PROVIDENCE – A wind farm off the coast of Block Island would generate $107 million in economic impact while a second, larger farm would produce $893 million in activity, according to a consultant hired by the R.I. Economic Development Corporation.
The report was submitted Tuesday afternoon to the R.I. Public Utilities Commission, which is mulling whether to approve a power-purchase agreement between wind farm developer Deepwater Wind and National Grid. Deepwater wants to construct an eight-turbine wind farm off the coast of Block Island and follow that with a larger farm of about 100 turbines 15 miles off the mainland. The contract before the PUC would apply to the Block Island project.
The consultant, Levitan & Associates, said the economic benefits of the smaller farm include $55 million in direct impact and $52 million in indirect and induced effects. Levitan & Associates also said that Deepwater expected the wind farm to cost $205.4 million to build, with $42.4 million spent in Rhode Island.
The farm could also put Rhode Island on track to host the first U.S. offshore wind farm and the industry that would spring up around a farm, the report said.
The Block Island project “has already helped Rhode Island attract training and development funding and will facilitate new and existing business expansion opportunities as well as the creation of renewable energy jobs,” the report says. “Deepwater’s investments in Rhode Island would help position the state to reap substantial economic development benefits from the anticipated growth of the nascent offshore wind industry in the Northeast United States.”
Levitan said much of the impact of the wind farm would center on the Quonset Business Park – where Deepwater plans to assemble the turbines – and Block Island. Deepwater has already agreed to lease 117 acres at the park, which could become the nexus of the wind industry in the Northeast, the report says.
A second Deepwater farm would bring an even greater economic impact, Levitan said. If the farm estimated to cost $2.25 billion becomes a reality, it would generate $479 million in direct effects and $414 million in indirect and induced effects.
Boston-based Levitan & Associates said it used the industry standard IMPLAN economic model to reach its figures. In testimony filed with the PUC, the company said it had no financial ties to Deepwater, National Grid or other involved parties.
The EDC was required to commission and deliver the report under a law passed earlier this year by the General Assembly. That law also ordered the PUC to review the proposed power-purchase agreement again after the PUC rejected it, saying the price of electricity from the wind farm was too high.
In testimony filed with the PUC Tuesday, Levitan said the price under the amended agreement met the “commercially reasonable” test spelled out under state law. Under the proposed 20-year contract Deepwater would sell electricity at 24.4 cents a kilowatt-hour in during the farm’s first year of operation and escalate the price 3.5 percent each year.
