the wind farm would become price competitive with other power plants, and might even be cheaper than a great many of them.