LOWEST ESTIMATED CONSTRUCTION COST – The U.S. Energy Information Administration (EIA) estimates that North Carolina, Georgia, South Carolina, and Virginia have the lowest construction costs for offshore wind energy of all the East Coast states. Florida was not included in this study. This advantage results in 1) lower capital and energy costs from offshore wind; and 2) a competitive advantage for manufacturers that choose to locate facilities in the region.
ENERGY DIVERSITY & PRICE STABILITY – The electricity supplies in the Southeast are dominated by coal, nuclear, and increasing amounts of natural gas. All of these resource types, especially natural gas and coal, are susceptible to fuel price volatility and large-scale outages. Wind energy diversifies the region’s electricity supply and delivers long-term, stable-priced energy since the price of the fuel (the wind) is always zero. This provides a hedge against future electricity price spikes caused by price volatility from fossil fuels.
LOW ELECTRICITY PRICES – The Southeast enjoys some of the most competitive electricity rates on the East Coast, which means that wind energy prices must be lower in this region to justify projects. However, the region also enjoys several advantages that mitigate the challenges of a lower “hurdle” price. For example, significantly lower estimated construction costs and skilled and highly competitive labor markets in the region reduce the estimated cost per kWh of offshore wind energy. Also, very high per-capita and total electricity usage in the region compared to the Mid-Atlantic and Northeast results in a given wind project representing a lower percentage of an individual customer’s usage, which reduces the $ per month ratepayer impact. Combining all of these factors and spreading a given amount of offshore wind development across the region, one would expect the ratepayer impact in the Southeast to be comparable to the Mid-Atlantic region and lower than in the Northeast. Ratepayers and utilities also gain price certainty since wind projects avoid price volatility and require no fuel costs throughout their lifespan.